How do I report an MLM or pyramid scheme?
Report to the FTC at ReportFraud.ftc.gov (US) or Trading Standards via Citizens Advice (UK). Your state attorney general also handles pyramid scheme complaints.
Last reviewed: 10 June 2026
Explanation
Multilevel marketing (MLM) companies occupy a legal grey area, but pyramid schemes that primarily reward recruitment rather than genuine product sales are illegal. If you believe an MLM is operating as a pyramid scheme, the FTC is the primary federal authority in the US. File at ReportFraud.ftc.gov with as much detail as possible about the income structure, recruitment incentives, and whether products are genuinely sold to end consumers or mostly purchased by participants themselves.
State attorneys general also take pyramid scheme cases, particularly when large numbers of state residents are affected. Find your state AG at naag.org. Some states have stricter pyramid selling laws than federal law, making state-level prosecution easier.
In the UK, Trading Standards has authority to investigate pyramid selling, which is illegal under the Trading Schemes Act. Report via the Citizens Advice consumer helpline at citizensadvice.org.uk. For multi-level marketing companies that are also FCA-regulated, report to the FCA if the investment or savings element is involved.
When filing, provide specific income disclosures you were shown during recruitment, the structure of commission payments, any starter kits you were required to purchase, and the total you invested versus total you received back. Detailed financial records significantly strengthen a case.
Common red flags
- Earnings came primarily from recruiting new members rather than selling to genuine customers
- You were required to buy a starter kit or minimum monthly product order to remain active
- Income disclosures showed the vast majority of participants earned little or nothing
- Upline members pressured you to recruit family and friends before earning commissions
- Products could only be sold to other participants, not to an independent retail market
- The company described itself as 'not an MLM' while operating a commission structure based on downline recruitment
What to do now
- Report to the FTC at ReportFraud.ftc.gov and to your state AG at naag.org
- In the UK, report to Trading Standards via Citizens Advice
- Document your total investment versus total return
- Preserve all income disclosure documents and recruitment materials
- Request any refund due under the cooling-off period
- Read /scams/mlm-pyramid-scams for analysis of typical structures
Frequently asked questions
What is the difference between a legal MLM and an illegal pyramid scheme?
In a legal MLM, most revenue comes from genuine retail sales to end consumers. In a pyramid scheme, most revenue comes from recruiting new participants who each buy into the scheme. If there is little genuine retail market, it is likely a pyramid scheme regardless of what products are nominally sold.
Can I get my starter kit investment back?
Some MLM companies have a buyback policy for unused inventory under FTC guidance. Check the company's policies, request a refund in writing, and if refused, raise the issue with the FTC or your state AG.