The Federal Trade Commission (FTC) has issued a permanent order prohibiting Forever Living Products International LLC and its top executives from making deceptive earnings claims to consumers. This action resolves FTC allegations that the company misled participants about the likelihood of making profits through its multilevel marketing (MLM) business.
The FTC complaint names Forever Living, CEO Gregg Maughan, and President Aidan O’Hare, asserting that they falsely promoted the potential for substantial income for individuals who become Forever Business Owners (FBOs). Despite claims that participants could earn money by selling health and wellness products or recruiting others to do so, the FTC found that most participants earned little or no income and many lost money after expenses.
According to company data cited by the FTC, at least 77% of FBOs who participated over the past five years did not receive any compensation. Furthermore, more than 89% of new participants failed to recover their initial start-up investment of over $300 even after two years involved in the program.
The FTC’s complaint highlights that Forever Living used marketing materials—such as online videos, social media posts, and printed brochures—featuring luxury cars, oversized checks, and promises of replacing full-time income to entice new recruits. For example, a video featured a statement by O’Hare claiming the company would pay out millions in bonuses, implying widespread financial success.
In addition, the FTC alleges that Forever Living’s public income disclosures misrepresented the proportion of participants making money. They suggested that many who did not earn income merely chose to purchase products at a discount rather than engage in selling or recruitment, a claim contradicted by internal data showing that nearly 90% of FBOs received no income at all.
The company’s training materials further encouraged new recruits to present earning opportunities in a misleadingly positive light, such as showing pictures of company incentives and asserting that participants could earn significant income. Claims about earning commissions from downline recruits were also deemed misleading by the FTC, as only about 7% of FBOs received such payments.
The FTC’s final order requires Forever Living and its executives to have a reasonable basis for any earnings claims and to provide evidence if requested by consumers. They are also barred from misrepresenting participants’ earnings, reasons for lack of income, or the likelihood of recruiting others.
The U.S. District Court for the District of Arizona approved the complaint and stipulated final order, following a unanimous 2-0 vote by the FTC Commissioners. The enforcement action was led by staff from the FTC’s Bureau of Consumer Protection.
Why it matters
This order protects consumers from deceptive marketing practices that can divert individuals from legitimate income opportunities and cause financial harm. It underscores the FTC’s commitment to holding MLM companies accountable for truthful representations of potential earnings.
Background
Forever Living is a multilevel marketing company selling health and wellness products. MLM businesses typically rely on recruitment of distributors who also sell products, creating a “downline” structure. The FTC has taken prior action against MLM companies that make unsubstantiated income claims, emphasizing transparency and fairness in business opportunities.
Read more Digital Policy stories on Goka World News.
Sources
This article is based on reporting and publicly available information from the following source: