FEDERAL TRADE COMMISSION 

NOTICE OF PENALTY OFFENSES 

CONCERNING MONEY-MAKING OPPORTUNITIES 

The Federal Trade Commission has determined that the following practices used in the 

advertising or promotion of money-making opportunities are deceptive or unfair and are 

unlawful under Section 5(a)(1) of the Federal Trade Commission Act. 

1. It is an unfair or deceptive trade practice to make false, misleading or deceptive 

representations concerning the profits or earnings that may be anticipated by a participant 

in a money-making opportunity (i.e., a person who has been accepted or hired for, has 

purchased, or otherwise is engaging in the money-making opportunity).1

 For example: 

a. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, 

that participants will be or are likely to be profitable (i.e., to earn or receive more 

income through the use of the money-making opportunity than the amount of any 

purchase price and expenses).2 

b. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, 

that a substantial number of participants have made or can make the represented 

profits or earnings.3 

c. It is an unfair or deceptive trade practice to represent, explicitly or implicitly, the 

earnings which may be secured by participants, when the representation is made 

1 Macmillan, Inc., et al., 96 FTC 208, 232, 301-02, 325-29, 331 (1980); Encyclopaedia 

Britannica, Inc., et al., 87 FTC 421, 450, 486-88, 505, 510, 531-32 (1976); National Dynamics 

Corp., 82 FTC 488, 512-13, 543-44, 568 (1973), as modified at 85 FTC 1052, 1059-61 (1975); 

Ger-Ro-Mar, Inc., 84 FTC 95, 113-14, 117-119, 123-125, 132-135, 138, 149-150, 160-162 

(1974), affirmed in relevant part at 518 F.2d 33 (2d Cir. 1975), as modified at 86 FTC 841 

(1975); Holiday Magic, 84 FTC 748, 948, 984, 1032-1034, 1065, 1069 (1974), as modified at 85 

FTC 90 (1975); Universal Credit Acceptance Corp., 82 FTC 570, 591-600, 633, 668-70 (1973); 

Universal Elec. Corp., 78 FTC 265, 271-74, 294, 297 (1971); Windsor Distrib. Co., 77 FTC 204, 

212-17, 220-23 (1970); Waltham Watch Co., 60 FTC 1692, 1703-05, 1710, 1724-25, 1727-28, 

1730 (1962); Abel Allan Goodman Trading As Weavers Guild, 52 FTC 982, 984, 987-88, 991-

92, 996-97 (1956), order affirmed 244 F.2d 584 (2d Cir. 1957); Washington Mushroom Indus., 

Inc., 53 FTC 368, 370, 376, 379-80, 383-84, 386 (1956); Von Schrader Mfg. Co., 33 FTC 58, 63-

66 (1941).

2 Encyclopaedia Britannica, 87 FTC 421, 450, 486-87, 505, 510, 531-32 (1976); Ger-Ro-Mar, 

84 FTC 95, 113-14, 117-119, 123-125, 132-135, 138, 149-150, 160-162 (1974); Universal 

Credit, 82 FTC 570, 592-93, 595, 632-33, 668-70 (1973); Universal Elec., 78 FTC 265, 271-74, 

294-95, 297 (1971); Waltham Watch, 60 FTC 1692, 1703-05, 1710-11, 1716, 1724-25, 1727-28, 

1730 (1962).

3 National Dynamics, 82 FTC 488, 511-13, 543-44, 564, 568 (1973), as modified at 85 FTC 

1052, 1059-61 (1975). 
 

 

 

without knowledge, or with only limited knowledge, of the actual profits or 

earnings usually and ordinarily received by participants.4 

d. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, 

that participants will or are likely to earn any specific amount or percentage.5 

e. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, 

that the represented profits or earnings are the ordinary, typical, or average profits 

or earnings made by participants.6 This includes by means of the representation 

of an earnings figure or the attribution of earnings figures to specific participants, 

both of which impliedly represent that such figures are likely, are earned by a 

substantial number of participants, or are the typical, ordinary, or average results, 

absent clear and conspicuous disclosure of the relevant context, such as the time 

and effort actually expended by participants who made the amount represented, 

the percentage of participants making the amount represented, and the amount 

typically and ordinarily made by participants.7 

f. It is an unfair or deceptive trade practice to misrepresent the profits or earnings 

that may be anticipated by a prospective participant by failing to disclose 

conditions or limitations affecting such income, such as expenses to be borne by 

the participant.8 

2. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, that 

sales of a money-making opportunity will be made to only a limited number of 

prospective participants (including, for example, that sales will be made to only a limited 

number of prospective participants in a geographic region), when sales will be made to 

any person who is willing and able to pay.9 

4 Von Schrader Mfg. Co., 33 FTC 58, 63-66 (1941).

5 Encyclopaedia Britannica, 87 FTC 421, 450, 486-87, 505, 510, 531-32 (1976); National 

Dynamics, 82 FTC 488, 511-13, 543, 564, 568 (1973), as modified at 85 FTC 1052, 1059-61 

(1975); Holiday Magic, 84 FTC 748, 948, 984, 1032-1034, 1065, 1069 (1974); Universal Credit, 

82 FTC 570, 592, 594-95, 632-33, 668-70 (1973); Universal Elec., 78 FTC 265, 272-74, 294, 

297 (1971); Windsor, 77 FTC 204, 214-17, 220-21, 223 (1970).

6 Macmillan, 96 FTC 208, 232, 235-36, 245-46, 254-55, 301-02, 325-29, 331 (1980); National 

Dynamics, 82 FTC 488, 511-13, 543-44, 564, 568 (1973), as modified at 85 FTC 1052, 1059 

(1975); Abel Allan Goodman, 52 FTC 982, 984, 987-88, 991-92, 996-97 (1956), order affirmed 

244 F.2d 584 (2d Cir. 1957); Washington Mushroom, 53 FTC 368, 370, 376, 379-380, 383-84, 

386 (1956); Von Schrader, 33 FTC 58, 63-66 (1941).

7 Macmillan, 96 FTC 208, 232, 301-02, 326-29, 331 (1980); National Dynamics, 82 FTC 488, 

511-13, 543-44, 563-64, 568 (1973), as modified at 85 FTC 1052, 1059-61 (1975). 

8 Encyclopaedia Britannica, 87 FTC 421, 445-50, 486-87, 505, 510, 531-32 (1976).

9 Universal Elec., 78 FTC 265, 273-74, 295-97 (1971); Windsor, 77 FTC 204, 213, 215-17, 220-

21, 223 (1970); Waltham Watch, 60 FTC 1692, 1704-05, 1710-11, 1723, 1725, 1727-28, 1730 

(1962); Washington Mushroom, 53 FTC 368, 370-71, 379-380, 386 (1956). 
 

 

3. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, that 

prospective participants will be screened or evaluated for suitability to use or benefit 

from the money-making opportunity.10 

4. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, that 

participants do not need experience in order to earn income.11 

5. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, that a 

prospective participant must act immediately to purchase or to be considered for a 

money-making opportunity.12 

6. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, that 

purchasing a money-making opportunity is risk-free or involves little risk.13 

7. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, the 

position being offered to prospective participants in a money-making opportunity, such as 

by failing to disclose that it is a sales position when such is the case.14 

8. It is an unfair or deceptive trade practice to misrepresent, explicitly or implicitly, the 

amount or type of training that will be given to participants in a money-making 

opportunity.15 

10 Macmillan, 96 FTC 208, 272-73, 320, 327, 331 (1980); Universal Credit, 82 FTC 570, 608-

09, 633, 637, 668, 673 (1973); Windsor, 77 FTC 204, 213, 215, 217, 220-21, 223 (1970); 

Waltham Watch, 60 FTC 1692, 1704-05, 1710-11, 1725, 1727-28, 1730 (1962).

11 Universal Elec., 78 FTC 265, 272-74, 295, 297 (1971); Washington Mushroom, 53 FTC 368, 

370-71, 378-80, 386 (1956).

12 Universal Credit, 82 FTC 570, 610, 632-33, 637-38, 668, 673 (1973). 

13 Universal Credit, 82 FTC 570, 594, 611-12, 633, 638, 668, 673 (1973). 

14 Encyclopaedia Britannica, 87 FTC 421, 486-88, 505, 510, 531 (1976).

15 Encyclopaedia Britannica, 87 FTC 421, 486-88, 505, 509-10, 531-32 (1976).