# Case 2:26-cv-03474 > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aa61ff89bf9d4c023 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 1 of 83 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 9 10 11 12 13 14 15 16 17 18 FEDERAL TRADE COMMISSION, and STATE OF WASHINGTON, Plaintiffs, v. Case No. ____________ COMPLAINT FOR PERMANENT INJUNCTION, MONETARY JUDGMENT, CIVIL PENALTY JUDGMENT, AND OTHER RELIEF AMWAY CORP., also doing business as AMWAY NORTH AMERICA, a Virginia corporation, WORLD WIDE GROUP, L.L.C., a Washington limited liability company, and LEADERSHIP TEAM DEVELOPMENT, INC., a North Carolina corporation, Defendants. 19 20 21 22 23 24 25 26 COMPLAINT - 1 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 2 of 83 TABLE OF CONTENTS 1 2 I. SUMMARY OF THE CASE .............................................................................................. 5 3 II. JURISDICTION AND VENUE ....................................................................................... 11 4 III. THE PARTIES.................................................................................................................. 12 5 6 7 8 9 10 A. PLAINTIFFS ........................................................................................................ 12 B. DEFENDANTS .................................................................................................... 12 IV. COMMERCE.................................................................................................................... 13 V. DEFENDANTS’ BUSINESS ACTIVITIES .................................................................... 13 A. 11 BACKGROUND ON AMWAY AND ITS APPROVED PROVIDERS AND IBOS ............................................................................................................ 13 12 13 14 15 16 1. Amway And The Products Purchased By Its IBOs .................................. 13 2. Amway’s Control Over And Oversight Of Its Approved Providers......... 16 3. Amway’s Largest Approved Providers: WWG And LTD ...................... 19 4. The Leaders Of The Approved Providers Split The Profits From The Training They Sell IBOs And Claim Is Essential For Success ................. 20 17 18 19 20 21 22 23 5. B. AMWAY’S AND THE APPROVED PROVIDERS’ DECEPTIVE REPRESENTATIONS ......................................................................................... 26 1. The Deceptive Process For Recruiting New IBOs ................................... 26 2. The Deceptive Claims That Being “Core” Will Practically Guarantee Substantial Income And That Recruiting New IBOs Is Easy ................... 32 24 25 26 Overview Of Amway’s System Of Bonuses And “Pins” ......................... 23 3. Median Annual Bonuses For IBOs Before Expenses Are Just A Few Hundred Dollars ........................................................................................ 37 COMPLAINT - 2 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 4. 1 C. 3 4 AMWAY INCENTIVIZES AND THE APPROVED PROVIDERS PRESSURE NEW IBOS TO DO THE SAME ......................................................................... 46 7 1. 8 Impossible ................................................................................................. 46 10 11 2. 12 The Approved Providers And IBO Leaders Tell IBOs To Focus On Recruiting Instead Of Customer Sales ...................................................... 49 13 3. 14 The Approved Providers And IBO Leaders Tell IBOs To Buy Amway Products Themselves In Order To Build Their Business.......................... 57 15 4. 16 Amway’s Awareness Of Its Approved Providers’ Promotion Of The SelfConsumption Business Model .................................................................. 64 17 5. 18 19 24 Amway’s Compensation Plan Incentivizes Recruiting IBOs And Obtaining Substantial Bonuses From Product Sales Alone Is Virtually 9 23 The Deceptive Pitch For Side Income Of A Few Hundred Or A Few PURCHASE, FAKE SALES TO PURPORTED CUSTOMERS, AND RECRUIT 6 22 Page 3 of 83 IBOS TO BUY AMWAY PRODUCTS THEY WOULD NOT OTHERWISE 5 21 Filed 09/17/26 Thousand Dollars Annually ...................................................................... 43 2 20 Document 1 Amway And The Approved Providers’ Recent Efforts To Hide The Personal Consumption Model ................................................................... 68 VI. VIOLATIONS OF THE FTC ACT .................................................................................. 75 VII. VIOLATIONS ALLEGED ............................................................................................... 75 COUNT ONE – UNFAIRNESS ................................................................................................... 75 COUNT TWO – MISREPRESENTATIONS REGARDING EARNINGS 25 AND RECRUITING ......................................................................................................... 76 26 COUNT THREE – MISREPRESENTATIONS REGARDING SERVICES PROVIDED ......... 77 COMPLAINT - 3 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 2 7 8 Page 4 of 83 COUNT FIVE – VIOLATIONS OF CONSUMER PROTECTION ACT (WASH. REV. CODE § 19.86.020 / DECEPTIVE ACTS AND PRACTICES) ............. 78 COUNT SIX – VIOLATIONS OF CONSUMER PROTECTION ACT 5 6 Filed 09/17/26 COUNT FOUR – MISREPRESENTATIONS REGARDING CUSTOMER SALES ................ 77 3 4 Document 1 (WASH. REV. CODE § 19.86.020 / UNFAIR ACTS OR PRACTICES) ....................... 80 VIII. CONSUMER INJURY ..................................................................................................... 81 IX. PRAYER FOR RELIEF ................................................................................................... 81 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 COMPLAINT - 4 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Filed 09/17/26 Page 5 of 83 Plaintiffs, the Federal Trade Commission (“FTC” or “Commission”) and the State of 1 2 Document 1 Washington (“State”), for their Complaint allege: 1. 3 The FTC brings this action for Defendants’ violations of Section 5(a) of the FTC 4 Act, 15 U.S.C. § 45(a). Defendants promote and operate an unfair and deceptive direct selling 5 and multi-level marketing opportunity. For these violations, the FTC seeks relief, including a 6 permanent injunction and other relief, pursuant to Sections 5(a)(1) and 13(b) of the FTC Act, 15 7 U.S.C. §§ 45(a)(1), 53(b), against Defendants Amway Corp., World Wide Group, L.L.C., and 8 Leadership Team Development, Inc. 2. 9 The State brings this action for Defendants’ violations of the Washington 10 Consumer Protection Act, Wash. Rev. Code § 19.86 (“CPA”). For these violations, the State 11 seeks relief, including injunctive relief, civil penalties, restitution, and other relief, pursuant to 12 the CPA, Wash. Rev. Code §§ 19.86.080 and 19.86.140, against Defendants Amway Corp., 13 World Wide Group, L.L.C., and Leadership Team Development, Inc. 14 I. 15 SUMMARY OF THE CASE 3. Amway Corp. (“Amway”) offers a money-making opportunity in the United 16 States that it claims gives people the chance to own and operate their own business selling 17 consumer products. Consistent with this positioning, Amway uses the terms “Independent 18 Business Owner” or “IBO” to describe consumers who sign up for Amway’s multi-level 19 marketing program. Despite its claims that IBOs can make money by selling Amway products to 20 customers, Amway’s products are priced at premium levels and therefore are difficult to sell to 21 non-IBOs. As one of Amway’s highest-ranking executives put it in a slide presentation he 22 prepared in 2019, IBOs who are new find that “[s]elling to customers is not rewarded, not taught 23 by leaders and difficult.” 24 4. In Amway, new IBOs are recruited into the business by existing IBOs, who 25 typically require their recruits to also join groups affiliated with Amway. These groups sell 26 training to IBOs that the recruiters and IBO leaders of the groups claim is essential to becoming COMPLAINT - 5 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 6 of 83 1 a successful IBO. The training groups do not teach IBOs that selling Amway products to 2 customers is the key to making money in the Amway business. Instead, they instruct IBOs to 3 buy a set amount of products each month, regardless of whether the IBOs can resell or actually 4 want them, in order to generate points that are used in calculating what Amway calls “bonuses” 5 that it pays to both the IBOs who purchase Amway products and the IBOs who recruited them. 6 As one IBO leader put it in a January 2023 training session for IBOs, “We’re rich because we’ve 7 always used our own products.” The IBO leaders of the training groups also instruct new IBOs 8 to try to recruit more people into Amway and to tell them to buy a set volume of products from 9 Amway each month in order to make money. This practice is known as “duplication” because 10 new IBOs are supposed to duplicate the purchasing patterns of the IBOs who recruited them. 11 5. The result of these directives is that Amway’s IBOs buy most of the company’s 12 products themselves. In recent years in the U.S., Amway has sold more than three-quarters of its 13 products to its own IBOs. Most IBOs, however, stop pursuing the business once they realize the 14 monthly cost of purchasing Amway’s pricey products usually exceeds any “bonuses” they 15 receive. When they leave Amway, the vast majority of IBOs stop buying Amway products 16 altogether, as they are no longer trying to generate points used in determining bonuses. Much of 17 the Amway business, therefore, is driven by selling products to IBOs who are buying them to try 18 to make money through recruiting and duplication, as opposed to selling products to customers 19 who genuinely want them. 20 6. In 2019 and the early 2020s, Amway began making a series of changes to its 21 business, but these changes were superficial and did not meaningfully change how Amway 22 operates. The centerpiece of this effort was designed to thwart any government investigation 23 into Amway’s business model by making it appear that most of Amway’s products were 24 eventually sold to customers. To accomplish this, in early 2021, Amway expanded a system for 25 IBOs to report that they resold products they purchased to customers, which Amway’s own 26 employees characterized as “easy to manipulate.” Around the same time Amway told the leaders COMPLAINT - 6 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 7 of 83 1 of its training groups that it would restrict their bonuses if they did not help the company 2 generate purported customer sales “data” for the company. Thereafter, on a widespread basis, 3 the leaders of groups that sell training to IBOs told their members to falsely report that they 4 resold most of their product purchases to customers or to use other methods to fake customer 5 sales. 6 7. While many IBOs complied with these directives, the false reports of customer 7 sales they provided to Amway have not changed the true nature of the business. Amway and the 8 training groups still incentivize and encourage IBOs to buy Amway products, regardless of 9 whether they want them or can resell them to customers, and to recruit new IBOs to do the same. 10 Accordingly, Amway operates and the training groups promote the Amway multi-level 11 marketing business in an unfair manner, which results in IBOs and their recruits purchasing 12 Amway products for reasons other than genuine demand for them in a near-futile effort to make 13 money while faking their customer sales. *** 14 15 8. In recent years, young adults have been the principal targets of Amway recruiters, 16 and many of them have incomes below $50,000 a year. Like many deceptive money-making 17 opportunities, Amway is pitched to prospects as a way to avoid the drudgery of working a 18 traditional job for decades. Prospects are told that running an Amway business will likely 19 replace the income from their full-time job, ensure they can spend more time with their family, 20 and even make them enough to allow them to retire at a young age. To do so, prospects and 21 IBOs are told they simply need to take the business seriously and follow a purported “system” 22 for success developed by certain high-ranking IBO leaders for a few years. As Brad Duncan, the 23 IBO leader of the largest training group put it in a May 2021 talk to IBOs, “[I]t’s the simplest 24 thing in the world. … [Y]ou’re all going to be living in the most beautiful homes in the world, I 25 will promise you, if you will treat this like a business. I promise.” 26 9. In the U.S., most people who sign up for Amway are recruited by IBOs who are COMPLAINT - 7 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 8 of 83 1 members of training groups, which Amway calls “Approved Providers.” As the name implies, 2 Approved Providers are authorized by Amway to recruit new people into Amway and then sell 3 them “training” that includes audio recordings, live events, and subscriptions to phone apps. 4 Amway has rules that outline how Approved Providers and IBOs are allowed to recruit and train 5 new IBOs, which the Approved Providers regularly violate. Amway executives are well aware 6 of this fact, but the company does little to police violations relating to deceptive claims that the 7 IBO leaders of the Approved Providers make to prospects and IBOs. Since Amway relies on the 8 Approved Providers to recruit new IBOs to buy Amway products, Amway benefits from these 9 deceptive claims. 10 10. Two of the largest Approved Providers in the U.S. are World Wide Group, L.L.C. 11 (“WWG”) and Leadership Team Development, Inc. (“LTD”). Although they are based on 12 opposite coasts, WWG and LTD recruit in similar ways and provide similar training to IBOs. 13 WWG and LTD are owned and controlled by a small number of high-level IBOs who split the 14 profits from the training sales with the IBO leaders of each group. These leaders also pressure 15 IBOs to buy the training and tell IBOs it is essential to making money in Amway. 16 11. To entice people to sign up with Amway, WWG and LTD IBOs use a variety of 17 deceptive tactics. Instead of being told about Amway, its products, or a multi-level marketing 18 opportunity, many prospects are initially lured in with deceptive claims about an exclusive 19 opportunity to be mentored by a person or couple who made so much money they were able to 20 stop working in their 20s or 30s. The opportunity is deliberately described this way to allow the 21 IBO recruiter to obfuscate when asked what the opportunity is by saying the answer is something 22 the person or couple needs to explain to the prospect, among other things. 23 12. In recent years, for example, multiple IBO leaders in WWG have instructed IBOs 24 to tell prospects they “connected with a couple that were able to walk away from their jobs at 28 25 & 33. That blew our minds so we pursued them & convinced them to spend some time with us. 26 As a matter of fact they agreed to take us under their wing. And right now they are in the COMPLAINT - 8 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 9 of 83 1 process of coaching and mentoring us … so we can accomplish similar results in our life so we 2 can stop sacrificing our life for a job.” Contrary to these claims, few IBOs are directly mentored 3 by anyone that successful. Rather, their mentors are typically other IBOs trying to make money 4 in Amway, who work traditional jobs or their Amway business. Moreover, the opportunity is not 5 an exclusive one, and anyone who follows the instructions of their recruiter during the recruiting 6 process gets an “offer” to join Amway and an Approved Provider. 7 13. Amway authorizes its Approved Providers to present the business as a way to 8 make $40,000 a year, and groups such as WWG and LTD tell prospects that if they follow their 9 special system for running an Amway business, they will likely make that much or more. For 10 example, in a March 2023 online training, a WWG leader, Maiko Tuitupou, told IBOs that if 11 they developed a “consistent work habit … it’s not a matter of if, it’s a matter of when” they will 12 achieve the levels associated with mid-five figure annual bonuses. Similarly, in a January 2025 13 training in Kansas City, Missouri, an LTD leader claimed a young IBO had built a six-figure 14 Amway business just by following the “recipe” for success: “This works. This is a man who 15 just followed the recipe of” recruiting and generating product volume “for a couple years.” 16 14. In fact, most IBOs come nowhere near the dollar figures that appear in the 17 Approved Providers’ slide presentations for prospects, which are approved by Amway. In 2023, 18 for instance, median total bonuses (before expenses) for IBOs were only $139, and IBOs often 19 spend more on training they buy from Approved Providers than they receive in bonuses. Among 20 IBOs who joined WWG and LTD between 2020 and 2023, average and median bonuses were 21 less than the average and median amounts they spent on training through March 2024. In 22 contrast, only about 1 percent—fewer than 1,600 IBOs out of more than 241,000 IBOs— 23 received $40,000 or more in bonuses from Amway in 2023. 24 15. Amway’s main product lines are nutritional supplements, energy drinks and bars, 25 and makeup and skin care products. All of these products compete in crowded markets with 26 numerous alternatives, and most of them have premium pricing. For example, a case of water COMPLAINT - 9 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 10 of 83 1 from Amway, which is one of the most frequently purchased products by IBOs, costs them more 2 than $45. IBO leaders in WWG and LTD tell IBOs that the easiest way to generate points for 3 bonuses is to buy Amway’s pricey products for themselves, regardless of whether they like them 4 or their cost. In June 2022, for instance, one IBO leader told IBOs in a training session that 5 when she started in Amway, its energy bars came in two flavors, “yuck and yuckier,” but she ate 6 them anyway because it “created volume.” Similarly, other IBO leaders have instructed IBOs to 7 buy products for their point value while adding that they “never cared” how much Amway 8 products cost and “don’t care” whether they “taste[] good” or are better than their competitors. 9 16. In Amway, as in other multi-level marketing businesses, anyone an IBO recruits 10 is referred to as part of their “downline,” along with anyone those recruits are able to recruit as 11 well as the recruits of those recruits and so on. Consistent with the incentives in what Amway 12 calls its “compensation plan,” the Approved Providers tell prospects and IBOs to try to make 13 money by recruiting people into the business because IBOs’ bonuses increase when their 14 downlines buy Amway products. More specifically, when IBOs buy Amway products, such 15 purchases typically generate points that flow “upline” to the IBO who recruited them, and then 16 from that IBO to the next IBO further up the recruiting chain and so on. 17 17. In recruiting and training presentations, WWG and LTD tell prospects and IBOs 18 to recruit 6 to 12 IBOs themselves and to help those new IBOs to recruit as well. According to 19 these standardized presentations, which Amway approves, IBOs who build a team of 25 to 48 20 IBOs will have “earnings” of about $40,000 a year. In WWG’s standard presentation, less than 21 $1,000 of that sum is derived from retail margin from selling products to customers. The bulk of 22 the remainder—more than $38,000—comes from points generated by downline recruits. In other 23 words, in WWG’s own demonstration of how to be a successful IBO, 96 percent of the IBO’s 24 revenue comes from recruits. 25 26 18. Since recruiting is necessary to obtain substantial bonuses, the leaders of WWG and LTD also make deceptive claims to prospects and IBOs about the likelihood that they will be COMPLAINT - 10 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 11 of 83 1 able to recruit new IBOs. These leaders tell prospects and IBOs that it is “not very hard” to 2 recruit 6 to 12 IBOs a year, but, in fact, it is very difficult. A majority of IBOs fail to recruit a 3 single new IBO each year, and the average number of recruits per IBO per year is less than one. 19. 4 While IBOs are struggling to find new recruits, the IBO leaders of WWG and 5 LTD also tell IBOs it is essential that they purchase the Approved Providers’ training and 6 substantial quantities of Amway products each month in order to make money. In 2024, Amway 7 required its Approved Providers to waive all training costs for IBOs in their first year, but the 8 annual cost of the main training services for WWG and LTD IBOs in their second year and 9 beyond ranges from approximately $1,600 to $3,600. Given the difficulty of making more from 10 their Amway business than they spend on training or products, many IBOs do not stay in Amway 11 for long, and the Amway business churns through IBOs each year. In the years 2020 to 2023, 12 between 70,000 and 130,000 new IBOs joined Amway, and over 100,000 IBOs left the 13 opportunity each year. 20. 14 These figures are consistent with how the former CEO of Amway’s parent 15 company, described Amway’s global business in 2020. In a “script” that he “penned” himself 16 for an internal presentation, the former CEO wrote that the business was characterized by “[p]oor 17 earnings” for “new” IBOs, “high churn,” and “a vicious cycle- of recruitment and self 18 consumption” of Amway products by IBOs. In other words, the Amway business relies on 19 continually recruiting new IBOs to buy Amway products while making little in the way of 20 bonuses. These realities are a far cry from the deceptive promises made to new IBOs in WWG 21 and LTD, who are told they are likely to replace the income from their job or even retire early if 22 they just follow a few simple steps laid out by longtime IBO leaders. 23 II. JURISDICTION AND VENUE 24 21. 25 and 1345. 26 22. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), This Court has supplemental jurisdiction over the State’s state law CPA claims COMPLAINT - 11 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 12 of 83 1 because those claims are integrally related to the FTC’s federal law claims and are part of the 2 same case or controversy. 28 U.S.C. § 1367(a). 23. 3 Venue is proper in this District under 28 U.S.C. §§ 1391(b)(2), (c)(2), and (d), 4 1395(a), and 15 U.S.C. § 53(b). 5 III. THE PARTIES 6 A. PLAINTIFFS 7 24. The FTC is an agency of the United States Government created by the FTC Act, 8 which authorizes the FTC to commence this district court civil action by its own attorneys. 15 9 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which 10 prohibits unfair or deceptive acts or practices in or affecting commerce. 25. 11 The State is the State of Washington, acting by and through the Consumer 12 Protection Division of the Washington Attorney General’s Office. The Washington Attorney 13 General has the authority to commence this action pursuant to Wash. Rev. Code §§ 19.86.080 14 and 19.86.140 to address practices that violate the CPA. 15 B. DEFENDANTS 16 26. Defendant Amway Corp. is a Virginia corporation with its principal place of 17 business at 7575 Fulton Street East, Ada, Michigan 49355. Amway transacts or has transacted 18 business in this District and throughout the United States. At all times relevant to this 19 Complaint, acting alone or in concert with others, Amway has advertised, marketed, distributed, 20 or sold the Amway business opportunity, along with Amway products, throughout the United 21 States. 22 27. Defendant World Wide Group, L.L.C. (“WWG”) is a Washington limited liability 23 company with its principal place of business at 717 S. Pines Road, Spokane Valley, Washington, 24 99206. WWG transacts or has transacted business in this District and throughout the United 25 States. At all times relevant to this Complaint, acting alone or in concert with others, WWG has 26 advertised, marketed, distributed, or sold products and services related to the Amway business COMPLAINT - 12 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 Document 1 Filed 09/17/26 Page 13 of 83 opportunity and Amway products throughout the United States. 28. 2 Defendant Leadership Team Development, Inc. (“LTD”) is a North Carolina 3 Corporation with its principal place of business at 3209 Gresham Lake Road, Suite 153, Raleigh, 4 North Carolina 27615. LTD transacts or has transacted business in this District and throughout 5 the United States. At all times relevant to this Complaint, acting alone or in concert with others, 6 LTD has advertised, marketed, distributed, or sold products and services related to the Amway 7 business opportunity and Amway products throughout the United States. 8 IV. COMMERCE 29. 9 At all times relevant to this Complaint, Defendants have maintained a substantial 10 course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 11 15 U.S.C. § 44. 12 30. At all times relevant to this action, Defendants, and each of them, have been 13 engaged in trade or commerce within the meaning of the CPA, Wash. Rev. Code § 19.86.010(2). 14 V. 15 DEFENDANTS’ BUSINESS ACTIVITIES A. BACKGROUND ON AMWAY AND ITS APPROVED PROVIDERS AND 16 IBOS 17 1. 18 31. Amway And The Products Purchased By Its IBOs Amway is part of a group of companies that sell consumer products and offer a 19 multi-level marketing opportunity around the world. The “Amway Corp.” entity, which is also 20 known as Amway North America, operates in the U.S., Canada, the Dominican Republic, and 21 many other island countries and has U.S. revenues of about $1 billion annually. According to a 22 2023 list published by Amway of the “Top Ten Markets” globally for Amway and its affiliates, 23 the U.S. ranks second, and the other nine markets on the list are in Asia. 24 32. Nearly all of Amway’s U.S. revenues are derived from product sales, and the vast 25 majority of those sales are made to IBOs themselves. In 2023, for example, Amway’s data 26 indicated IBOs purchased 77 percent of the products sold by Amway. When IBOs purchase COMPLAINT - 13 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 14 of 83 1 Amway products, those purchases generate points that are used in calculating what Amway 2 typically calls “bonuses” or “incentives” that it pays to IBOs (collectively “bonuses”). Although 3 IBOs can resell products that they buy from Amway to customers, reselling the products does not 4 generate additional points for IBOs. Rather, IBOs are credited with the point value of each 5 product when IBOs purchase them from Amway. 6 33. As a result, the IBO leaders of the Approved Providers tell IBOs to generate 7 points by buying Amway products themselves and claim this will help them make money in their 8 business. These leaders often encourage IBOs to buy a recurring order of Amway products, 9 which Amway calls a “DITTO,” on the first day of every month. Such purchases are often 10 referred to as a “Day 1 DITTO.” 11 34. Amway sells a wide range of consumer products to IBOs, but the bulk of its sales 12 come from three main product categories. Vitamins and nutritional supplements, which Amway 13 sells under the brand name Nutrilite, are Amway’s largest selling group of products and make up 14 over 40 percent of its sales. Amway’s next two largest product categories are: (i) energy drinks 15 and bars and (ii) makeup and skincare products, each of which constitutes about 15 percent of 16 sales. Amway’s energy drinks and bars are sold under the brand name XS, and the makeup and 17 skincare lines are mainly marketed under the brand name Artistry. 18 35. As Amway itself recognizes, many of its products have “premium” pricing and 19 compete in markets with many competitors. For example, Amway’s own website has a 20 Frequently Asked Question that asks, “Why Do Amway Products Cost More?” Similarly, a 21 2022 internal Amway marketing presentation admitted that one key Nutrilite product was 22 “similar” to another brand that was “priced ⁓80% lower per serving” and that Nutrilite’s main 23 multivitamin package was priced above the “Premium Benchmark” in a pricing study conducted 24 by an outside consultant. The presentation concluded that in terms of pricing, the “Nutrilite 25 brand will remain premium” even though many of the Nutrilite products did not have the 26 characteristics of its premium-priced competitors: “Many of our core Nutrilite products do not COMPLAINT - 14 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 15 of 83 1 contain attributes that drive customer willingness to pay premium or to compete even in mid- 2 tier.” The presentation also recognized that Nutrilite competes in a “hyper competitive” market 3 for vitamins and supplements. 4 36. Until recently, Amway priced its main multivitamin package, Double X, at $64 5 for a 31-day supply, and it was one of the top products purchased by IBOs. Another top product 6 bought by IBOs with premium pricing is bottled water even though it “is not a product with high 7 retail appeal,” as Amway’s former Vice President of Sales put it. Until recently, Amway priced 8 a case of water with 24 bottles containing 16.9 fluid ounces at $52. These prices were the ones 9 offered online to customers, and they effectively served as Amway’s suggested retail price. 10 When IBOs bought from Amway they received a 10 percent discount off the suggested retail 11 price. Given the pricing of Amway products and the crowded markets in which they compete, it 12 is difficult for IBOs to sell Amway products to non-IBO customers. In September 2026, Amway 13 revised its pricing structure and the prices shown on its public-facing website, but the minimum 14 suggested retail price is still 10 percent above the prices paid by IBOs. 15 37. Amway’s rules generally prohibit IBOs from selling Amway products through 16 brick-and-mortar stores or non-Amway online marketplaces. Instead, IBOs can try to sell 17 products to customers in two different ways. First, IBOs can try to resell the products they buy 18 and receive from Amway to customers. These transactions do not generate additional points for 19 IBOs. IBOs can set the price at which they resell products, but if they sell at Amway’s minimum 20 suggested retail price, the gross margin for such transactions is about 10 percent. When IBOs 21 purchase from Amway, they pay taxes and often pay shipping costs, which means the 10 percent 22 margin is reduced if they are not able to recover those costs when selling to customers. Second, 23 IBOs can encourage customers to buy products online from Amway. IBOs get credit for such 24 purchases by customers who identified the IBOs when registering as a customer or who make 25 purchases from a unique webpage Amway provides for each IBO. For these online purchases, 26 IBOs get points from Amway and a portion of the price paid by the customer. Until recently, COMPLAINT - 15 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 16 of 83 1 that portion was set at 10 percent, but starting in September 2026, that amount became more 2 variable. 3 38. As discussed further below, IBOs often fake their purported customer sales to 4 make it appear that IBOs are complying with recently-updated Amway rules. These rules were 5 designed by Amway to make it easy for IBOs to fake their sales and thereby make it appear that 6 the company is a sales organization as opposed to a money-making opportunity in which IBOs 7 end up buying Amway products they would not otherwise purchase in a near-futile attempt to 8 obtain substantial bonuses from Amway. 2. 9 10 39. Amway’s Control Over And Oversight Of Its Approved Providers Amway relies on the IBOs who are members of its Approved Providers to recruit 11 new IBOs. Prospects cannot simply sign up as an IBO on Amway’s website on their own. 12 Instead, they need to have an IBO sponsor to register on the website. Although Amway only 13 began closely tracking Approved Provider membership around 2024 and membership has fallen 14 since that time, Amway estimated prior to 2024 that most IBOs were members of an Approved 15 Provider group. 16 40. All of the Approved Providers are owned and run by IBOs who have achieved 17 high levels in Amway’s compensation plan. The larger Approved Providers, such as WWG and 18 LTD, have offices and full-time staff members, but those groups are still run by their high- 19 ranking IBO leaders. 20 41. Amway has nearly-identical contracts with each of its Approved Providers, 21 including WWG and LTD. These agreements give the Approved Providers the right to recruit 22 IBOs and then sell them training in the form of audio recordings, live events, and phone apps. 23 The contracts include certain “content standards” that outline the permissible and impermissible 24 ways in which the Amway opportunity can be marketed to prospects and training can be 25 provided to IBOs. The content standards, which are over 40 pages long, apply to virtually every 26 type of activity connected to the Amway business, including live events, “meetings,” any COMPLAINT - 16 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 17 of 83 1 training that is sold, “person-to-person” interaction, and social media groups. These standards 2 also apply to IBOs pursuant to separate agreements that Amway enters into with them. In 3 addition, under Amway’s rules, IBO leaders who share in the revenues generated by the training 4 sold by the Approved Providers must enter into an agreement with those groups in which they 5 agree to comply with Amway’s content standards. 6 42. Under its agreements with the Approved Providers, Amway has the right to 7 access their events for prospects or IBOs as well as electronic spaces used by the Approved 8 Providers with IBOs to determine whether they are complying with Amway’s content standards. 9 Amway can terminate an Approved Provider for breaches of its agreement, including the 10 “content standards.” Likewise, Amway can terminate IBOs for violating its standards or an 11 additional set of rules that are published in Amway’s Business Reference Guide for IBOs. The 12 rules in that guide provide that Amway can also impose sanctions, such as withholding bonuses, 13 on IBOs for violations of the rules or content standards. 14 43. Pursuant to their agreements with Amway, the Approved Providers are supposed 15 to submit all of their recruiting and training materials to Amway. These materials are known as 16 Business Support Materials (“BSM”), and Approved Providers such as WWG and LTD include 17 certifications with their BSM submissions to Amway that their BSM complies with Amway’s 18 content standards. Amway reviews all of the recruiting materials it receives, along with all 19 submissions related to its bonuses, and some of the other BSM. 20 44. Amway has the right to approve or not approve BSM. When Amway approves 21 BSM, it often requires the Approved Providers to edit them before they can be used or sold. 22 Amway is also aware that the Approved Providers often edit recordings of live events to remove 23 material that obviously violates content standards before submitting it as BSM, but these 24 statements have already been heard by the live audience, and Amway rarely takes action to 25 prevent speakers from repeating statements that violate its content standards in future events. 26 45. In addition to reviewing BSM, there are several other ways in which Amway COMPLAINT - 17 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 18 of 83 1 employees and executives oversee the Approved Providers and their IBO leaders. Amway has a 2 group of account representatives, who serve as liaisons between the company and IBO leaders of 3 the Approved Providers. Members of this group meet with these IBO leaders about their 4 businesses, discuss their efforts to recruit and retain IBOs, and have access to materials used by 5 the Approved Providers in recruiting and training IBOs. Members of this group often put 6 together “action plans” for Approved Providers and their IBO leaders to improve their 7 businesses. 8 46. Amway employees attend Approved Provider events, and Amway executives 9 regularly meet with the IBO leaders of the Approved Providers who serve as members of the 10 Board of Directors of the Independent Business Owners Association International, Inc. 11 (“IBOAI”). Amway also has a contract with the IBOAI, which provides that the IBOAI serves 12 as a “consultant” to Amway and must be notified of certain changes affecting IBOs in advance. 13 Amway executives meet with IBOAI leaders multiple times per year to discuss the Amway 14 business and potential changes to rules, bonuses, and any other aspect of the business. Amway 15 also invites IBO leaders to certain annual events in which they receive presentations and meet 16 with Amway executives. 17 47. With respect to recruiting events, Amway dictates the dollar amounts that 18 Approved Providers can present to prospects. In recent years, Amway has authorized the 19 Approved Providers to claim that IBOs can make more than $40,000 or more than $50,000 20 annually, depending on the year, even though those amounts are only obtained by about 1 21 percent of IBOs. Amway has approved the use of these annual figures or their monthly 22 equivalents in presentation slides, although IBO leaders often discuss higher amounts orally. In 23 addition, Amway has allowed the Approved Providers to show how IBOs who recruit 6 to 12 24 IBOs make those amounts even though Amway knows most IBOs fail to recruit a single new 25 IBO each year and the average number of recruits per IBO each year is less than one. 26 COMPLAINT - 18 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 3. 1 2 48. Document 1 Filed 09/17/26 Page 19 of 83 Amway’s Largest Approved Providers: WWG And LTD Since at least the late 2010s, there have been five large Approved Providers in the 3 U.S. that generated the most product sales for Amway. The Amway product purchases related to 4 members of those five groups make up about 60 percent of all products purchased from Amway 5 in the U.S. 6 49. In terms of members, WWG and LTD are the two largest Approved Providers in 7 the U.S., according to the records of the five largest providers. In 2023, WWG had more than 8 35,000 IBOs, and LTD had more than 28,000 IBOs. Tens of thousands of Washingtonians have 9 joined Amway and either WWG or LTD. 10 50. In recent years, IBOs in WWG purchased more Amway products than IBOs in 11 any other Approved Provider, and IBOs in LTD purchased the third-most. Since Amway’s 12 records do not distinguish between IBOs who start its sign-up process and those who finish its 13 sign-up process, references to IBOs in a given period in this Complaint are to those who bought 14 or sold an Amway product in that period unless otherwise indicated. 15 51. When prospects are recruited by IBOs in Approved Providers such as WWG and 16 LTD, they typically join both Amway and the Approved Provider around the same time. 17 Although Amway does not require IBOs to join an Approved Provider, those groups present the 18 business in a way that makes it clear that prospects are expected to join both Amway and the 19 IBO’s Approved Provider. 20 52. Although WWG and LTD operate throughout the U.S., WWG’s presence is 21 strongest in the West and on the West Coast, and the headquarters where its staff works is in 22 Spokane Valley, Washington. WWG, which used to be known as Worldwide Dreambuilders, is 23 owned by more than 25 IBOs who are members of WWG and have reached the level of 24 Diamond or above in Amway. Diamond is a very high-level rank in Amway’s multi-level 25 marketing structure. 26 53. Since the late 2010s, the undisputed leaders of WWG have been Brad and Julie COMPLAINT - 19 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 20 of 83 1 Duncan, who reached a level above Diamond that is known as “Crown.” The Duncans run their 2 Amway business together from the Las Vegas, Nevada area, as Amway rules require married 3 couples to pursue their business as a single IBO. 4 54. In recent years, several WWG Diamonds and other IBO leaders have lived in the 5 Seattle area. As a result, many of WWG’s monthly and quarterly meetings and training events 6 have been held near Seattle. Venues range in size from arenas like the Tacoma Dome to the 7 Lynwood Convention Center to hotel meeting rooms. 8 55. LTD’s headquarters for its staff is in Raleigh, North Carolina, where the Diamond 9 couple that owns LTD and other leaders of the group live. LTD’s presence is strongest in the 10 South and Midwest, and it has a small management group of Diamonds that includes a Diamond 11 who is also a member and former Chairman of the Board of Directors of the IBOAI. In recent 12 years, seven or eight of the 15 IBOAI Board members have been Diamond IBOs in WWG or 13 LTD. According to LTD, there are over 25 U.S.-based Diamonds in LTD. 4. 14 The Training They Sell IBOs And Claim Is Essential For Success 15 16 The Leaders Of The Approved Providers Split The Profits From 56. All of the main Approved Providers claim to have a “system” for success in 17 Amway, and IBO leaders continually tell IBOs their success is practically inevitable if they 18 follow it. In WWG and LTD, this system is called being “Core.” 19 57. Most of the various steps of being Core in both groups involve (a) purchasing 20 Amway products, (b) buying training or related services from the Approved Providers, or 21 (c) recruiting new IBOs to do the same things. There are 10 Core “Habits” in WWG, and 9 Core 22 “Steps” in LTD. The Core Habits and Core Steps are very similar, and a majority of them relate 23 to buying training from WWG or LTD. 24 58. The IBO leaders of WWG and LTD split the profits from the training those 25 groups sell to IBOs, and the payouts to leaders are based on the size of each leader’s downlines. 26 While IBO leaders try to hide the fact that they make money off the training, they claim that COMPLAINT - 20 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 21 of 83 1 buying training is essential to making money in Amway. These claims often take the form of 2 telling IBOs that being Core will practically guarantee success, and many of the training events 3 themselves consist of leaders talking about how each step of Core is critical for success. “Core” 4 is sometimes referred to as an acronym for “Change Or Remain Employed,” which refers to 5 having a traditional job. 6 59. In a June 2022 training in Washington, for instance, a WWG Diamond from 7 Northern California told IBOs: “Core is the answer. I think all of us have tried to find another 8 way to do it other than by being Core. There’s just no getting around it. … Core is the key. … 9 What are your dreams? This is the ticket.” Similarly, in a November 2023 training, an LTD 10 leader from the Dallas area told IBOs about the importance of buying the training that is part of 11 being Core: “I have learned from my mentors and coaches that I want to invest in my 12 development—books, audios, meetings, conferences, subscriptions, whatever it is, I am going to 13 invest in my development. I am good with that because, you know, the ROI … the Return on 14 Investment is incalculable!” 15 60. Uplines, who are IBOs above others in the recruiting chain, often make it nearly 16 impossible for their downlines to be “coached” or on their “team” unless they have access to the 17 Approved Provider’s communication systems, which IBOs must pay for. Basic information like 18 meeting dates is often only provided through proprietary systems, and uplines say they expect to 19 communicate with downlines through the voice messaging app. For example, in a March 2022 20 online training that covered each of the Core “Habits,” a WWG Diamond from Utah told IBOs 21 the WWG voice messaging app was the key way to communicate with their uplines: “This is like 22 your lifeline. I like to say it’s your umbilical cord to your upline or to your coach or to your 23 mentor to be giving you all the nutrients that you need in order to build a successful business.” 24 61. Leaders in WWG and LTD also promote “Core runs,” which are one to three 25 month periods in which IBOs are told to focus on being Core and read or listen to specific 26 training materials. The message that being Core is essential to financial success is emphasized COMPLAINT - 21 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 22 of 83 1 during these periods. For instance, in January 2023, WWG Diamonds Kelly and Darci Ewing 2 posted the following message on WWG’s private social media feed called “Dreamstream:” 3 “You’re on a core run or you’re on a poor run.” 4 62. The Core Habits and Core Steps relating to buying training are summarized in the 5 chart below, which is based on WWG training materials and materials used by an LTD Diamond 6 couple from Richmond, Virginia. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Training-Related WWG Core “Habits” Training-Related LTD Core “Steps” Training Purchases “Prioritize attending all” local and major WWG functions “Attend all Meetings” IBOs pay to attend most WWG or LTD meetings “Listen and clear” all messages “Communicate Daily on WWG’s voice messaging using the MessageApp” system each day IBOs pay for access to the WWG and LTD phone messaging apps Listen to one WWG audio a day “Listen to 1 Audio / Day” IBOs pay for access to phone apps with audio recordings Read 15 minutes a day from the WWG book list “Read 20 Minutes / Day” IBOs are supposed to purchase the books directly from WWG or LTD “Accountability,” including valuing the “time and knowledge” of your upline mentor “Be Accountable” Being accountable includes paying to attend meetings, which often are one weeknight per week, one weekend day per month, and one weekend per quarter “Mentorship”: “Develop … a relationship” with your “upline mentor” “Be Coachable” Getting mentoring or coaching often requires sending/receiving voice app messages Maintain a “Premier Membership” with WWG [LTD has an annual fee, but it is not a Core Step] WWG has a monthly membership fee 63. The financial costs of buying the training or related services required to be “Core” in WWG and LTD are substantial. Although costs have changed over time, the WWG Premier Membership has generally cost $59.95 a month (and later rose to $64.95), the WWG audio platform to listen to audios costs $30 a month, and the WWG voice messaging system costs $36.95 a month. Tickets to attend the three ticketed “major” WWG events each year cost about COMPLAINT - 22 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 23 of 83 1 $200 per person, and entry to local functions can cost $10 or more. Paying for WWG’s 2 membership, messaging app, and major event tickets alone for a single person costs over $2,100 3 a year, and other expenses, such as travel to major events, can increase costs significantly. 4 64. LTD operates on a subscription model, which bundles the training audios and 5 voice messaging app together. In recent years, the three main LTD subscriptions have cost 6 $89.95 a month for a Basic Subscription, $149.95 a month for a Premium Subscription, and 7 $249.95 a month for a VIP Subscription. LTD also charges a $49.95 per year membership fee, 8 and it charges IBOs to attend events. The tickets for LTD’s major events are around $140 per 9 person or more. An LTD IBO with a basic subscription spends over $1,600 a year on the 10 subscription, LTD major event tickets, and LTD’s membership fee; an LTD IBO with a Premium 11 subscription spends over $2,400 on those items over the course of a year, and an LTD IBO with 12 a VIP subscription spends over $3,600. 13 65. Since at least the early 1980s, Amway has expressed concerns to IBO leaders 14 about the amount of money IBOs spend on training through the Approved Providers, but Amway 15 put few limits on what Approved Providers could charge IBOs until recently. In early 2024, 16 Amway announced that it would no longer allow the Approved Providers to charge new IBOs 17 for training during their initial contract year with Amway. In connection with this change, which 18 was made during the investigation that led to this lawsuit and reduced the Approved Providers’ 19 training revenue, Amway compensated the Approved Providers. 20 66. In WWG and LTD, IBO leaders encourage their downlines to stay in Amway and 21 their Approved Provider for several years while continually purchasing training from those 22 groups after their first year. These IBO leaders often tell IBOs about a two-to-five year plan to 23 reach the level of Diamond in Amway’s multi-level marketing structure. 5. 24 25 26 67. Overview Of Amway’s System Of Bonuses And “Pins” Both Amway and the Approved Providers encourage IBOs to recruit new IBOs as a way to generate more points and receive bonuses. Starting in September 2021, Amway began COMPLAINT - 23 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 24 of 83 1 requiring new IBOs to sell—or at least report that they sold—$300 of Amway products before 2 being allowed to start recruiting IBOs. Prior to that time, new IBOs could begin recruiting by 3 simply signing up and paying Amway’s annual fee, which is currently $71. In January 2024, 4 Amway ceased charging its annual fee for IBOs in their first contract year. IBOs must still pay 5 the annual fee in their second contract year and for each year thereafter to remain in Amway. 68. 6 As noted above, in Amway, an IBO’s recruits and recruits of those recruits (and 7 so on) comprise the IBO’s downline, and IBOs who recruit others or precede other IBOs in a 8 given recruiting chain or line are referred to as “uplines.” IBOs who personally recruit others are 9 called their “sponsors,” and an IBO’s direct recruits are called “frontlines.” IBO leaders often 10 use the terms “sponsoring” or “helping” instead of recruiting. 69. 11 Amway’s system of bonuses, which Amway calls a “compensation plan,” is 12 complex and includes a number of potential bonuses that can be paid on a monthly or annual 13 basis. Many, but not all, of Amway’s bonuses share names with what Amway calls “pin” levels, 14 which are mostly named after precious metals or stones, and are markers of prestige and 15 leadership in Amway. IBOs keep their highest pin level as a title even if substantial numbers of 16 downlines leave Amway and the IBO no longer meets Amway’s qualification criteria for that 17 level. 18 70. Two important pins are Platinum and Founders Platinum. Amway calls Platinum 19 an “important milestone” that makes an IBO a “recognized leader,” and Amway’s rules require 20 IBOs at the Platinum level and above to train IBOs in their downline about the business and 21 Amway’s rules. To reach Platinum, an IBO must build a group of IBOs that generates about 22 $25,000 in Amway product purchases in six different months of the year, which is at least 23 $150,000. To reach Founders Platinum, which is a higher level, IBOs generally need to generate 24 that level of volume for 12 consecutive months, which is at least $300,000. In terms of 25 Amway’s point system, purchases of $25,000 generate about 7,500 points, which Amway calls 26 Point Value or PV. According to Amway, qualified Platinum IBOs and qualified Founders COMPLAINT - 24 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 2 Document 1 Filed 09/17/26 Page 25 of 83 Platinum IBOs receive about $20,000 or $41,000 a year in bonuses from Amway, respectively. 71. Another important pin is Diamond, and obtaining a Diamond pin is often viewed 3 as the ultimate sign of success in Amway. To reach Diamond, IBOs must have six different 4 Platinum groups, which are also called legs, that are part of their downline. Since a Diamond’s 5 downline includes six different Platinum groups (or legs), the combined purchases of those six 6 legs needs to be at least around $150,000 a month. 7 72. To generate these levels of product sales, Platinums and Diamonds effectively 8 must recruit large numbers of new IBOs who buy Amway products. Platinums typically have at 9 least dozens of downline IBOs, and Diamonds have hundreds or even thousands. In recent years, 10 the median number of downlines in a given month for IBOs who had ever been Diamond in 11 WWG was over 1,000, and it was often higher in LTD. 12 73. Reaching Platinum, Founders Platinum, or Diamond is extremely rare. Between 13 January 2020 and March 2024, there were more than 750,000 IBOs in the U.S. who bought or 14 sold an Amway product, and only 2.2 percent of them ever reached the level of Platinum or 15 higher. Of those more than 750,000 IBOs, only 1.3 percent of them had ever reached the level of 16 Founders Platinum, which is the level that is the focus of Amway-approved recruiting 17 presentations, or higher. Among these more than 750,000 IBOs, only one-tenth of 1 percent of 18 them had ever reached the level of Diamond or higher. 19 74. For the few IBOs who reach Diamond, it typically takes them many years to get 20 that pin, and they often subsequently fail to qualify for that level. In 2020 and 2021, ten LTD 21 IBOs and five WWG IBOs made Diamond for the first time. It took those IBOs an average of 19 22 years to make Diamond, and the median time to Diamond for that group was over 21 years. 23 After getting their Diamond pin, eight of the 15 IBOs no longer met the requirements for 24 Diamond by March 2024. 25 26 75. In terms of bonuses, few IBOs reach the $40,000 or $50,000 figures described in recruiting presentations for prospects. In each year from 2020 through 2023, about 1 percent of COMPLAINT - 25 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 26 of 83 1 IBOs had annual bonuses of $40,000 or more. In 2023, fewer than 1,600 IBOs out of 241,000 2 IBOs, or approximately 0.7% of IBOs, obtained annual bonuses of $40,000 or more. 3 76. The percentage and number of IBOs making $100,000 or more is even smaller. 4 In each year from 2020 to 2023, fewer than 500 Amway IBOs in the U.S.—out of between 5 241,000 and 360,000 IBOs in those years—received annual bonuses of $100,000 or more. In 6 2023, for example, fewer than 350 IBOs or about 0.1 percent of IBOs in Amway received 7 bonuses of $100,000 or more from Amway out of over 241,000 IBOs. Those IBOs, or a prior 8 generation of ownership from whom they inherited their IBO, joined Amway an average of 28 9 years prior to the end of that year, and the median was over 26 years. In 2023, there were 142 10 IBOs in WWG or LTD combined—about 0.2 percent of the IBOs in those groups—who 11 received over $100,000 in bonuses from Amway. 12 77. In contrast, median total bonuses received by IBOs have been less than $200 in 13 recent years. For example, in 2022, median total bonuses received by IBOs were $145, and in 14 2023 that figure was $139. Despite these figures, the IBO leaders of WWG and LTD pitch the 15 Amway opportunity to prospects as a path to make mid-five figures in bonuses, pay off debt, 16 replace the income from a full-time job, and even retire young. 17 B. AMWAY’S AND THE APPROVED PROVIDERS’ DECEPTIVE 18 REPRESENTATIONS 19 1. 20 78. The Deceptive Process For Recruiting New IBOs WWG, LTD, and other Approved Providers focus on recruiting young people 21 who are under 35 years old. As one WWG Diamond from Southern California put it several 22 years ago, “[t]he future of this business is 18 to 30 year olds.” In recent years, most of the IBOs 23 who joined WWG and LTD were under 35 years old, and many were in their 20s. 24 79. Part of WWG and LTD’s pitch to young prospects addresses the concern that they 25 will end up working in unfulfilling jobs for 40 years. The Amway business is often positioned as 26 a way to be free from financially and personally unfulfilling jobs, and this message continues COMPLAINT - 26 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 27 of 83 1 after recruits become IBOs. For example, in WWG’s private social media feed, “Dreamstream,” 2 at least six WWG Diamond accounts posted the same message to their downlines in October 3 2022 about building their Amway business for three years to avoid working a job as an employee 4 for 40 years. The version posted by a WWG Diamond couple who live in the Seattle area, is 5 below: 6 7 Diamondship Oct 29 2022 03:34 PM 8 BOOM 9 shared a photo 10 PEOPLE DON'T HAVE THE PATIENCE TO BUILD A BUSINESS FOR 3 YEARS. BUT THEY HAYE THE PATIENCE TO 60 TO WORK FOR 40 YEARS. 11 12 13 14 15 16 17 18 19 20 21 80. In reality, among IBOs who started in 2020 and were still buying products from 22 Amway in early 2024, median annual bonus payments in their third full year (2023) were about 23 $350 and the average was around $1,000. Similarly, among IBOs who started in 2018 and were 24 still buying products from Amway in early 2024, median annual bonus payments in their fifth 25 full year (2023), which IBO leaders often claim is the time it takes to reach Diamond, was about 26 $425 and the average was less than $1,500. COMPLAINT - 27 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 81. Document 1 Filed 09/17/26 Page 28 of 83 When recruiting, WWG and LTD IBOs are generally not taught by IBO leaders in 2 those groups to tell prospects that they work with a multi-level marketing company or a direct 3 selling company when introducing the business opportunity. Instead, they are taught to 4 emphasize who they are working with by saying they are being mentored, coached, or working 5 with a highly successful person, couple, or group of people. This initial pitch is deliberately 6 designed to allow the IBO to conceal what the opportunity is when asked, as it allows IBOs to 7 say the money-making strategy belongs to their mentor, and to position the opportunity as an 8 exclusive one. 9 82. According to Amway and IBO leaders, this approach was developed by a 10 Canadian WWG Diamond and then popularized in the U.S. in the mid-to-late 2010s by WWG 11 Diamonds Trevor and Alexis (“Lexi”) Baker, who live in the Las Vegas area. This recruiting 12 method also requires prospects to go through multiple steps before getting a purported “offer” to 13 join Amway. The steps typically include requiring prospects to attend multiple recruiting 14 meetings and having prospects read a book, watch videos, or listen to audios. These steps serve 15 to gauge whether the prospect follows instructions given by the IBO recruiter and uplines who 16 often assist during the recruiting process. 17 83. When recruiting others to join the Amway opportunity and WWG or LTD, IBOs 18 are also taught to pretend that there are limited spots in the opportunity and that only qualified 19 applicants can get an “offer” to join. For example, IBO leaders in WWG and LTD tell IBOs to 20 falsely pretend that there are limited seats at recruiting events, that their mentors are selective 21 about who they work with, and that the prospect needs the recruiter to get access to the mentor. 22 In addition, IBO leaders in WWG and LTD pretend that there is an evaluation process for 23 prospects, which is often characterized as determining whether the prospects have the right 24 “mindset” or are a “good fit.” In a large recruiting meeting in May 2022 in the Seattle area, for 25 example, a WWG Diamond told prospects “if you’re a guest in this room, if you earn a spot, if 26 you’re invited to be part of World Wide Group—[]it is by invitation”—then you will get a free COMPLAINT - 28 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 29 of 83 1 ticket to an upcoming conference. Similarly, at a February 2023 recruiting event, an LTD leader 2 from the Dallas area at the level of Emerald, which is above Platinum, told prospects: “We’re 3 still checking you out—trying to figure out if you’re going to be a good fit for us because we do 4 sow a lot of our time and energy and resources into the people that we work with, and we want to 5 make sure that we’ve got the right people.” However, in reality, anyone who follows the 6 instructions of their IBO recruiter (and has some money to spend on products or training) will get 7 an “offer” from a WWG or LTD IBO. 84. 8 This method of recruiting is called “The Process.” After Trevor and Lexi Baker 9 became Diamonds in 2015 by using it, The Process was widely adopted in WWG and then 10 spread to the other Approved Providers, including LTD. One of the ways The Process spread 11 throughout Amway was through audio recordings of Trevor Baker’s trainings, which were 12 passed around among IBOs. 85. 13 Although there is some variation in the initial pitch that IBOs make to prospects, 14 it usually centers around telling prospects that the IBO knows someone else who has been 15 successful and can teach the prospect how to make money. The setup for the pitch, as taught by 16 Trevor Baker, is to start a conversation with someone that leads to a discussion of what the IBO 17 and the prospect do for work. After IBOs talk about their job, they are taught to transition to 18 talking about their purported mentors. Some of the model language for this portion of the pitch 19 has included claiming that IBOs are being mentored by a couple who “retired” or “were able to 20 walk away from their jobs” in their 20s or 30s and that they had taken the IBO “under their 21 wing” and are teaching the IBO how to make money—representations that are typically false or 22 deceptive. An example of this language, which was posted in February 2023 to WWG 23 Diamonds Kelly and Darci Ewing’s Dreamstream with the exhortation “Memorize this” appears 24 below: 25 26 COMPLAINT - 29 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 Document 1 D Mail ■ 1 -:;:' ; 2 Filed 09/17/26 Page 30 of 83 10:13 PM ii dreamstream .m.facebook.com Kelly and Darci Ewing 3 'lestPrd;,y ~t 1C (16prn 4 Do you want to hear the craziest thing? 5 Recently I (or my spouse & I) connected with a couple that were able to walk away from their jobs at 28 & 33. That blew our minds so we pursued them & convinced them to spend some time with us. As a matter of fact they agreed to take us under their wing. And right now they are in the process of coaching & mentoring us to change the way we make money so we can accomplish 6 7 8 9 10 11 similar results in our life so we can stop sacrificing our life for a job. 12 Memorize 13 14 this 15 16 rfJ Like 0 Comment i;::> Share 17 18 86. Many LTD IBOs are taught to make a similar pitch to prospects, and Amway is 19 well aware of the details of how The Process works. For example, one early 2019 report to 20 Amway’s Vice President of Sales explained that “The ‘Process’” was a “sponsoring technique 21 that initially introduces neither Amway product nor the Amway Opportunity, but rather 22 introduces the concept of exclusive access to a knowledgeable and successful mentor available 23 only to a select few qualified prospects.” 24 87. In March 2020, Amway’s sales group received a recording in which LTD 25 Diamond Kevin Schwers interviewed several downlines at a training session about how they 26 introduce the opportunity. In the recording, three IBOs describe how they tell prospects they are COMPLAINT - 30 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 31 of 83 1 being mentored by someone who is “financially independent” including one downline who 2 described a recent pitch he did with a prospect as follows: 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 “[The prospect] says, ‘So what do you do?’ And I said, ‘Well, I work at Wells Fargo full time, but, honestly, what I’m more excited about is a while ago I got connected with a guy who’s an entrepreneur and was basically financially independent in his early 30s.’ And he [the prospect] just kind of looked at me and is like, ‘That’s cool.’ I said, ‘Yeah, so I pursued him. I convinced him to spend some time with me and mentor me and teach me how to do what he’s doing because I want to know how to create cash flow so I can retire young and spend time with my wife and kids and not sacrifice the rest of my life for a job and a paycheck.’ And he [the prospect] just looked at me and is like, ‘That sounds really cool.’” 88. In the recording, Schwers, who became a Diamond in 2021 and is from the Des Moines, Iowa area, concluded the training interview by saying that he does the “exact same thing” when he talks to prospects. 89. WWG and LTD leaders teach IBOs to make these types of deceptive claims nearly everywhere they go. For instance, IBO leaders advise IBOs to ensure they are free in their evenings to visit a circuit of big box or grocery stores in their area and do laps around those stores meeting people. IBOs are also taught to reach out to nearly everyone they know and find a way to say that they are working closely with a successful person or couple even though that is often not their actual experience. 90. WWG and LTD go to great lengths to make it seem that there are many IBO leaders who are financially successful. IBO leaders in those groups teach IBOs to “edify” any upline that a prospect may hear speak at an event or be introduced to during The Process. Within Amway, “edification” typically means claiming an upline or speaker is wealthy, has an amazing life, and is a good person. Often, this ends up being an upline with the rank of Platinum or Founders Platinum, who Amway says receive an average of about $20,000 or $41,000 a year, respectively, in bonuses from Amway. 91. WWG and LTD leaders also teach IBOs to “edify” their uplines even though IBOs rarely learn how much higher pin IBOs actually make in Amway bonuses and therefore COMPLAINT - 31 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 32 of 83 1 know little about whether their uplines are financially successful because of the opportunity. 2 Moreover, since IBOs retain the title of their highest pin even if they no longer meet the 3 qualifications for that pin, IBOs frequently do not know if an upline they are edifying is even 4 currently qualified at their purported pin level. As a result, prospects are often told to trust the 5 business building prowess of higher pin IBOs edified by IBO recruiters who know little about 6 the finances of those uplines. 7 92. In numerous instances, the “story” that is part of The Process about meeting a 8 successful couple who is mentoring or coaching the IBO is false or deceptive. Prospects often 9 end up getting directly “mentored” by another IBO who is just trying to make it in Amway and 10 who still has a traditional job. Moreover, IBOs who are mentored by a Platinum or Founder’s 11 Platinum receiving an average of about $20,000 or $41,000 annually are not being mentored by a 12 highly successful businessperson, let alone someone who hit it big at a young age or someone 13 who no longer needs to work. Virtually all of the higher-pin IBOs still need to work their 14 Amway business to sustain it. IBOs at the Platinum level and above typically have a full 15 schedule of recruiting events, team meetings, and voice messaging app messages to attend to. In 16 the many cases in which the Platinum or Founder’s Platinum are married couples, it takes the 17 efforts of two people to generate annual revenues of about $20,000 or $41,000. To the extent 18 IBOs purport to be referring to their upline Diamond as the successful couple who is mentoring 19 them, this is only true in a few circumstances, as most Diamonds have at least several hundred 20 downlines, meaning that at most they could only take a few IBOs “under their wing” as the 21 Dreamstream post in paragraph 85 put it. 2. 22 Substantial Income And That Recruiting New IBOs Is Easy 23 24 The Deceptive Claims That Being “Core” Will Practically Guarantee 93. In recruiting new IBOs and encouraging existing IBOs to stay in Amway, IBO 25 leaders frequently tout Amway as a way to have both “time and money” or “financial freedom.” 26 According to these leaders, Amway is superior to a traditional job or gig work in which you trade COMPLAINT - 32 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 33 of 83 1 your “time for money” because in Amway your downlines can duplicate your efforts, thereby 2 allowing you to make more money without more work. IBO leaders also promote the Amway 3 opportunity as superior to other money-making opportunities, such as starting a small business, 4 which they characterize as time-consuming, risky, full of “headaches,” and likely to fail. For 5 example, the training materials used by the LTD Diamond couple from Richmond, Virginia 6 teach IBOs to tell recruits that the Amway business provides “$, time, & security” in contrast to 7 starting your own business because “[o]nly 50% … are still in business after the 1st 5 years.” 8 94. In promoting the Amway opportunity and the Approved Providers, IBO leaders in 9 WWG and LTD frequently make claims about their purported success that bear no relation to 10 what the vast majority of IBOs experience. These claims, which Amway employees admit are 11 not typical or not realistic, often center around how the Amway business has allowed them to 12 quit their jobs, be debt free, and spend more time with their spouse or children. For example, in 13 February 2023, an LTD Emerald from the Dallas area, told prospects and IBOs at a recruiting 14 meeting: “This opportunity can definitely provide a lot. … It provided us the ability to stay home 15 with our children. It’s provided us financial freedom. We live debt-free, stress-free. We’ve got 16 plenty of money in savings.” Similarly, a WWG Diamond from Northern California told 17 prospects and IBOs about how she was able to quit her job and be home with her children after 18 three years in Amway during a June 2022 meeting: “In [] less than three years, they [our 19 mentors] helped us get on this thing called a budget, pay off our debt. We had money in this 20 account called ‘savings.’ These are all new concepts to us, obviously. And then, I was six 21 months pregnant with our first child when we started making as much money part-time, on the 22 side through this industry as I was making in my 40-hour a week job. … I got to be home. I got 23 to watch all their milestones.” In 2023, there were more than 241,000 IBOs in Amway, and 24 these two IBOs were in the top 200 IBOs in terms of bonuses received from Amway. 25 26 95. In addition, IBO leaders tell IBOs about the trappings of wealth in their lives. For example, IBO leaders have told IBOs how they have 13 Christmas trees that take a crew a week COMPLAINT - 33 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 34 of 83 1 to set up, how another Diamond spends $250,000 a year on food, or how they know a Diamond 2 who has a sports memorabilia collection “worth more than most people’s houses.” 3 96. IBO leaders claim that following the guidance of an upline mentor and the 4 “system” developed by IBO leaders is essential to success in Amway. As noted above, in WWG 5 and LTD, this “system” is called being Core. 6 97. In WWG and LTD, IBO leaders claim that being Core is essential for success and 7 that those who do not succeed failed to be Core. IBO leaders regularly say that success is 8 practically inevitable if an IBO is Core or plugs into the Approved Provider’s system: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 • “Now, can I guarantee you any results from this business based on the disclaimers we’re required to give? No. But I haven’t met the person yet, and I am looking forward to meeting this person because it will give me a chance to go, ‘Oh, I guess there’s one anomaly.’ But so far there hasn’t been. No one has done the nine Core action steps to the discretion of their upline and not gone Platinum. Zero. No one has done it for two years and not gone Platinum. You are 24 months away from the biggest upgrade of your life.” (LTD leader above Platinum in a Dallas area training session in December 2023) • After describing an “epic lunch” of poke and ribs while in Hawaii, WWG Diamond Kelly Ewing told his downline: “[The lunch is] not inexpensive and the price you pay is Core. The price you pay is Core. If you’re Core, you can pay for whatever you want all over the world. And that’s the key is pay the full price so you get the full reward. And people try to shortchange the price, they shortchange the prize. And that’s not where you want to be guys. Push through.” (WWG Diamond Kelly Ewing in a video posted online for his downline in February 2023) • “[I]f you are core, you’ll get the results that you’re looking for from this opportunity.” (WWG Diamond Trevor Baker at WWG’s “Spring Leadership” event in 2021) • “… I believe if you’re plugged into World Wide, it’s not if, it’s when you will eventually grow, right. … It’s an amazing system.” (WWG Diamond from California during a March 2023 training session) • “I’m convinced if you didn’t grow the way you wanted to grow last year, it’s only because you’re doing a bunch of other things that’s not benefitting your Diamondship. … We didn’t build this business because we love it. We built it because it worked. We built this because it was the greatest vehicle I saw so we could do the things we wanted to do. … [I]f you don’t quit, you will get through it. I will promise you that. As long as you have a work habit, as long as you’re counseling, and as long as you’re willing to be Core. Core is not difficult. It’s COMPLAINT - 34 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Document 1 Filed 09/17/26 Page 35 of 83 very childish. It’s ten little silly things, but you got to do them to make this work.” (WWG Crown Brad Duncan during a December 2022 online meeting) 98. In both WWG and LTD, one of the elements of being Core is spending substantial time recruiting other IBOs. In WWG, IBOs are supposed to “Show the Plan,” meaning present the Amway opportunity and “compensation plan,” to “two people a week or 10 people a month.” In LTD, IBOs are supposed to conduct three to five interviews with prospects each week. 99. In standard recruiting presentations in WWG and LTD, IBO leaders claim that recruiting is not difficult and that it is one of the keys to making money in Amway. For example, in a January 2023 training in the Seattle area, Brad Duncan talked about the ease with which IBOs can recruit six new people, which gives them what WWG calls an Eagleship, by showing prospects the Amway compensation plan: “I think if you’re really showing the plan, I think it will surprise you that it’s not very hard, that within three to four months that you should be able to build an—a new Eagleship every three to four months. Let’s just say it takes six months. … Every three months to five months, your income should grow at least a thousand bucks a month.” 100. In these presentations, which are emulated by IBO recruiters in WWG and LTD, prospects are told to recruit 6 to 12 direct recruits or frontlines and help those IBOs recruit as well. According to these presentations, the goal is to build a team of 25 to 48 IBOs who follow your purchasing patterns and thereby help you become Founders Platinum and receive $40,000 or more in bonuses a year from Amway. 101. WWG leaders tell recruits that building a downline of this size is a routine, almost inevitable process for IBOs who follow WWG’s methods. As WWG Diamond Maiko Tuitupou put it in a March 2023 online recruiting event while discussing an IBO’s initial six recruits, “So, but essentially, check this out, essentially, this is going to morph into 50 different entrepreneurs and 50 different, well, independent business owners, 50 different IBOs doing 150 points,” which provides the IBO with bonuses of “just shy of $56,000 a year.” 102. WWG leaders often tell recruits that they can go on to make much more than the COMPLAINT - 35 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 36 of 83 1 mid-five figure bonuses that are shown in presentation slides or drawn on a white board. In a 2 June 2023 recruiting meeting in Fond du Lac, Wisconsin, for example, a WWG Emerald from 3 Texas claimed to now be debt-free, despite formerly having $1.2 million in debt from student 4 loans and buying an endodontics practice, because of the money he made from Amway: 5 “Tonight, just to be clear, we’re going to talk about a $55,000 part time, extra income on top of 6 what you’re doing. … That would not have gotten me free so just know there’s more income in 7 it.” 8 103. LTD leaders also tell recruits that recruiting others is not that difficult and that 9 there is more money to be made than just the $40,000 or $50,000 annually that appears in the 10 slides at recruiting events. In a February 2023 LTD recruiting event in the Dallas area, an 11 Emerald IBO leader introduced a handful of IBOs above Platinum and said: “They’ve all helped 12 and a few others have all helped people go Platinum as well. So it’s not really that challenging. 13 … You don’t need a degree. You don’t need to go to college. You don’t need to go to trade 14 school. … We teach people how to do it. Okay? And so, if you’re able to teach three people to 15 go Platinum, your income at a minimum … is going to be between 150 and $300,000 per year.” 16 104. At another Dallas area recruiting meeting in September 2023, the same Emerald 17 from the Dallas area referenced the $50,000-plus figure presented to prospects and said, “We 18 make way more than that. That’s not supposed to impress you. It’s just supposed to show that 19 this thing does work for those who work it.” At that same meeting, an LTD leader above 20 Platinum, said, “We started our business in October 2006. Sixteen months later, following our 21 mentors’ and coaches’ advice, following the program that’s in place, we hit the 7,500 point level. 22 We made a little bit more than what you see on the screen, and we’ve made more money every 23 year since we’ve been in business. [My wife] was working full-time as a special education 24 teacher. … In 2011, we were making about triple her teaching income. Can’t quote that, because 25 for some reason the lawyers think that’s all that we’re allowed to show you, even though you can 26 do math.” COMPLAINT - 36 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 105. Document 1 Filed 09/17/26 Page 37 of 83 Claims that the business “works” for those who follow the system and that there is 2 significant income potential that lawyers try to hide from prospects have long been a part of 3 Amway. In a large meeting for prospects and IBOs in July 2019, for example, Brad Duncan told 4 the audience in the Seattle area that if you “listen” to him you will be successful: “I have people, 5 my attorneys say, ‘You can’t tell people [] they have to do this or they have to do that, or you 6 know, that if you’ll listen, I’ll show you how to be successful. You just can’t say that.’ I go, 7 ‘OK.’ And I still do it. Because it’s true. There’s going to be thousands of people next year that 8 will retire. There’s thousands of people that are going to create financial success. There are 9 thousands of people, their income is going to go up an extra two grand a month. … Hey, I was 10 just in Las Vegas, there was almost five thousand multi-millionaires there. Five thousand in this 11 business. How many millionaires are there where you work?” 12 106. From 2020 through 2023, fewer than 500 IBOs in all of Amway received more 13 than $100,000 in bonuses in each of those years from Amway. In those same years, fewer than 14 150 of those IBOs were in WWG. 15 3. Just A Few Hundred Dollars 16 17 Median Annual Bonuses For IBOs Before Expenses Are 107. In reality, most IBOs come nowhere near the types of success that IBO leaders 18 promise is nearly inevitable if they follow their system. In fact, IBOs spend more on Amway 19 products on average than they get back from Amway. From September 2017 to March 2024, the 20 average amount spent on Amway’s products by all U.S. IBOs who had a financial transaction 21 with Amway exceeded the average amount they received from Amway in the form of bonuses 22 plus retail margin from online sales. The same is true for the median amount IBOs spent on 23 products in the same period, which was greater than the median amount received by IBOs in 24 bonuses and retail margin from online sales. 25 26 108. For IBOs who started in 2020 through 2023 and had a financial transaction with Amway, the total bonuses and retail margin from online sales through March 2024 for each COMPLAINT - 37 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 38 of 83 1 cohort (by start year) was just several hundred dollars. The median amounts were less than 2 $100, and both the average and median amounts received from Amway in bonuses and retail 3 margin from online sales were less than the average or median amounts they spent on Amway 4 products. Most of these IBOs left Amway before March 2024. 5 109. In WWG, IBOs who started in 2020 through 2023 and had a financial transaction 6 with Amway had total bonuses and retail margin from online sales through March 2024 between 7 about $175 (for those who started in 2023) and about $630 (for those who started in 2020). The 8 median figures for these groups were less than $100. These averages and medians were less than 9 the average and median amounts those IBOs spent on Amway products and less than the average 10 and median amounts those IBOs spent on training from WWG. Most of these IBOs left WWG 11 and Amway before March 2024, and IBOs in WWG who could not be matched to Amway’s data 12 were excluded from these calculations. 13 110. In LTD, IBOs who started in 2020 through 2023 and had a financial transaction 14 with Amway had total bonuses and retail margin from online sales through March 2024 between 15 about $175 (for those who started in 2023) and $535 (for those who started in 2020). The 16 median figures for these groups were less than $100. These averages and medians were less than 17 the average and median amounts those IBOs spent on Amway products and less than the average 18 and median amounts those IBOs spent on training from LTD. Most of these IBOs left LTD and 19 Amway before March 2024, and IBOs in LTD who could not be matched to Amway’s data were 20 excluded from these calculations. 21 111. As noted above, very few IBOs make the promised annual bonuses of over 22 $40,000 (or $50,000) described by IBO leaders and authorized by Amway. In 2020, 2021, 2022, 23 and 2023, only about 1 percent of IBOs received bonuses of $40,000 or more. 24 112. IBOs who made $40,000 or more in Amway bonuses in 2023 joined Amway an 25 average of over 21 years before December 2023. The median number of years prior to 26 December 2023 that those IBOs joined Amway was over 17 years. COMPLAINT - 38 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 113. 1 Document 1 Filed 09/17/26 Page 39 of 83 Amway is well aware that the earnings claims it allows the Approved Providers 2 and IBOs to make bear little relationship to the gross revenues, let alone net income or losses, 3 experienced by most IBOs. In mid-2019, an analysis shared among Amway’s senior leadership 4 showed that the average annual gross payments for certain new IBOs in each of the five largest 5 Approved Providers was between $132 and $230 in the previous two years. In the years that 6 followed, Amway introduced some bonus changes to try to increase these figures, but average 7 annual bonuses for new IBOs did not increase significantly. Despite this reality, Amway 8 encouraged the Approved Providers to promote the Amway business opportunity using 9 significantly higher figures, which Amway told IBO leaders could not exceed the average 10 received by those who were Founders Platinum. In 2022, for example, Amway guidance and 11 presentations to IBO leaders encouraged them to claim new IBOs could make about $3,100 12 annually, which would actually put a new IBO in the top 10 percent of bonus earners. In 13 addition, Amway encouraged IBO leaders to present bonuses for IBOs building their business in 14 the $20,000 to $43,000 range, and bonuses for leaders at more than $53,000 annually. Amway’s 15 executives were aware that these bonuses were only obtained by a very small percentage of U.S. 16 IBOs. 17 114. For WWG and LTD IBOs in 2022 and 2023, median total bonuses in each of 18 those years was between $105 and a little over $200. The median total bonuses plus margin paid 19 to IBOs in those groups for online sales in each of those years was about $250 or less. 20 21 115. The chart below depicts the average and median total bonus payments in 2023 for the more than 241,000 IBOs who bought or sold an Amway product in that year by decile: 22 23 24 25 26 IBO Group (2023) Top 91-100% (>90% to 80% to 70% to 60% to 50% to 40% to 30% to 20% to 10% to =99%) Top 2-5% (>=95% to =90% to IMoathlyPV, 700 Performa nce Bon~% 1sp,1,d on BV' 300 600 7,000 1, 500 2,500 4,000 6,000 7,500 •.,,wwz.atw GJ,RN ■►;?,QUI w;;.aww ■t•W¥14 W4Q.hii4 Wff,Ml ■ W;t.@tW ~i.m bt ,11 From brushing my teeth to washing my face to putting on my makeup to drinking my morning concoction to taking my vitam ins; every single product I used or ingested was from ou r amazing business! Of course I dra nk E-spring wate r and breathed in t herea ir @ Thank yo u or y our inspiring live @ Pro tip: dissolve collagen peptides in room temp water to avoid clumping and then add all other ing redi ents and add cold beverage of choice @ a shared a ph oto 2h ·l:il This is just a collage of the photos you guys have posted so far for taking your vitamins. If we can have team leaders do their own collage for you- teams, it would be cool to see the posts shared a ph oto 9 10 11 12 13 14 15 16 17 18 175. IBO leaders tell IBOs they should not worry about whether they like the products 19 because buying them will earn points and thereby help them make money in their Amway 20 business. For example, in a December 2023 training session in the Dallas area, an LTD leader 21 above Platinum, told IBOs to buy Amway products for their point value or PV: “You need to 22 stop compromising with your personal volume. … You eat a [energy] bar because you’re 23 committed. I don’t care if it tastes good. There’s a common ingredient in every bar. It’s P 24 frickin’ V.” Similarly, in June 2022, a WWG Diamond from Northern California, told a training 25 session in Washington that when she started in Amway, the energy bars came in two flavors, 26 “yuck and yuckier,” but she ate them anyway because it “created volume.” COMPLAINT - 60 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 176. Document 1 Filed 09/17/26 Page 61 of 83 Likewise, in a January 2025 recruiting meeting in the Kansas City area, an LTD 2 Diamond, who used to be on the board of the IBOAI, taught prospects and IBOs that buying 3 Amway products for themselves is how to drive revenue for their Amway business: “Do you 4 know why this [Perfect water] is the brand of water that’s in my home? … Because when I buy 5 this, it’s revenue into my family’s business.” 6 177. IBO leaders also tell IBOs not to worry about the high prices of Amway products. 7 In an online recruiting session in March 2022, WWG Diamond Maiko Tuitupou told IBOs and 8 recruits that the price of Amway’s products did not matter: “Somebody asked me this, you know, 9 ‘How much are the products? How are they?’ They’re phenomenal, but I’m going to be honest 10 with you, I’ve never looked at the price because, for me, I’ve never cared, you know. Because 11 the way I looked at it was, if I buy these [Amway] products, I can build the life that I want. If I 12 buy those [non-Amway] products, I can’t. That’s just how I looked at it.” 13 178. These are longstanding claims within Amway. Another LTD leader, Diamond 14 Doug Weir, told IBOs in a training session in Virginia in 2017 that he buys products for himself 15 to support his business, which he claimed generated $20,000 a month: “XS energy right now is 16 currently the only energy drink that has PV on it, so that’s why I buy it. … I don’t care about the 17 products. … Don’t talk about how XS is better than Red Bull because we don’t know if it is or 18 not. Right? [] I don’t know if the products are any good. I don’t care. [] I’m getting that 19 $20,000 a month check. The products don’t have to be good for me to get that $20,000 a month 20 check.” Likewise, WWG Diamond Trevor Baker has told recruits and IBOs that he and his wife 21 made a “business decision”—as opposed to a “consumer decision”—to buy 300 PV of Amway 22 products each month when they started out. 23 179. New IBOs are told that buying Amway products is an important part of running a 24 successful Amway business, and they are pressured to actually purchase Amway products 25 immediately after they sign up as IBOs. In both WWG and LTD, IBOs are instructed to get their 26 new IBOs to start buying Amway products as part of their onboarding process. Both groups also COMPLAINT - 61 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 62 of 83 1 encourage new IBOs to set up a recurring order of Amway products for the first day of each 2 month, a Day 1 DITTO. 3 180. For example, in a May 2023 voice message, WWG Diamond Howard (Howie) 4 Danzik explained to one of his downlines that “just so we’re clear, you should be teaching” new 5 IBOs to purchase a 300 PV “Day 1 DITTO,” although “it may take people two or three months 6 to work up to that. But I’m assuming you’re sitting down and helping people put a DITTO 7 together, explaining why, helping people switch their household over [to Amway products], 8 following up with them and all that.” Danzik, who is on the Board of the IBOAI, also said that 9 IBOs who purchase 100 PV a month are not buying enough: “[J]ust a hundred PV means they’re 10 not even close to using their own product. So, [I am] assuming you’re teaching edibles [sold by 11 Amway] and all that.” 12 181. In the late 2010s and 2020, WWG leaders and training materials explicitly 13 instructed IBOs to purchase products for themselves that had a total point value of 300 PV each 14 month. This level of personal consumption was deemed the “standard of excellence” in WWG, 15 and 150 PV a month was described in training materials as the “basic volume.” LTD leaders 16 used the same 300 PV standard and called it “Core 300.” At times, in both WWG and LTD, the 17 150 PV monthly standard was also characterized as appropriate for single people, and 300 PV 18 was deemed the standard for couples. It now costs about $500 to purchase 150 PV and about 19 $1,000 to purchase 300 PV of Amway products. 20 182. In recent years, as reflected in communications between Amway and the leaders 21 of its Approved Providers, Amway executives told the IBO leaders that they were concerned the 22 FTC might bring an action against Amway and the Approved Providers. In response, the 23 Approved Providers reduced the numerical personal use standards that appeared in many written 24 training materials. For example, LTD’s written materials still use the Core 300 standard but 25 indicate that 60 percent or more of an IBO’s “blueprint” should be sold to non-IBO customers. 26 This translates into personal use for IBOs of about 120 PV, which costs about $400, and some COMPLAINT - 62 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 2 Document 1 Filed 09/17/26 Page 63 of 83 LTD leaders began using this figure in meetings with prospects and IBOs. 183. Since around 2021, some of WWG’s written training materials started presenting 3 a monthly personal use standard of 50 PV per month, but behind closed doors WWG leaders 4 pushed IBOs to buy more. For example, in a large training session in March 2023 in the Seattle 5 area, a WWG Diamond from Arizona told IBOs to consume more than 50 PV by placing a 6 DITTO order on the first day of the month: “So going back and talking about volume. You guys, 7 I just think this is, like, we just do it, right? And I think there has to be a standard. You know, 8 doing 50 PV a month in personal use is not a standard, you know. So talk to your upline coach, 9 figure out what that is for you, and then do it every month and you do it on a Day 1 DITTO.” 10 184. Pressure from uplines to purchase Amway products is substantial and effectively 11 requires downlines to purchase Amway products to be part of their group. Uplines and upline 12 coaches in Amway, whose bonuses depend on purchases by downlines, have significant power 13 over their downlines. Part of this power comes from the important role uplines often play in 14 helping their downlines recruit. Uplines can withhold this assistance, such as not conducting 15 meetings with prospects, if they are unhappy with the volume generated by a downline, which 16 they can see within Amway’s electronic system for IBOs. Similarly, uplines can withhold the 17 mentoring that is pitched to prospects as a key reason to join Amway or ostracize IBOs from 18 their group if they do not meet product purchase standards. 19 185. In addition, WWG and LTD try to create an environment in which upline coaches 20 are portrayed and “edified” as experienced, successful IBOs whose advice should be followed. 21 In WWG, for instance, this culture is formalized in part by the first of its five “Cardinal Rules,” 22 which instructs IBOs to “Never do anything for the first time without seeking perspective from 23 your mentor.” This directive does not just apply to product purchasing or how IBOs should run 24 their business. As a result, it is not uncommon for WWG leaders and coaches to give IBOs 25 financial advice or to discourage them from doing anything that will distract them from their 26 Amway business. A January 2023 Dreamstream post from Kelly and Darci Ewing, for example, COMPLAINT - 63 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 64 of 83 1 called “moving” and “changing jobs” two of the “biggest distractions,” along with “pets” and 2 “trips.” 3 186. The predictable result of the incentives created by the Amway compensation plan, 4 the difficulty of selling Amway’s low-margin products, and the self-consumption teachings of 5 the Approved Providers and their IBO leaders is that Amway IBOs buy most of Amway’s 6 products. From 2020 through March 2024, more than three-quarters of Amway’s product sales 7 were made directly to IBOs. In 2023, for instance, Amway’s data indicates 77 percent of 8 Amway’s U.S. product sales were made to IBOs. 4. 9 Self-Consumption Business Model 10 11 Amway’s Awareness Of Its Approved Providers’ Promotion Of The 187. Amway has long been aware that IBOs buy Amway products to generate points 12 for themselves (and their uplines) in the hopes that they can recruit a large number of downlines 13 to do the same for them. Most IBOs would not otherwise purchase Amway products, which are 14 pushed by IBO leaders as a way to create a duplicatable blueprint for recruits, rather than as a 15 means to having inventory on hand to sell to customers. 16 188. In the mid-to-late 2010s, IBO leaders openly discouraged IBOs from selling 17 Amway products to customers. As a WWG Diamond explained in a 2017 recruiting event in the 18 Chicago area, he sold as few products to customers as possible: 19 20 21 22 23 24 “We’re not looking for salespeople. I am not and never was and never want to be a good salesman. Do I sell stuff? As little as possible. The Federal Trade Commission puts a retail requirement on me, which is really, really small. It’s chump change. It’s insignificant. It represents such a tiny portion of my income that I don’t know what I would do with it. … So there is some retail involved here, but we’re not looking for salespeople. Nobody’s gonna to try to get you out and sell stuff for ‘em because this is a business of duplication.” 189. Similarly, in a recruiting meeting in the mid-2010s, a WWG Diamond from 25 Southern California bragged that he only had eight customers over 25 years in the business and 26 that four of them had never even ordered: “The legal environment in America requires that each COMPLAINT - 64 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 65 of 83 1 business owner conduct retail sales. So, the good news is you don’t have to do hardly any in 2 order to be considered a legitimate business.” The Diamond then said his “goal was never to 3 build client volume. . . . The real opportunity here is to not to build a retail base. . . . The real 4 opportunity here is for us to coach and mentor you on how to build a team.” 5 190. 6 “There are no products in our meetings anymore. So, I stopped bringing any products up. This isn’t Tupperware. Put the products away. No more demos. It’s not Urban Dishes. Again I’m not telling you, you guys decide—they’re your leaders. But we stopped hauling around products because I don’t care about the products. This is a plan for going Diamond. Do you guys want to be product experts, and peddle products for pennies? [] Or do you want to go Diamond and sit on the beaches of the world with us? You gotta decide which business model you want. Do you want to be a busy network marketer? Or do you want to be a guy who gets a big check every month and doesn’t have to do anything? ‘Cause it’s two different [] businesses.” 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 191. LTD Diamond Doug Weir expressed similar sentiments in a training in 2017: Amway was aware of this approach by the Approved Providers and the fact that leaders like LTD’s Doug Weir viewed customer sales as “peddl[ing] products for pennies.” Amway also knew that its own compensation plan, which creates the financial incentives for IBOs, did not reward IBOs for customer sales and led IBO leaders to disparage selling Amway products. As noted above, in a February 2019 slide deck prepared by one of Amway’s highestranking executives, the new IBO experience globally is described as one in which “Selling to customers is not rewarded, not taught by leaders and difficult.” 192. In addition, Amway acknowledged that its Approved Providers instructed IBOs to buy a significant amount of Amway products themselves in order to succeed in the business. In July 2019, for example, Amway’s internal profiles for numerous WWG leaders noted the following “Insight: Lack of teaching on customer volume has resulted in an increasing disparity between self-use and customer sales. . . .” 193. Amway’s internal analyses of customer sales in LTD and other Approved Providers were similar. Those analyses found that IBO leaders instructed IBOs to use the personal consumption model and that the vast majority of Amway’s sales were to IBOs and not COMPLAINT - 65 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 66 of 83 1 to customers. For example, the notes of the high-ranking executive quoted above for a 2 September 2020 presentation indicated the business has a “heavy reliance on self-consuming 3 distributors,” meaning IBOs. 4 194. Internal Amway documents put customer sales for the late 2010s and 2020 at or 5 below one quarter of overall sales. For example, one internal report on customer sales for 6 November and December 2019 put customer sales at 24 and 25 percent, respectively. Similarly, 7 in a draft Amway presentation slide from 2022 concerning “Actual” sales for all of Amway 8 North America (“ANA”) in the years from 2015 to 2019 put customer sales at less than one- 9 quarter of overall sales in the pie chart below: 10 11 12 ANAs Path to Growth Pre-Transformation - ACTUAL·· - - - 13 14 ~ Shape of the business Business Building 15 □DD~ 16 Self Consumption tS-7% Growth 17 18 ■ Customers ■ IBOs 19 □ Profitability t 25% 20 21 22 23 24 25 195. Other internal documents put customer volume at less than 10 percent of sales by disregarding self-reported customer sales, including the bar graphs below in an Amway profile of WWG from late 2018, in which WWG is referred to by its old initials, WWDB, and customer sales are referred to as QCPV or Qualified Customer PV: 26 COMPLAINT - 66 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 2019 JI 01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Page 67 of 83 IMPACT SPOTLIGHT WWDB Approved Provider WHAT YOU NEED TO KNOW ABOUT WWDB • \NW lost their founder and mentor when Ron Puryear died in 2017. Since Ron's passing the Management Team (one representation from all the qualified Diamond-ships) has come together even closer to continue mentoring IBO's who want to build a profitable business. Many of their business buildi~ been used as a benchmarl< for A A. The leadership torch has been passed on to Brad and Julie Duncan and 2ml in line,_ _ . Their business managercontinues to be a great partner lo Amway and is doing a great job at keeping th is organization unified. WHY WE'RE WORKING WITH WWDB This AP continues to grow at a double digit rate each year. To maximize our efforts, ii makes sense to focus the majority of our efforts in actions that will move the entire organization instead of only by diamond team. Learning from their methods of teaching from a business building and onboarding pers~ive could result in other AP·s implementing similar teaching for sustainable growth . As the lop growing AP, with a high% of U35 IBO's, the opportunities for growth, more loyal buyers and new Platinum and above leaders are greal KEY INSIGHT WW tools speak about customer volume, not as a benefit but as a minimum. This lack balance in message surrounding both self use and customer vo lume is causing an unbalanced and unsustainable business structure. SUPPORTING DATA ■ Revenue • Customer Vo/1a11e 2~0.000,000 200.000.000 150,000,000 100,000,000 50.000.000 0 20 16 201•3- -- -- HERE'S WHY: Productivity continues lo Increase disproportionately to QCPV. This gap could be the result of messaging around the cons istent promotion of self consumption. If this behavior, and unbalanced business building practices do not changed, the gap will continue to increase resulting in IBO's having to work harder to requallfy, negative exposure to Amway, WW & Diamond bus inesses. QCPV Alnalysis 18 19 196. In addition, Amway was aware that when IBOs were able to “sell” Amway 20 products, they often did so without any profit margin. As notes from a September 2020 Amway 21 meeting put it, only “30% of IBOs were selling at some margin.” 22 197. In the 2010s up through 2020, Amway had two rules that purported to promote 23 the sale of products to third-party customers. However, Amway understood that these rules were 24 not effective, as described above. 25 26 198. One rule required IBOs below Platinum to either have 10 customers each month or report that they sold 50 PV in products to customers. IBO leaders ignored the 10-customer COMPLAINT - 67 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 68 of 83 1 requirement, and very few IBOs had 10 customers. In 2021, for example, no more than 3,100 2 IBOs had 10 customers each month out of the more than 350,000 IBOs in Amway that year. 3 Instead, IBO leaders encouraged IBOs to submit reports to Amway that they sold 50 PV each 4 month to customers, regardless of whether they actually made customer sales, and Amway 5 accepted those reports in lieu of proof that IBOs had 10 customers. Amway employees were 6 aware that IBOs often faked these customer or retail sales reports. As Amway’s current Vice 7 President of Sales put it in a 2019 email, “I have seen awful abuses of self-reported retail sales in 8 the past.” 9 199. The second rule nominally required IBOs to sell 70 percent of their blueprint “at a 10 commercially reasonable price.” However, the rule also allowed a “reasonable amount” of 11 product purchased by IBOs for personal or family consumption to count toward the 70 percent. 12 As a result, the rule itself paradoxically allowed products bought by IBOs for themselves to 13 count as customer sales. 5. 14 The Personal Consumption Model 15 16 Amway And The Approved Providers’ Recent Efforts To Hide 200. In the late 2010s, Amway became increasingly concerned that the FTC might 17 investigate its business model. Within Amway, part of this concern was driven by the FTC’s 18 investigation into another large multi-level marketing company, AdvoCare International, L.P., 19 which Amway executives knew about prior to the publicly-announced settlement in October 20 2019. The FTC’s complaint against AdvoCare asserted that AdvoCare participants were 21 incentivized and encouraged to purchase the company’s products “regardless of retail demand” 22 and to “‘duplicate’ themselves by recruiting business opportunity participants” to also purchase 23 the company’s products. 24 201. The centerpiece of Amway’s response to the AdvoCare case was to expand the 25 self-reporting system in which many IBOs were already falsely claiming to have sold 50 PV of 26 Amway products to customers each month. Specifically, Amway started requiring IBOs to COMPLAINT - 68 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 69 of 83 1 report that they sold at least 60 percent of their monthly blueprint to customers under a revised 2 version of Amway’s so-called 70 percent rule. At the highest levels of Amway and its Approved 3 Providers, however, the company set the nominal bar even higher. Amway executives told IBO 4 leaders that the company wanted them to get IBOs to report that they sold 80 percent of their 5 monthly blueprint to customers in order “to create the data we will need to defend the business 6 when necessary,” as the planned remarks of one of Amway’s highest-ranking executives put it in 7 connection with a webinar held with Diamonds in April 2021. In doing so, the executive 8 confirmed that if IBOs did not reach the 60 percent threshold, bonuses would not only be 9 reduced for those IBOs but also for their uplines, which included all of the Diamonds. As a 10 result, in early 2021, Amway leaders made it clear to Diamonds that they would lose money if 11 their downlines did not report making customer sales to Amway. 12 202. The revised 70 percent rule nominally requires IBOs to sell at least 70 percent of 13 their blueprint to customers or else their bonuses and the bonuses of their uplines will be 14 reduced. This means that only 30 percent of an IBO’s blueprint can be for personal consumption 15 under the rule. However, Amway decided that 10 percent of an IBO’s blueprint could be used as 16 samples or in product demonstrations, yet still count toward the 70 percent. Accordingly, the 17 current 70 percent rule only requires that IBOs have or report that 60 percent of their blueprint 18 consists of customer sales. 19 20 203. Amway illustrates the 60 percent requirement of its 70 percent rule to IBOs as follows: 21 22 23 24 25 26 Amway does not ask its IBOs to regularly report their use of Amway products as samples or in COMPLAINT - 69 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 70 of 83 1 product demonstrations, which Amway calls “Sales Support,” and there is no mechanism for 2 IBOs to do so. 3 204. In connection with these changes, Amway started calling customer sales, 4 “Verified Customer Sales” or “VCS.” According to Amway, VCS is the combination of 5 purported online sales to customers and purported customer sales that are self-reported by IBOs. 6 205. Amway planned to implement the restrictions on bonuses relating to the 60 7 percent requirement in January 2022, but the restrictions did not ultimately go into effect until 8 September 2022. Nevertheless, the planned implementation in early 2022 and pressure from 9 Amway executives on IBO leaders led IBO leaders to increase the pressure on IBOs to self- 10 report purported customer sales to Amway in 2021. IBO leaders often blamed the FTC either 11 explicitly or implicitly for the changes to Amway’s rules when instructing their downlines about 12 them and how to circumvent them. For example, in an August 2021 email, a WWG Diamond 13 from Minnesota told IBOs in his downline that the 60 percent requirement “has literally been 14 forced on Amway by the regulatory agencies.” 15 206. IBO leaders also began to use potential regulatory scrutiny to justify telling IBOs 16 to fake their customer sales. In doing so, IBO leaders emphasized that faking customer sales 17 would protect IBOs’ bonuses and not take much time away from the real business of recruiting. 18 In teaching his downline how to falsely report personal purchases as customer sales in June 19 2021, an LTD Emerald from the Dayton, Ohio area, explained that the goal of the 60 percent 20 requirement was to generate “paperwork” that could be given to the FTC: 21 22 23 24 25 26 “What the FTC wants is they want a high percentage of customer volume, Verified Customer Sales, and a lower percentage of personal sales. … Amway wants to see 70 [percent] but they give a 10 percent leeway so they need to be 60 [percent]. … If you don’t do 60 [percent], you’re basically not going to get paid, and your volume will not count for anyone. … So there’s no reason not to do 60 [percent]. I’m going to show you. Amway’s not going to be like checking how you do this. They don’t even care. It’s just a rule that they have to have to have paperwork to show the FTC. Okay? Amway’s not going to audit like how we do what we do. … When Amway shows them [the FTC] the paperwork that every one of our IBOs has 60 percent customer volume, there’s nothing that can be COMPLAINT - 70 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Document 1 Filed 09/17/26 Page 71 of 83 talked about any further.” 207. The LTD leader went on to tell his downline how “[i]t’s not going to take a whole lot of extra effort” to circumvent the 60 percent requirement, which he claimed involved “changing a little bit of thought process.” The Emerald told his downline to create a name for their own Amway business and to register that business with Amway as a customer of their own IBO. To do that, he said, IBOs should create an email address for their business and give that and a cell phone number to Amway when registering their fake “customer” account with Amway. The Emerald told his downline they could use a “burner” phone purchased from Walmart for this purpose, among other things. He went on to tell his downline that they should use this “customer” account to make personal purchases: “So what you can do is you can set yourself up—you set your business up as a customer that’s going to be your number one customer for your website.” 208. Within LTD and WWG, it was understood that it was easy to fake online sales to purported customers. For example, one LTD IBO, who said she was being “forced to lie” by the new VCS requirements, told an LTD Diamond in a 2022 email: “All we have to do is funnel our PV through a friend or relative.” Similarly, in December 2021, an IBO texted a WWG Diamond from Colorado about “recent teaching ... around VCS” that included placing orders to get VCS using “a pseudonym or a family members name.” Likewise, another IBO told a WWG Diamond from Minnesota in a February 2022 email that “to make the 60 percent” he was paying for the purchases of a registered “customer”: “I got my registered customer set up and one product ordered for her which I paid for plus shipping. … If I understand correctly I would divert a large part of my usual order through the customer’s account so that it will masquerade as VCS retail.” 209. There was an even easier method to fake customer sales, however, which was one that Amway’s own employees knew would be used by IBOs to fake their VCS: the self-reporting of purported customer sales through what Amway called its “Create a Receipt” system or tool. The Create a Receipt system allowed IBOs to purchase Amway products with their own credit cards, have products shipped to their own homes, and then claim to have resold the products to COMPLAINT - 71 Case No. __:___-cv-______ FEDERAL TRADE COMMISSION One Bowling Green, Suite 318 New York, NY 10004 (212) 607-2829 Case 2:26-cv-03474 Document 1 Filed 09/17/26 Page 72 of 83 1 customers using a simple online form. The form required IBOs to provi [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aa61ff89bf9d4c023. Public record. Not legal advice.