FTC Chair Edith Ramirez, Notable MLM Opponent, To Step Down Next Month

With the chairperson of the Federal Trade Commission stepping down on February 10, proponents of multi-level marketers (MLMs) have reason for tentative hope.

Edith Ramirez, a known opponent of MLMs, had widely criticized elements of the business model as illegitimate and denounced corporations implementing them.

Ramirez generally objected to their inaccurate representation of business opportunities and their poor accountability standards. She denounced as illegitimate the model to “sell” products to independent distributors, report the earnings and shirk the onus of making actual consumer sales.

With the Democratic chairperson out of the picture and the likelihood of a more conservative successor, MLMs may see the removal of certain hurdles that had previously hindered their progress.

Companies That May Benefit

Among those most relieved by the leadership change is Herbalife Ltd. (NYSE: HLF).

In July, the FTC had reached a $200-million settlement with Herbalife to compensate consumers drawn into a pyramid-like scheme.

“This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit,” Ramirez said at the time.

Despite the settlement, the battle is not over for Herbalife. The business faces ongoing conditions that will continue to impact its growth in the immediate future.

The new FTC chairperson may serve to benefit Herbalife as it moves forward in the process.

Other MLMs looking to profit from the change include Avon Products, Inc. (NYSE: AVP), Nu Skin Enterprises, Inc. (NYSE: NUS) and Primerica, Inc. (NYSE: PRI).

Image Credit: Carol M. Highsmith [Public domain], via Wikimedia Commons