| Comment Number: | 522418-05868 |
| Received: | 7/3/2006 11:56:34 PM |
| Organization: | XanGo L.L.C. www.xanguy.com |
| Commenter: | Rick Parmelee |
| State: | OH |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| Attachment: | 522418-05868.pdf Download Adobe Reader |
Comments:
I am concerned about the proposed Business Opportunity Rule R511993. In its presented form, it will prevent me from continuing my very successful small business. I am a successful sole proprietor working with several good public and private Network Marketing companies over the past fifteen years. I started my business because it is proven, that the word of mouth marketing business model works. I am able to earn additional income to provide my children with higher education and a better life style. I make a difference in my community, and help others do the same. I work from home without expensive start- up costs and red tape. My wife is able to stay home to care for our children. Now my family depends on this extra income to supplement our budget. Please don’t destroy my small business we need it! There is no other business model that offers me these opportunities. I suggest we educate the public like www.mlmwatchdog.com to prevent rip-offs by crooks as an alternative to more rules. Rules are made only for those that break them. These proposals, if enacted, will negatively affect good honest business for American Families today. Seven day waiting period. People buy TVs, cars, and other items that cost much more than my products and opportunity, and they don’t have to wait 7 days. This waiting period will certainly inconvenience and “chill” enthusiastic individuals anxious to participate with my business opportunity. It will create an air of suspicion among prospects when told that the FTC requires such a waiting period. It will create a costly inconvenience for me because I recruit on the road. It will require gathering contact information and following up seven days later, assuming that all the disclosures were given at the time of the meeting. My company requires a very minimal up-front financial investment, and has a generous buyback policy which presents little or no risk to a prospective purchaser. List of nearest references. I will have to contact my company, which will have to maintain a special database, to access the information required by this disclosure. This requirement is overly burdensome and evokes confidentiality and privacy concerns for all involved. Logistically speaking, because you don’t know where a prospective purchaser lives before meeting him, it will be difficult to have this information available to disclose until a later time. This will further prolong the seven day waiting period. The reference information could then be used for any purpose. The required disclosure of this information will certainly discourage participation in the direct selling industry and will not be a significant deterrent to fraud businesses. It would be very easy for a fraudulent company to provide a list of “references” who are involved in the fraudulent business, but very burdensome on legitimate direct selling businesses. I am glad to provide references, but in this day of identity theft, I am very uncomfortable giving out the personal information of individuals, including mine, to strangers. Women in my organization may be subject to sexual or racial harassment so this part can’t go in at all, unless the FTC passes an addition to this rule prohibiting sexual or racial attacks related to this disclosure. In the end the rule must bind the FTC to take direct enforcement action on sexual and racial attacks with a special unit assigned to monitor actions related to the disclosure forms. Earnings claim statement. While my company strongly supports the proposition that earnings claims made by business opportunity sellers should be substantiated, this requirement will not deter fraud. A fraudulent company will not provide accurate data, while legitimate business opportunity sellers will have difficulty in meeting the proposed requirements. Legal actions. This rule will require disclosure of litigation potentially unrelated to the business opportunity transaction. It does not provide for disclosure of the outcome of the litigation. Thus, litigation that was favorably resolved for a distributor, or is otherwise irrelevant to the recipient of the disclosures, would still need to be provided. Cancellations and refunds. Disclosure to prospects will be misleading due to the fact that distributors often join to achieve specific, short term objectives, leading to a high cancellation ratio that is not representative of the satisfaction of the average new purchaser. I have been approached by many crooks because of my success. This rule will do nothing to stop them. The crooks are hurting my business! This rule will not stop Crooks – they violate the current rules all the time. I am a good American citizen and this rule will hurt me. Thank you and please help me.