What the complaint alleges

• Amway, World Wide Group and Leadership Team Development promoted an unfair and deceptive multilevel marketing opportunity, according to the FTC and Washington.
• The complaint says the median Amway bonus in 2023 was $139 before expenses, while approved recruiting presentations showed annual bonus opportunities around $40,000.
• Amway’s data indicated that independent business owners, known as IBOs, directly purchased 77 percent of its U.S. products in 2023.
• A WWG presentation allegedly derived 96 percent of a featured IBO’s revenue from downline volume rather than retail margin.
• WWG and LTD leaders allegedly described paid training and recurring product purchases as essential steps toward success.
• The complaint says Amway expanded a customer sales reporting tool even though employees warned it was easy to manipulate.

The regulators’ argument is about more than low earnings. It is that the system itself allegedly converted recruits into the principal market for products and training.

In the recruiting math described by regulators, an IBO could be shown a path to roughly $40,000 a year. In the actual 2023 data cited in the complaint, the median total bonus was $139 before expenses.

That contrast is the center of a sweeping civil case brought by the Federal Trade Commission and the State of Washington against Amway Corp., World Wide Group, L.L.C. and Leadership Team Development, Inc. The plaintiffs allege that recruits were told substantial income was likely if they followed a prescribed system, even though most earned little, incurred product and training costs, and failed to recruit anyone.

The complaint describes a business in which points are generated when products are purchased from Amway. Those points can contribute to bonuses for the buyer and people above that buyer in the recruiting chain. The regulators say this structure encouraged IBOs to purchase premium-priced products themselves, then recruit others who would copy the same buying pattern.

All figures above are attributed to the plaintiffs’ complaint and the company data or records it describes.

The recruit allegedly became the customer

Amway presents IBOs as independent owners of businesses that sell consumer products. The complaint says the practical incentives pointed elsewhere. IBOs received point credit when they or online customers purchased products from Amway. Reselling a product already bought from Amway did not generate additional points.

Retailing was also difficult, the plaintiffs allege. Amway recognized that many products carried premium prices in crowded markets. IBOs generally could not sell through physical stores or non-Amway online marketplaces. At the suggested retail price, the gross margin on direct resale was about 10 percent before taxes, shipping and other costs.

The complaint alleges that training leaders filled the gap with a strategy called duplication. An IBO would establish a monthly buying pattern, recruit new IBOs and teach those recruits to repeat it. Downline product volume then moved through the bonus calculation for people above them.

The pitch began before prospects heard the name Amway

Most U.S. recruits entered through organizations Amway called Approved Providers. These groups were authorized to recruit IBOs and sell them training, including event tickets, audio recordings and phone app subscriptions. The two provider defendants were large operations. The complaint says WWG had more than 35,000 IBOs in 2023 and LTD had more than 28,000.

The recruiting approach described in the complaint was known as “The Process.” Prospects were allegedly told about access to successful mentors who had walked away from conventional jobs at a young age. Recruiters were instructed to delay identifying Amway or even describing the offer as multilevel marketing.

Amway was not portrayed as a passive outsider. The complaint says the company contracted with Approved Providers, imposed content standards, reviewed recruiting materials, attended events, met with leaders and retained the power to withhold bonuses or terminate participants. Amway also allegedly approved recruiting slides that showed mid-five-figure bonus opportunities.

The pitch and the figures cited by regulators

How the bonus engine magnified downline purchasing

Amway assigned products both Point Value, known as PV, and Business Volume, known as BV. According to the complaint, it cost roughly $3.43 to generate one PV at the time of filing. An IBO generating 150 PV in a month, about $500 in purchases and online sales, entered the 3 percent performance bonus bracket.

A WWG presentation described in the complaint showed an IBO with a 150 PV blueprint and no recruits receiving $522 in annual revenue. Yet sustaining that volume cost about $6,000 in product purchases over a year. The slide called the payment “Total Annual Earnings,” even though it did not subtract the product spending or training expenses.

The path to larger bonuses required group volume. Reaching the 25 percent bracket required 7,500 PV, equal to about $25,000 in monthly product purchases across an IBO and the downline. Platinum groups typically included dozens of IBOs. Diamonds, who needed six Platinum legs, generally had hundreds or thousands.

Training was sold as essential, and leaders shared the proceeds

WWG and LTD called their success systems “Core.” The steps included purchasing Amway products, attending paid events, subscribing to messaging and audio services, reading approved books and recruiting new IBOs. Leaders allegedly told participants that failure reflected a failure to follow the system.

The complaint says WWG and LTD leaders split profits from training sales, with payouts tied to the size of their downlines. Basic communication with an upline could also require a paid app. This put mentors in a dual role: they advised IBOs about what was necessary for success while sharing revenue from the training they recommended.

Amway required Approved Providers to waive training costs for IBOs during their first contract year beginning in 2024. The complaint notes that Amway compensated the providers after the change reduced their revenue. After the first year, annual costs for the main services ranged from roughly $1,600 to $3,600, before travel and other expenses.

The bonus distribution was steeply concentrated

The $139 median was not a net-income figure. It represented bonuses before product purchases, training, event travel or other expenses. The complaint’s decile data show how rapidly payments rose near the top.

Each decile represented about 24,000 IBOs, according to the complaint. Ninety percent received less than $1,756 in bonuses in 2023. Those figures did not account for any expenses.

The pressure to buy products for points

The complaint says WWG and LTD leaders promoted monthly “blueprints” of about $500 or $1,000 in purchases and online sales. New IBOs were encouraged to establish recurring Day 1 DITTO orders. Leaders described personal consumption as a foundation of the business and a standard that recruits should copy.

Some recorded statements focused openly on points rather than product value. One LTD leader allegedly told IBOs to eat an energy bar because it contained “P frickin’ V,” regardless of taste. Another leader said the price did not matter because buying Amway products could help build the desired life.

The result, according to company data cited by the plaintiffs, was that IBOs directly purchased more than three-quarters of Amway’s U.S. products from 2020 through March 2024. In 2023, the figure was 77 percent. The complaint also says the vast majority stopped buying Amway products after leaving the opportunity.

How “verified” customer sales could allegedly be faked

Amway’s revised sales rule nominally required 70 percent customer sales, but 10 percentage points could be counted as samples or sales support. In practice, IBOs needed to report customer sales equal to at least 60 percent of their monthly blueprint to protect bonuses for themselves and their uplines.

The company called the resulting data Verified Customer Sales, or VCS. The complaint alleges that the label overstated the verification. Amway’s Create a Receipt tool allowed an IBO to buy products with a personal credit card, ship them home and later report a resale by entering a customer name, date and valid phone number. The purported customer did not need to receive a receipt.

The plaintiffs say provider leaders taught IBOs to register personal businesses, relatives or pseudonyms as customers, route personal purchases through those accounts, or report samples and household consumption as sales. The complaint further alleges that leaders suggested burner phones because the system mainly checked whether a phone number worked and was not already associated with another Amway account.

Internal warnings did not end the alleged conduct

The complaint relies heavily on internal language showing that Amway employees understood the gap between recruiting claims and participant outcomes. A 2020 script by the former CEO of Amway’s parent company described “poor earnings,” “high churn” and a cycle of recruitment and self-consumption among new IBOs.

Reviewers also flagged claims about paying off debt, quitting jobs and becoming stay-at-home parents as atypical or unrealistic. Yet the plaintiffs say Amway imposed little meaningful discipline. One account representative learned that only 13 breach letters had been sent to Approved Providers for content violations from 2017 through 2021 and wrote that the company could probably issue that many in a week. The vice president of sales replied, “Sad, but true!”

The company did make changes. It waived first-year registration and training charges, revised pricing, created a customer sales incentive and tied bonuses to reported customer sales. The complaint’s position is that these measures did not alter the fundamental incentives and, in the case of reported customer sales, produced records that were easy to manipulate.

The human cost alleged by the government

The complaint says young adults were the principal recruitment targets in recent years, with most new WWG and LTD members under 35 and many in their 20s. Many had annual incomes below $50,000. They were offered a route away from decades of conventional work, debt and limited family time.

For IBOs who started from 2020 through 2023, median bonuses plus online retail margin through March 2024 were below $100 for each cohort, according to the complaint. The average and median amounts received were lower than the corresponding amounts spent on Amway products. For matched WWG and LTD members, payments were also lower than training spending.

Most left. Between 70,000 and 130,000 new IBOs joined and bought or sold a product in each year from 2020 through 2023, while more than 100,000 left annually. The complaint characterizes the resulting injury as losses of money, time and effort. It does not provide a final aggregate loss figure.

What the regulators want the court to order

The FTC alleges four violations of federal law: unfair operation of the opportunity, misleading earnings and recruiting representations, misleading claims about exclusive mentoring, and misrepresentations suggesting false customer sales records were legitimate. Washington adds deceptive-practices and unfair-practices claims under its Consumer Protection Act.

What this filing does not establish

No court finding appears in the supplied record. The complaint does not establish liability, quantify a final restitution amount or show how the defendants will answer the allegations. It also does not include a defense of the compensation plan, the Approved Provider structure or the VCS system from Amway, WWG or LTD.

Those limitations matter. So does the specificity of the filing. The plaintiffs have not built their case only from disappointed participants. They cite bonus data, purchasing records, recruiting slides, training recordings and internal statements attributed to executives and employees.

The central allegation is therefore structural: the people presented as independent sellers were also the buyers supporting the system, while the largest modeled rewards depended on recruiting more buyers below them. Whether the plaintiffs can prove that case will determine whether the $40,000 pitch was merely an ambitious illustration or part of a deceptive machine.