|Received:||7/1/2006 8:09:40 AM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I'm encouraged that the FTC is getting focused on these schemes. We have been involved in one attempting to retail and, as our understanding of the business practices of the company has increased, it is very evident that the scheme is to sign up people to retail, have them discover how extremely difficult it is at the company's margins to make a profit, and turn them to recruiting as the only way to make money. We have been working with others to expose this scheme in a ways that will hold up under scrutiny. Please consider the following ideas for the FTC rules: 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. 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.