If MLMs are an unfair trade practice and depend on deception for their growth and survival, why has the FTC allowed MLM to go forward at all?
In 1979, the FTC was outfoxed and outgunned by Amway attorneys when an FTC judge ruled that Amway was not a pyramid scheme, provided certain “retail rules” were met. These rules have not been enforced to any significant degree, and indeed, may be unenforceable. The result has been the proliferation of MLM programs to the point that thousands of MLMs have come and gone since 1979. and several hundred remain. World wide, tens of millions of MLM victims have lost tens of billions of dollars as a result of “the great FTC blunder” – the 1979 Amway decision. However, in fairness to the FTC, if FTC prosecutors would have had the research available in 1979 that is available today, the ruling might have been entirely different. Had Amway been ruled an illegal pyramid scheme, you would not be reading this today, and millions of victims might have been spared financial loss. (See MLM Regulation and Law Enforcement.) Incidentally, the FTC has proposed a Business Opportunity Rule that would require
Related Questions
- If MLMs are an unfair trade practice and depend on deception for their growth and survival, why has the FTC allowed MLM to go forward at all?
- WHAT HAPPENS WHEN AN INSURANCE COMPANY OR AGENT IS SUSPECTED OF VIOLATING THE INSURANCE UNFAIR TRADE PRACTICE ACT?
- What is an unfair and deceptive trade practice?
