Staying on the Right Side of the FTC with Income Statements

Establishing simple guidelines for leaders reduces company risk

Kevin Thompson is an MLM attorney and is co-founder and partner of law firm Thompson Burton.

Any income claim that is considered to be deceptive needs a disclosure. The FTC considers an income claim deceptive where information is misrepresented or omitted that would affect a reasonable consumer’s judgment. 

In most cases, distributors are simply unaware of how to promote their opportunities appropriately.

The majority of income claims made by a distributor are more likely than not truthful statements, but the Federal Trade Commission (FTC) is not just concerned with the truth. Promises of riches and an opportunity to live the American Dream can cloud even the most reasonable person’s judgment. With this in mind, the FTC wants to ensure that all potential distributors make a fully informed decision before choosing to join an MLM program.