FTC Bans Forever Living from Making Deceptive Earnings Claims, Says Most Participants Made No Money
Regulators allege MLM giant misled workers with images of luxury cars and giant checks while nearly 90% of new recruits failed to recoup $300 start-up cost
WASHINGTON, D.C. — The Federal Trade Commission has permanently prohibited Forever Living Products International and its top executives from making deceptive earnings claims, alleging the multilevel marketing company misled consumers into believing they could earn substantial income when the vast majority of participants made little or no money — and many actually lost money.
The proposed order resolves FTC charges against Forever Living, its CEO Gregg Maughan, and its President Aidan O’Hare, as well as Forever Living.com LLC. The company sells health and wellness products through a network of participants called Forever Business Owners (FBOs), who can earn money by selling products and recruiting new participants.
“Today’s complaint alleges that Forever Living deceived prospective workers with false and unsubstantiated earnings claims,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “Forever Living misled workers with promises of substantial income that, in reality, bore little to no resemblance to what participants actually earned. Deceptive earnings claims do not just mislead workers—they divert workers away from genuine, income-generating jobs.”
According to the FTC’s complaint, Forever Living used in-person meetings, social media posts, videos, and print materials to tout potential earnings — often featuring images of luxury cars, giant checks, and claims ranging from extra income to replacing a full-time job. In one online marketing video, O’Hare told viewers, “We will be paying millions in bonuses next year. The only question is, whose name goes on that check?”
But company data tells a starkly different story, the FTC said. In each of the last five years, at least 77% of FBOs who purchased, sold, or recruited during the year received no compensation at all. Even after two full years as FBOs, more than 89% of new participants had not received enough income from Forever to recoup their initial $300-plus start-up cost. Many participants lost money after factoring in expenses such as shipping costs.
The FTC also alleged that for years, the company’s public income disclosure statements falsely implied that everyone who had chosen to pursue the MLM opportunity was making money. The statements suggested that others who “joined” Forever only wished to purchase products “at a discounted price” and had “elected not to participate” in the marketing plan. In truth, Forever knew that nearly 90% of FBOs had received no income and had no basis for suggesting they were not trying to make money.
Company training materials encouraged FBOs to tout Forever Living as a flexible way to earn extra money, the complaint alleges. In one training video, FBOs were told to show pictures of cars received through incentive programs or destination events and to tout that “this is a business where you can earn a lot of income.” Forever Living also misled FBOs with claims that they were likely to earn money based on purchases or sales made by recruits in their “downline” — when company data shows that less than 7% of FBOs received any such income.
Under the proposed order, Forever Living, Maughan, and O’Hare must have substantiation for any earnings claims and provide that substantiation to any U.S. consumer who requests it. They are prohibited from misrepresenting earnings, the reasons participants do not make money (including claims that non-earners simply aren’t trying), and the likelihood of recruiting others into a downline.
FTC Bans Kochava from Selling Sensitive Location Data Without Explicit Consumer Consent
Data broker accused of tracking millions of Americans’ movements to health clinics, places of worship without their knowledge
WASHINGTON, D.C. — The Federal Trade Commission will prohibit data broker Kochava and its subsidiary from selling or sharing sensitive location data without consumers’ affirmative express consent, settling allegations that the companies sold location data from hundreds of millions of mobile devices that could be used to trace individuals’ movements to sensitive locations such as reproductive health clinics and places of worship.
The FTC first sued Idaho-based Kochava in August 2022, charging that its collection, use, and disclosure of precise location data invaded consumers’ privacy by revealing their movements. The agency alleged that because consumers were unaware of and did not consent to this data sharing, they had no way of avoiding the harm resulting from its collection and disclosure.
Under the proposed order resolving the FTC’s litigation, Kochava and its subsidiary, Collective Data Solutions (CDS), which has since taken over Kochava’s data broker business, will be permanently banned from selling, licensing, transferring, sharing, or disclosing sensitive location data unless they obtain a consumer’s affirmative express consent and the data is used solely to provide a service directly requested by that consumer.
The order also requires the companies to:
- Establish and implement a sensitive location data program to develop a comprehensive list of sensitive locations to prevent the sale, transfer, or disclosure of such data.
- Implement a supplier assessment program designed to confirm that consumers have provided consent for the collection and use of all location data obtained.
- Submit incident reports to the FTC whenever the companies determine a third party has shared consumers’ precise location data in violation of contractual requirements.
- Allow consumers to request the names of any business or individual to which CDS or Kochava has sold their precise location data, and provide an easy way for consumers to withdraw consent.
- Create a data retention schedule requiring the deletion of data on an established timeframe.
The order will have the force of law once approved and signed by the district court judge.
FTC Forces 365 Retail to Divest Rival Micromarket Business in $848 Million Merger Deal
Regulators say combining the two largest providers of workplace food kiosks would drive up prices for millions of American workers
WASHINGTON, D.C. — The Federal Trade Commission on Thursday required 365 Retail Markets LLC to divest a competing micromarket kiosk business as a condition of completing its $848 million acquisition of Cantaloupe Inc., a move regulators said would protect American workers from higher food prices at unattended workplace convenience stores.
The proposed consent order mandates that 365 Retail — the nation’s largest provider of micromarket kiosks — sell Cantaloupe’s Three Square Market business to Seaga Manufacturing Inc., a company that currently offers unattended foodservice retail products but does not compete in the micromarket space. The divestiture is designed to preserve competition in an industry that serves millions of workers who rely on micromarkets for affordable, freshly prepared food during the workday.
“Millions of workers rely on micromarket kiosks to buy affordable, fresh food during the workday,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “Today’s FTC action seeks to ensure that consumers don’t face higher food prices because of this acquisition. The divestiture of Cantaloupe’s Three Square Market business will preserve competition in the micromarket kiosk industry, directly benefitting American workers that depend on these kiosks for their meals.”
Micromarkets are small, unattended convenience stores typically found in office breakrooms and similar settings, offering freshly prepared food that is not available through traditional vending machines. Both 365 Retail and Cantaloupe provide not only the physical kiosks but also back-end software services that allow foodservice operators to manage multiple locations.
According to the FTC’s complaint, the proposed merger would eliminate head-to-head competition between the two largest providers, likely driving up prices for micromarket kiosks and related software while reducing product and service quality. Those increased costs would likely be passed on to consumers in the form of higher food prices, the agency alleged.
The complaint further stated that the deal as originally structured would give 365 Retail the ability and incentive to foreclose competitors by eliminating interoperability between its products and those of rivals. For example, 365 Retail could deny other companies the ability to integrate their software with its micromarket kiosks, forcing food service operators to switch products or services at higher costs.
To resolve these concerns, Seaga will acquire Three Square Market, creating a new standalone competitor against 365 Retail. The proposed order also requires 365 Retail to offer integrations between its software and hardware on reasonable and non-discriminatory terms to customers and third parties.
Edward Buthusiem will be appointed as a monitor to oversee compliance. The monitor will receive notifications whenever 365 Retail fails to comply with or complete an integration request, or raises integration fees for existing integrations.
For a period of 10 years, 365 Retail must provide advance written notice to the FTC before acquiring any interest in a U.S. company involved in micromarket kiosks.
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