The FTC settled allegations against Steven and Gina Merritt, high-level participants in the LifeWave MLM company, for making false and unsubstantiated earnings claims to recruit workers despite most LifeWave participants earning little to no money. The stipulated final order prohibits the Merritts from making deceptive earnings representations and requires them to notify their downline participants of the order's prohibitions. No monetary penalty was imposed.
The stipulated final order permanently prohibits the Merritts from making deceptive or unsubstantiated earnings claims related to any business venture, including misrepresenting potential participant earnings, actual earnings of themselves or others, reasons for low participant earnings, or any other material fact about a business opportunity. All earnings claims must be substantiated with written evidence at the time they are made, with such evidence provided to interested individuals upon request. The Merritts must also notify all their downline MLM participants of the FTC’s allegations and the order’s prohibitions on deceptive earnings claims.
In-house legal teams should review all agreements with multi-level marketing (MLM) partners, affiliate marketers, and business opportunity vendors to ensure strict prohibitions on unsubstantiated earnings claims. Key clauses to audit include marketing representation warranties, indemnification provisions for deceptive advertising, requirements to provide written substantiation of all earnings claims, and mandatory income disclosure statement attachments. Additionally, agreements with MLM participants should include clauses requiring prompt notification of regulatory enforcement actions and compliance with FTC marketing guidelines to mitigate liability for downstream deceptive conduct.
Entity
Steven and Gina Merritt
Industry
OtherOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2026/04/ftc-takes-action-against-high-level-mlm-participants-who-deceived-workers-about-amount-money-they
Merritt Complaint
https://www.ftc.gov/system/files/ftc_gov/pdf/Merritt-Complaint.pdf
Merritt StipulatedOrder
https://www.ftc.gov/system/files/ftc_gov/pdf/Merritt-StipulatedOrder.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"FTC Takes Action Against High-Level MLM Participants who Deceived Workers About the Amount of Money They Can Earn"
"April 27, 2026"
"Federal Trade Commission"
"order settling the FTC’s allegations"
"Steven and Gina Merritt, senior-level participants in a MLM called LifeWave"
"The FTC alleged in a complaint that Steven and Gina Merritt, senior-level participants in a MLM called LifeWave, deceived consumers about the amount of money they could earn from selling products and recruiting new participants for the company, which sells health and wellness products."
The FTC sent warning letters to 12 companies offering 'nudify' tools that generate nonconsensual intimate images, for failing to comply with the TAKE IT DOWN Act (TIDA) by not providing a mechanism for victims to request removal of such content. The letters urge immediate compliance with TIDA, which requires platforms to remove nonconsensual intimate images within 48 hours of a valid request. Noncompliant companies may face future legal action and civil penalties of up to $53,088 per violation.
The FTC began enforcing the TAKE IT DOWN Act on May 19, 2026, a law requiring covered platforms to establish a process for victims to request removal of nonconsensual intimate images and delete such content within 48 hours of a valid request. The agency launched a consumer complaint portal, issued compliance guidance for businesses and consumers, and sent reminder letters to major platforms including Meta, TikTok, and X about their obligations under the law. No specific penalties or enforcement actions against individual companies were announced in this release.
$6.5M
A federal court held Cliq Inc. and its executives Andrew Phillips and John Blaugrund in civil contempt for multiple violations of a 2015 FTC order requiring the payment processor to prevent enabling consumer fraud. The court found the defendants facilitated fraud by processing transactions for high-risk merchants, avoiding fraud monitoring, failing to conduct required underwriting, and ignoring chargeback thresholds. The court imposed $6.5 million in civil contempt sanctions against the defendants.
$795.8M
The FTC and State of Nevada settled charges with lead defendants of the IM Mastery Academy MLM scheme, including Chris and Isis Terry and their affiliated companies, over false earnings claims used to promote financial training programs and a multi-level marketing venture. The stipulated order imposes a $795.8 million judgment, with defendants surrendering nearly $90 million in assets including luxury real estate, vehicles, jewelry, and a yacht, totaling over $100 million with prior judgments from other involved defendants. The order also bans defendants from selling trading-training services, prohibits false earnings claims, and restricts deceptive practices including negative-option misrepresentations and telemarketing violations.
The FTC and State of Illinois, via the Department of Justice, filed a complaint against B.E.S.T. GDR LLC (d/b/a Premium Home Service) and its owner Yosef Bernath for creating thousands of fake home repair business listings with fabricated five-star reviews to deceive consumers. The defendants allegedly routed consumer calls to unqualified representatives, arranged for unlicensed technicians, and violated the FTC Act, Reviews and Testimonials Rule, Gramm-Leach-Bliley Act, and Illinois consumer protection laws. No monetary penalty has been imposed yet as the case is in initial filing stages.
Federal Trade Commission Chairman Andrew N. Ferguson sent letters to over a dozen major technology companies reminding them of their obligation to comply with the Take It Down Act (TIDA) by May 19, 2026. TIDA requires covered platforms to establish a process for victims, including children, to request removal of nonconsensual intimate images, with takedown of content and all identical copies required within 48 hours of a valid request. The FTC also issued supplemental guidance to help companies prepare for compliance and warned that it will monitor and enforce violations of the law.