| Comment Number: | 522418-02562 |
| Received: | 6/16/2006 9:50:51 AM |
| Organization: | Supreme Financial Services, Inc |
| Commenter: | Arlen Baumhoefner |
| State: | MN |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Gentlemen: Business Opportunity Rule R511993 obviously has many worthy intentions behind its proposed rule making process. We have been in the networking industry for over 30 years. We initially joined at a meeting a friend invited us to attend. We joined that night, received products and training that night and never looked back. It is a business model that works. We have developed many successful streams of income with the three compatible product lines of health care and nutritious products. We have never had any problems with fraud nor refunds. We are very concerned that your proposed rule making would infact badly damage the direct sales system that has a proven track record of success. We know your intentions to prevent fraud and deceit are worth the effort because so many innocent people are injured. But they are not injuried by a successful direct sales model. This rule incorrectly targets respectible and legitimate direct sales organizations. Let us address five (5) specific areas of concern. First is the proposed elimination of the $500 threshold. We believe that the $500 level has proven to be successful. If the level needs to be moved, perhaps $300 or $295 would be a good level. Second is the proposed Litigation Reporting. So many of us become involved in litigation that this rule should be changed to allow results of winning or losing. In addition, it is unclear if all litigation, personal, professional, and public are to be listed. Perhaps a good guide for this effort to disclose bad people is to use the model that most states professional licensing units use which is primarily felony convictions and any action directly stemming from the practice of the profession. Third area of concern is the Earnings Claim. We agree that this is indeed a pit of quick sand. We agree that some type of limits need to be put on this often timed abused element but the form it is currently in requires difficult data collection and we don't believe that the fraudulent would comply anyway. Please readdress this area and make it not only manageable but accurate. We have never had to recruit anyone by projecting income. We merely show them our long track record of slow and continuous sales and income. Fourth area is the references. References are good however it is nearly impossible to find the 10 nearest sales people because we may never have met them. Most direct sales organizations are far flung and due to privacy concerns, we seldom or never reveal their names or addresses. They are welcome to come to our meetings and meet these people but we would NEVER share those names for fear of privacy law violations. The references we share are with the permission of the people involved and then only when we know the people are truly interested and are not sexual predators. Last but not least is the Seven Day Waiting period after the person receives all the necessary information. This flies in the face of almost all other waiting periods. The normal is Three Days and in fact on the purchase of a home there is no rescission period. We believe that a three day right of rescission would be reasonable and would therefore not cast a light of unusualness on the direct sales industry. We again want to state that we appreciate your efforts to limit fraud in all sales transactions including the direct sales industry. W.C. Fields probably said it best that there is a sucker born every minute - and for some reason no one has ever been successful in legislating morals and ethics. However a level playing field is greatly appreciated. Dr. A. H. Baumhoefner