Posting with Consequences: FTC Brings Earning Claims Action Against Alleged MLM Participant

The FTC is no stranger to enforcement against alleged multilevel marketing (MLM) schemes. Historically, those actions have focused on the companies operating the programs themselves. But on April 13, the FTC added a notable twist by bringing an action against an individual participant – rather than the MLM entity – who allegedly used deceptive earnings claims to recruit new members. The case, FTC v. Wellington, reflects a potential shift in how the Commission approaches consumer protection in the current administration.

According to the FTC’s complaint, Stormy Wellington was a high‑level participant in two MLM schemes – Total Life Changes (TLC) and Farmasi – and used YouTube and social media to recruit new members by sharing deceptive earnings claims. The FTC alleged that Wellington claimed recruits could earn hundreds of thousands, or even millions, of dollars through the schemes.

Those aspirational claims, the FTC alleged, were starkly disconnected from reality. Income disclosure statements referenced by the Commission showed that in 2023 more than 75 percent of TLC’s active participants earned no compensation at all and, at most, 0.4 percent earned more than $5,000. Farmasi’s financial disclosures were similarly bleak, with fewer than 1 percent of active participants earning income in the six‑figure range that Wellington allegedly promised.

The complaint was announced in conjunction with a stipulated order between the FTC and Wellington, which imposes sweeping restrictions on Wellington’s future conduct. Among other things, the order permanently prohibits her from misrepresenting – or assisting others in misrepresenting – how much money participants can earn through any business venture, including MLM schemes. It also bars Wellington from making earnings claims unless such claims are not misleading, they can be substantiated, and Wellington can provide evidence upon request. The order does not require Wellington to pay any money. This could change in the future for MLM companies and individual participants if the FTC’s proposed Earnings Claims Rule is enacted. This was proposed and put out for public comment in early 2025. And while we haven’t heard much about it formally since, it could still be in play.

Takeaways

At first glance, Wellington may look like familiar FTC enforcement: allegations of an MLM scheme, associated false earnings claims, and consumer harm. But the Commission’s public messaging suggests something more. In announcing the action, the director of the FTC’s Bureau of Consumer Protection, Christopher Mufarrige, emphasized, “Today’s actions make clear that the FTC will go after individuals who deceive consumers trying to earn a living.” Such framing underscores a broader enforcement message from the current FTC: Enforcement actions that once focused almost exclusively on companies may now reach individual actors, even when those individuals are not running the scheme but are instead operating within it.

As such, this case raises important questions beyond the MLM context. If the FTC is willing to pursue high‑level participants for deceptive earnings claims, might similar theories apply to influencers, brand ambassadors or even employees who make misleading representations online? Could the next target be an influencer who fails to disclose a material connection rather than the brand itself? While those questions remain open, Wellington serves as a clear warning to individuals acting in a way that the FTC considers deceptive.

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Wellington is not the only recent FTC earnings claims-related enforcement action. For a look at the other earnings claim case filed on April 13, check out Amy, Daniel, and Noah’s FTC Brings Second Earnings Claims Case in One Day, Signals Heightened Scrutiny.