| Comment Number: | 522418-09402 |
| Received: | 7/14/2006 1:53:40 PM |
| Organization: | Gano Excell |
| Commenter: | Byron Jones |
| State: | NM |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I have been involved in a number of Network Marketing companies over the last 10 years and am currently an Independent Gano Excell Affiliate. I have read the proposed rule and am very concerned about the extremely restrictive and trade restraining language of the rule. Should these rules be implemented they will make it virtually impossible for me and thousands like me to continue as an Independent Gano Excell Affiliate. Protecting the public from ‘unfair or deceptive acts and practices’ is what the FTC is all about and I wholeheartedly support that goal but implementing rules for one single industry that severely restrict the ability of thousands of honest, hard working people to pursue a profession or part time business that they have chosen is completely outrageous. Net work Marketing has been around for many years and is a huge, vibrant and successful world wide industry. It has trade groups, trade magazines and thousands of education and training books and other literature, virtually all directed towards teaching and encouraging the people who wish to be part of it how to do so with honesty, integrity and professionalism. NO ONE IN NETWORK MARKETING IS SUCCESSFUL UNLESS THEY SIGN UP, ENCOURAGE AND TRAIN SUCCESSFUL PEOPLE WHO CAN THEN DO THE SAME. The whole industry is based upon that and it only works if three things are present. They are 1) a product that works and is competitively and fairly priced, 2) a good and fair pay plan and 3) a strong and honest company that is dedicated to keeping its product quality high and its distributors and customers happy. Because of these three things the industry is more self policing than almost any other because IT HAS TO BE. If any of the above three elements are not present or break down the company will self destruct very quickly. Every company involved in Network Marketing knows this and works very hard to insure that these three elements exist and continue to exist for when any one of them falter everyone looses. It is ridiculous tho think that any company, MLM or other would consciously engage in practice that will lead to or guarantee its demise. Why should network marketing companies be singled out to be forced to have extreme trade restaining rules when they are virtually no different than any other industry in the way they work. All products and services are sold by someone who gets paid for the effort. This is true throughout the entire economy and applies to every corporation, every small business and every sole proprietor. Consumers are always free to price shop, to say no to a situation they do not like. Virtually all MLM companies have return or buy back policies and programs or vehicles whereby a new distributor can resign or back out if they feel they have gotten involved with something they are not comfortable with. One of the most unfair sections of the proposed rule is the seven day waiting period. No other product or service in the country, except guns, requires a waiting period. Even refinance mortgages have only a 3 day right of rescission. If you feel you must place some sort of rule on the MLM industry in this arena implement a Right of Rescission Period whereby people have the right to back out and get their money or most of their money back for several days after entering into an agreement. This would, at least, remove the incredibly onerous paperwork and reporting element contemplated in your proposed rules and only require a contract change for all Network Marketing companies that do not already offer such a rescission period. Gano Excell already has a 90% buyback policy for 12 months. It includes all products and sales kits. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. Today, anyone or any company can be sued for almost anything. Having to provide information about a situation where you were found to have not committed any wrong or incurred any liability is unbelievably unfair and would make no sense unless it were required of every business in the country that sells a product or service. Providing information regarding situations where you were found to have been wrong is a different situation and probably should be made available to anyone who asks but they should have to ask. That way, again it would only require a contract change that added language that indicated that “a complete report of all lawsuits against the company where the company was found to be wrong or liable is available upon request”. Finally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser is extremely unfair and unneccessary. All of us in the industry are happy and anxious to provide information to prospective purchasers about others who have chosen to join our company or use our products but such information must be given out and handled very discretely and in conformance with the privacy rights of those whose names we chose to use. Almost all new affiliates are invited to attend a meeting and /or training session either before of shortly after becoming involved and are immediately introduced to other recent affiliates as well as some who have been involved for a longer time. In these days of identity theft, I am very uncomfortable giving out the personal information of individuals (without their approval) to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses including those of competitors. Obtaining such a list would be unbelievable time consuming and paperwork consuming and would be impossible to keep current. In order to get the list of the 10 prior purchasers, I and every other affiliate in the company would need to send the address of the prospective purchaser to my company and then wait for them to put such a list together (such a list would have to be different for each person, even those living just blocks apart and would be changing daily and sometimes hourly. The proposed rule would require a sentence like “If you buy a business opportunity from ______, your contact information will be disclosed to other buyers.” This would stop a huge majority of people from getting involved no matter how much they wanted to. It is unbelievably onerous and trade resticting to the industry. No other industry I know of has such a requirement. People are very concerned about their privacy and identity theft. They are very reluctant to share their personal information with anyone they may have never met. Furthermore, 80% of direct sellers are women. Have you considered that this rule may subject women to potential harassment or danger? As you can tell from my letter I appreciate the work the FTC does to protect consumers, but I believe this proposed new rule unfairly picks out and severely (and illegally) restricts the Constitutionally guaranteed right we all have to the Pursuit of Happiness. It is not only unfairly restrictive of one single industry but has many unintended consequences. As I have indicated in this letter, there are less burdensome alternatives available in achieving the goals of these new rules. Thank you for reading and considering my comments. Sincerely, Byron Jones