| Comment Number: | 522418-00070 |
| Received: | 5/22/2006 7:01:33 PM |
| Organization: | Abundant Life of Colorado - USANA |
| Commenter: | Jane Bueling |
| State: | CO |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| Attachment: | 522418-00070.pdf Download Adobe Reader |
Comments:
Dear Sir/Madam, This letter is in response to the proposed New Business Opportunity Rule R511993. If not modified, it will be a significant burden and impediment to the network marketing industry. Although well-intended, this new rule represents a very real threat to a burgeoning aspect of the free market. The proposed rule would require a 7 day waiting period to enroll new distributors. A new associate would have to be sold two separate times, even if the start-up fee is a mere $19.95. I am completely opposed to a seven day waiting period because it is an excessive burden to distributors and impediment to new business development. The rule requires that any earnings claim statement made by the distributor or company to a prospect, whether written or oral, general or specific, be validated with a detailed “Earnings Claims Statement Required by Law”. Additionally, the distributor would be required to provide written substantiation of any earnings claim made upon request. I support the disclosure of an average earnings income statement but I oppose being forced to provide written substantiation because it is an excessive burden. The rule also calls for the release of any information regarding prior litigation and civil or criminal legal actions involving misrepresentation, or unfair or deceptive practices, even if the company is found innocent. Legal action is currently being taken too often and too frivolously, and this rule poses an undue threat and burden to companies. I would support the disclosure of previous litigation involving fraud and misrepresentation only if the party is found guilty. Finally, the rule requires the disclosure of a minimum of 10 purchasers closest to you. As stated, this requirement is a burden and impediment particularly for brand new distributors, and a violation of personal confidentiality. As a requirement, it could threaten the business relationship of the references. In addition, it subjects the references to cross-marketing by competitors. I recommend contact information for purchasers be available upon request, that their availability be published on company materials, and due to internet marketing, they not be limited to geographic proximity. In this era of down-sizing, globalization and out-sourcing of jobs, network marketing is one of the few remaining resources for the average person to leverage limited time and finances into extra income and even into a career. This outlet needs to be encouraged as there are now 13,000,000 Americans involved in the industry. Once scoffed at, it is now being promoted by best selling authors and financial experts such as Paul Zane Pilsner, and Robert Kiyosaki. A number of blue chip corporations such as Citicorp MCI and IBM are now using network marketing successfully, and many network companies, such as Manna-Tech, Herbalife, Nu-Skin, Prepaid Legal Services, as well as my company USANA are now traded publicly on Wall Street. For myself, I began my own network marketing company less than three months ago, and it has become a driving passion for me. While I do appreciate the FTC’s mission and the very valuable service it provides, I believe that the proposed rules need significant modification or they will do a great deal more harm than good. Perhaps a better approach would be to publish criteria which allow a consumer to better analyze a business opportunity and not be taken in by false claims. Thank you in advance for reviewing and posting my comments. Jane L Bueling