On 10/26/21, the Federal Trade Commission announced that it is putting more than 1,100 businesses that pitch money-making ventures on notice that if they deceive or mislead consumers about potential earnings, the FTC won’t hesitate to use its authority to target them with large civil penalties. The notices are being sent to a broad array of businesses that cover a wide range of money-making opportunities, including multi-level marketing, “gig” employers, investment and business coaching, franchises, business opportunities, and others. A recipient’s presence on this list does not in any way suggest that it has engaged in deceptive or unfair conduct. A full list of the businesses receiving the Notice from the FTC is available on the FTC’s website.
The Notice of Penalty Offenses allows the agency to seek civil penalties against a company that engages in conduct that it knows is unlawful, and that has been found unlawful in a previous FTC administrative order, other than a consent order.
The Notice sent to the companies outlines a number of practices that the FTC determined to be unfair or deceptive in prior administrative cases. Broadly, the cases found that it was unlawful to make false, misleading, or deceptive representations concerning the profits or earnings that may be anticipated by a participant in a money-making opportunity. This includes, for example, representations that participants will make a profit, or that represented profits are typical. The Notice also describes other practices that the FTC has determined to be unfair or deceptive, such as falsely telling consumers they do not need experience to earn income or that they must act immediately to participate.
The full FTC release can be found here.
A copy of the notice sent to businesses can be found here.
A list of businesses receiving the notice can be found here.