FTC Bars MLM Leaders from Making False Earnings Claims

The Federal Trade Commission (FTC) has filed a complaint and issued an order against Steven and Gina Merritt, high-level participants in the multilevel marketing (MLM) company LifeWave, for deceiving potential recruits about how much money they could earn. The FTC alleges the Merritts made exaggerated and unsupported income claims to attract new participants, despite most individuals in the MLM earning little or no income.

According to the FTC complaint, the Merritts conducted recruiting meetings and posted videos promoting LifeWave’s health and wellness products, promising substantial earnings. For example, Gina Merritt stated in a May 2025 video that participants could make “$25,000 or more a week,” while Steven Merritt compared earnings to “a spigot full of $100 bills.” However, LifeWave’s 2024 income disclosure revealed that 79% of active participants earned no commissions and only 0.035% made over $25,000 per week.

The FTC’s settlement order prohibits the Merritts from misrepresenting earnings from LifeWave or other business ventures. They cannot make claims about anticipated or actual participant earnings unless the claims are truthful, documented in writing, and accompanied by evidence upon request. They are also required to inform their downline participants about the FTC’s allegations and the prohibition on deceptive earnings claims.

Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, emphasized the agency’s stance: “If you tell consumers they will make lots of money, you need to back up the claims.” This enforcement action follows a recent similar case targeting high-level MLM participants for misleading income statements.

The complaint and stipulated final order, filed in the U.S. District Court for the Southern District of Florida, aim to protect consumers from deceptive recruitment practices common in MLM schemes. The FTC vote authorizing this action was unanimous.

Why it matters

Multilevel marketing companies often rely on recruiting new participants with promises of lucrative earnings, but the majority of individuals typically earn little or nothing. The FTC’s action against the Merritts reinforces regulations requiring truthful income claims and safeguarding consumers from deceptive inducements that can lead to financial losses.

Background

LifeWave markets health and wellness products through a network of participants who earn commissions by selling products and recruiting others. Past FTC enforcement has targeted MLM operations and their leaders when income claims failed to reflect the reality faced by most participants. The agency continues to monitor and act against deceptive business practices in this sector.

Read more Digital Policy stories on Goka World News.