|Received:||7/4/2006 12:21:26 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:To Whom It May Concern: Regarding the proposed rules, my name is Justin Scarborough, and I’ve been affiliated with the Quixtar opportunity since July 2002. Prior to, during and since becoming involved, my sponsor shared more than a sufficient amount of information to help me make an informed decision. Furthermore, information available on the Quixtar website allowed me to validate income claims, expectancy of effort, and overall legality and integrity of the business. When sponsoring others, I make the same effort to help people understand the work involved and point them to the references on the website so that they too can make informed decisions about what is best for them. I make no guarantees about their income except to make my best effort in helping them reach their goals, and encourage them to meet and evaluate the team of affiliates (Independent Business Owners--IBOs) I work with (Britt World Wide) before joining. The proposed rules are an excellent effort to eliminate fraud and protect prospects from dishonest people within the direct selling/business opportunity industry. However, the difficulties I faced when first being exposed to Quixtar and the continual problem I have when exposing the Quixtar opportunity to new prospects is not insufficient disclosure of information, but rather insufficient education among the general public about what constitutes a genuine opportunity. If we look at the argument that fraudulent companies or individuals are likely not complying with current FTC standards, does imposing further regulation on compliant business help protect prospects/clients? Furthermore, if prospects are uneducated about what questions to ask of the opportunities they are exposed to--or what the FTC regulations are for that matter--before becoming financially involved, how can further regulation guarantee protection? Is there another avenue to assist a prospect (from FTC perspective) in avoiding a scam? Could questions asked by the FTC of companies, such as Quixtar, when determining legality be made more visible to serve as a guideline for Joe Prospect evaluating a company? I would suggest more work in this area rather—public education—rather than further regulation, though the organization I’m a part of already follows many of the proposed guidelines. Has the FTC made an effort to distribute information to high schools, colleges or consumer advocacy groups? On the proposed rules, it is reasonable that any regulation should include standardized income disclosure (such as “average income of affliates”) and a reasonable cancellation policy. A waiting period would make sense only if there were no refund policy, though the typical prospect I meet with will take a week or more before becoming an IBO. Requiring references of other IBOs would infringe on the privacy of those whose names were provided, and would give prospect contact information to competing IBOs, who might unethically sponsor the prospect themselves. Currently, our organization holds weekly meetings for training and exposing new people to the business concept so that they can meet other IBOs in the area. Whether it resolves a legitimate problem or not, litigation is considered negative by Joe Prospect or anyone who has never been in business before. Is there such thing as a prosperous company without a lawsuit against it? Does providing a list of lawsuits against a company assist in determining its legitimacy? How does Joe Prospect separate real concerns from frivolous suits? Does increased disclosure help good companies to eliminate dishonest individuals? IBOs should possess substantiation for any personal income claim but should not be required to disclose it except when required by the FTC and similar state agencies in an agency investigation. What becomes of the newer IBO who, in making an honest effort, fails to disclose any of the required paperwork and an opportunistic person brings a lawsuit against him or her?