—Michael Lyles, B1Daily

The Federal Trade Commission is turning up the heat on multi-level marketing recruiters who sold ordinary Americans a fantasy wrapped in luxury cars, motivational speeches, and Instagram hustle culture.

In a series of new enforcement actions, the FTC announced legal action against several high-ranking MLM participants accused of deceiving workers with wildly exaggerated income claims while recruiting them into business ventures where most participants allegedly earned little or nothing.

One of the most prominent cases targets Stormy Wellington, a top-level recruiter associated with companies including Total Life Changes and Farmasi. According to the FTC, Wellington allegedly promised recruits they could earn “six figures” or even become millionaires through MLM participation, despite company disclosures showing that only a tiny percentage of participants earned anywhere near those amounts.

The FTC also moved against Steven and Gina Merritt, high-level sellers connected to LifeWave, accusing them of making misleading claims about massive weekly earnings and passive income streams that supposedly “couldn’t stop.” Federal regulators say the reality looked far less glamorous. LifeWave’s own disclosures reportedly showed that 79% of active participants earned no commission at all in 2024.

For years, MLM culture has operated like a strange fusion of entrepreneurship seminar, church revival, and casino psychology.

Recruiters flood social media with luxury vacations, oversized bonus checks, rented Lamborghinis, and motivational speeches about “financial freedom.” The message is nearly always the same: escape your boring job, join the team, grind hard, become wealthy.

But according to regulators, the numbers often tell a much uglier story.

The FTC says many MLM participants either earn extremely little money or lose money outright after expenses such as product purchases, shipping costs, conference fees, and mandatory inventory purchases are factored in.

Online communities dedicated to exposing MLMs have been sounding alarms for years. Reddit discussions surrounding recent FTC actions repeatedly point toward public income disclosure statements showing shockingly low earnings among distributors. One widely shared post analyzing MLM disclosures claimed that most participants earned less than $84 monthly before expenses, while many earned nothing at all.

Another commenter bluntly summarized the sentiment spreading across anti-MLM spaces online:

“The MLM system is a scam.”

The FTC’s recent actions suggest federal regulators increasingly agree that deceptive recruitment tactics have become a serious consumer protection issue.

And this crackdown appears larger than just one or two influencers.

The agency has recently pursued multiple MLM-related cases involving deceptive earnings claims, including enforcement actions against Forever Living Products and additional high-ranking MLM recruiters.

What makes the issue especially controversial is who often gets targeted by these schemes.

MLMs frequently market themselves toward financially vulnerable groups: stay-at-home parents, low-income workers, immigrants, students, military spouses, and people desperate for flexible income opportunities. Recruiters often frame participation not simply as a job, but as empowerment, entrepreneurship, sisterhood, or even spiritual transformation.

Critics argue that emotional manipulation becomes part of the business model itself.

Social media accelerated the phenomenon dramatically. TikTok, Instagram, Facebook Live, and YouTube transformed MLM recruiting into a kind of digital prosperity gospel where every smiling selfie beside a rented Mercedes becomes bait for the next recruit.

And unlike traditional employment scams, MLMs often survive because they technically sell real products, vitamins, makeup, supplements, oils, skincare, wellness patches, energy drinks, while recruitment incentives operate in the background like hidden gears inside a slot machine.

That legal gray zone has frustrated regulators for decades.

Still, the FTC’s language in these new cases feels notably sharper. Officials specifically warned that deceptive earnings promises “divert workers away from genuine, income-generating jobs.”

That line cuts straight to the core of the controversy.

Because for many critics, MLMs do not merely waste money. They waste time, relationships, trust, and hope.

Friendships become sales funnels. Family dinners become recruiting opportunities. Every text message starts sounding like a business pitch wrapped in fake positivity and motivational quotes floating over sunset graphics.

Not everyone in MLMs is a scammer, of course. Many participants genuinely believe in the products or opportunity being sold. But regulators increasingly appear focused on the machinery above them: the top recruiters and influencers allegedly making enormous promises disconnected from statistical reality.

And the numbers continue haunting the industry.

FTC-linked research and consumer watchdog groups have repeatedly found that the overwhelming majority of MLM participants never achieve substantial profits.

The American dream has always produced hustlers.

But the FTC seems increasingly determined to draw a line between entrepreneurship and selling people a lottery ticket disguised as empowerment.

And for the glossy MLM empire built on “financial freedom” hashtags and staged private-jet photos, that line may finally be getting harder to blur.

—Michael Lyles, B1Daily