Submission Number: 00005
Received: 1/11/2011 1:08:40 PM
Commenter: Stephen Barrett
State: North Carolina
Agency: Federal Trade Commission
Initiative: Trade Regulation Rule on Disclosure Requirements and Prohibitions Concerning Business Opportunities - FTC File No. R511993
Attachments: No Attachments
Your failiure to demand truthful disclosure of income potentials for MLM is the worst FTC decision I have ever seen. Your conclusion that disclosure won’t help people distinguish between pyramid schemes and “legitimate MLMs” is correct – but it is irrelevant and is a straw man. The real question should not be whether or not an MLM is a pyramid but how can investors get information to make a rational decision. Surely you must know that the percentage of new distributors who make significant income is extremely low. The FTC has been told this repeatedly and could easily have checked whether this is true. (If you couldn’t, how could prospective investors do so?) I am also concerned about your statement that commentors who said fraud was widespread within the MLM industry didn’t present any evidence. I commented that I have investigated hundreds of health-related MLMs and found that every single one made misleading claims for their products. If you want evidence, ask your own staff. I used to send it regularly to the FTC, but a staffer told me the agency did not have the resources to go after the vast majority it knew about so I stopped sending more evidence. You should be ashamed of yourselves for failing to curb the MLM industry.