|Received:||6/30/2006 6:44:36 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:Dear Sirs and Madams, I was greatly relieved to learn that there is consideration of regulation pending regarding multi-level marketing (MLM) and pyramid structured companies. MLM business involvements can be very devastating to a family or individual. Full disclosure of their income averages and expenses will help prospective participants to understand the risks inherent with these types of companies. Please make certain that any regulation of Multi Level Marketing companies includes the following requirements: 1. All multi-level marketing companies must comply with earnings-claims disclosure rules. No multi-level marketing company should be given an option of making "no earnings claims". 2. Multi-level marketing companies must disclose the average retail-based income earned by participants in each level of the hierarchy. 3. Income disclosures of multi-level marketing companies must include: -- The total number of all participants who joined in the past year, not just the so-called "active participants" in one part of a year. -- The average NET, not gross, income of participants in each level. Average net income is the average of all monies received from the company by participants minus the average of all moneys paid to the company by participants in each level. Expenditures paid to the company include product purchases, renewal fees, shipping costs, books, audio and video tapes, training and motivation seminars, computer fees, etc. These recommendations would curb the massive deception about "unlimited income." They would expose MLMs that are based on pyramid recruiting not retail selling. Such recruitment scams are only disguised as "direct selling" businesses. And they would expose the deceptions of "average income" that exclude business costs and other fees that the schemes get from recruits. When these COSTS are added, more than 99% of all MLM recruits lose money!