FTC's $225 Million Amway Settlement Closes a 47-Year Loop on America's Founding MLM Case

The Federal Trade Commission and the Washington state attorney general have filed a proposed federal court order requiring Amway Corp. and two affiliated organizations to pay $225 million, the largest monetary settlement the FTC has ever extracted from a multilevel marketing company. The filing, in Case No. 2:26-cv-3474, was submitted jointly on September 17 and still requires a judge's approval before it becomes binding.

The case names three defendants. Alongside Amway Corp. itself, the complaint targets World Wide Group LLC and Leadership Team Development Inc., independently operated "motivational organizations" that run the training sessions, conferences and events used to recruit and retain Amway's Independent Business Owners. According to the FTC, the bulk of the deceptive conduct centers on WWG and LTD's recruiting pipeline: pitching prospective distributors with earnings claims exceeding $40,000, then pushing them to buy inventory and training packages they neither wanted nor could resell. The FTC says the alleged harm is concentrated among people who joined WWG and LTD after 2020.

Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, framed the order as a landmark result for an industry the agency has struggled to rein in through litigation. Amway disputes the characterization. A company spokesperson said Amway "fundamentally disagree[s] with the agencies' characterization" of its business, pointing instead to its existing requirements governing how distributors conduct business. The order remains a negotiated settlement, not an adjudicated finding of wrongdoing.

Nearly all of the $225 million is earmarked for consumer redress, a structure that echoes the FTC's 2016 settlement with Herbalife, which required $200 million in payments and a restructured compensation plan, with checks eventually reaching roughly 350,000 people. The Amway figure surpasses that recovery, though both cases resolved without a trial.

That negotiated posture stands in sharp contrast to the FTC's most recent courtroom outcome against an MLM. In September 2023, a federal judge in the Northern District of Texas rejected all five of the agency's claims against Neora LLC, including pyramid-scheme allegations, after a full trial. The FTC did not appeal, leaving the ruling as a live precedent the Direct Selling Association has since cited as validation of the industry's structure. Settling with Amway rather than litigating avoids testing that precedent again in court.

The company at the center of the new order is also the defendant in the case that built the legal foundation MLMs have relied on for nearly five decades. In the 1979 ruling that closed In re Amway Corp., the FTC found the company was not operating a pyramid scheme, crediting a "70% rule" requiring distributors to resell most of their inventory before reordering, along with a buyback policy for unsold goods. That decision, alongside findings of price-fixing and exaggerated income claims, became the template hundreds of later MLMs used to structure their compensation plans around pyramid-scheme statutes. A $225 million order against the same company, on similar earnings-claim allegations, arrives 47 years after that founding case.

Amway has faced earnings-claim disputes before. A U.S. class action in 2007 settled such allegations, and the company has drawn regulatory action abroad, including an advertising ban imposed by authorities in Andhra Pradesh, India, in 2008 and the arrest of its India chief executive in Kerala in 2013.

The settlement lands as Amway's global sales have declined for four consecutive years, from roughly $9.5 billion in 2015 to $7.3 billion in 2025, a slide the company has attributed partly to competition from gig-economy alternatives drawing away the same pool of prospective recruits. Amway's own 2024 income disclosure statement shows Independent Business Owners who made at least one sale averaged $1,199 a year in earnings before expenses, a figure that sits far below the $40,000-plus pitch the FTC says WWG and LTD used to recruit new distributors.

Amway remains privately held, founded in 1959 by Rich DeVos and Jay Van Andel and still controlled by their families. Betsy DeVos, who served as U.S. Secretary of Education from 2017 to 2021, married into the family, and the DeVos and Van Andel families have long ranked among the Republican Party's largest donors.

The proposed order now goes to a federal judge for review. The FTC's complaint and the stipulated order lay out the specific counts charged, including claims under the FTC Act and the Business Opportunity Rule, alongside state consumer protection claims brought separately by Washington's attorney general, texts that will determine how much of the $225 million reaches the distributors the agency says were misled.