The FTC Just Gave MLMs a Free Pass — And That Should Worry You
The Federal Trade Commission quietly revised its Business Opportunity Rule in early 2026, and the biggest change? MLM companies no longer have to tell you how much money their distributors actually make.
Read that again. The one federal rule that forced MLMs to show you real earnings data before you signed up? Gone.
What Changed, Exactly?
The original Business Opportunity Rule required companies selling "business opportunities" to disclose key information upfront — things like how many participants earn money, average earnings at each level, and whether the opportunity involves inventory loading risks.
The revised rule now exempts multi-level marketing companies from these disclosure requirements. That means an MLM can recruit you without ever showing you that, say, 99% of their distributors lose money — a figure that\s disturbingly common across the industry.
Here\s the thing: when a company doesn\t have to show you the numbers, ask yourself why they wouldn\t do it voluntarily. If the numbers were good, they\d be shouting them from the rooftops.
Why This Is a Big Deal for Consumers
Let\s be real — this exemption creates three serious problems:
1. You\re flying blind. Without mandatory income disclosures, a potential recruit has no reliable way to evaluate whether an MLM opportunity is worth their time and money. The company\s own marketing materials? Those feature the top 1% earners, not the typical experience.
2. Bad actors just got bolder. Companies that were already skating the line between legitimate MLM and pyramid scheme now have even less regulatory pressure. That\s not a theory — it\s basic human behavior. Reduce oversight, and the worst players exploit the gap.
3. The people who can least afford it get hurt most. MLMs disproportionately target people in financial distress — stay-at-home parents, immigrants, people between jobs. These are folks who invest 00 to ,000+ in starter kits and inventory based on income promises that may never materialize.
What About the "Good" MLMs?
Fair question. Not every MLM is predatory, and some companies — like Amway and Herbalife — do publish income disclosure statements voluntarily. But here\s the catch: those disclosures are often buried in fine print and use averages that obscure how many people earn nothing at all.
If you\re evaluating an MLM right now, demand to see their income disclosure statement. If they don\t have one? That\s a red flag the size of a billboard.
What Distributors and Consumers Should Do Now
The FTC\s rule change doesn\t mean you\re powerless. It means you need to do the work the government is no longer doing for you:
- Check the company\s income disclosure — if they publish one. Look at median earnings (not averages) and what percentage of distributors earn more than they spend.
- Research on independent sites. Use platforms like MLMInfoPages to check trust scores, BBB ratings, and real user reviews before committing.
- Calculate your true costs. Add up the starter kit, monthly autoship requirements, conference fees, and marketing materials. Then ask: how many products do I need to sell monthly just to break even?
- Talk to people who left. The company will connect you with success stories. Seek out people who quit — their perspective is just as valuable.
Our Take
We\re not anti-MLM at MLMInfoPages. We review hundreds of companies and some of them run legitimate, product-focused businesses. But this FTC rule change is a step backward for consumer protection, full stop.
The MLM industry has a trust problem — the FTC\s own data shows that the vast majority of MLM participants lose money. The solution to that trust problem is more transparency, not less. Exempting MLMs from disclosure requirements is like removing nutrition labels from food and hoping companies will voluntarily tell you what\s inside.
Some will. Many won\t.
Bottom line: If you\re considering joining an MLM in 2026, the burden of due diligence just shifted entirely onto your shoulders. Do your research. Check the numbers. And if a company won\t show you their income data, walk away.
What do you think — should MLMs be required to disclose earnings data? Have you had an experience where better disclosures would have changed your decision? We\d love to hear from you.