The shortest answer
dōTERRA is a direct-selling company operating a multi-level (MLM) model. According to the company, compensation is based on product sales. That doesn't mean everyone will earn: the FTC reminds us that most people in legitimate MLMs earn little or nothing, and some lose money.
How the FTC tells them apart
- A legitimate MLM pays you based on sales to retail customers, without needing to recruit new distributors.
- In a pyramid scheme, income depends mainly on how many people you recruit, not on how much product you sell.
Warning signs
- Promises of high, fast earnings.
- Emphasis on recruitment as “the real way to make money”.
- Time pressure and discouragement from checking the documents.
- Having to buy more products than you can use or resell in order to keep your status.
What to ask yourself before deciding
- Do I understand where compensation comes from, based on the official plan?
- Do I know the income disclosure and how much the typical participant earns?
- Do I have clear returns and cancellation terms in writing?
- Can I afford to lose the money I put in?
The rules
In the European Union, Directive 2005/29/EC on unfair commercial practices prohibits setting up and promoting pyramid promotional schemes. In Poland the Act on Counteracting Unfair Market Practices applies, in Portugal Decreto-Lei 57/2008 (práticas comerciais desleais), and in Brazil the rules on the “popular economy” (Lei 1.521/1951). These are pointers for you to check, not legal advice — if in doubt, ask a lawyer or the consumer-protection authority in your country.
