|Received:||7/17/2006 12:26:25 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I complement you on your efforts to save our citizens from fraudulent pyramid schemes and unethical business people who take advantage of people wanting to chase the American Dream of owning a business. It is a great dream that is a part of our country's history that makes it a great place to live. However, having been in the Direct Selling industry for 9 years now, I see that certain details of this proposed rule will significantly damage legitimate business opportunities in America, while fraudulent businesses will commit more fraud and survive. My background is in Insurance and Financial Planning. My first experience with this industry was 9 years ago. Unfortunately the company I chose went bankrupt, but I fell in love with the network marketing business model and began looking for other companies to make a home with. Two years ago I finally found a company I loved and now devote my full time efforts to it and that is Xango. I have since quit my Insurance and Financial Planning business and have become very successful with Xango. I have gained a lot of business skills since coming to Xango and am teaching them to many people around the United States and several foreign countries. They too are very excited about this opportunity to own their own business and share a product that may increase people's health. The Direct Selling and Multi-Level Marketing companies are wonderful companies that allow people with passion, work ethic, and a willingness to grow to develop a business whereby, with low capital entry, they can develop a lifestyle of time and money by helping and educating people about useful products and services. Most of these companies are ethical in their business philosophy and this proposed rule will negatively affect their ability to help people. The seven day waiting period will put a damper on anyone wanting to get started. When I made up my mind to get started in Xango, I wanted to get started right then. I wanted the product right away. This waiting period will certainly inconvenience and "chill" enthusiastic individuals anxious to participate and get going. It will create an air of suspicion among prospective purchasers when told that the FTC requires such a waiting period. This waiting period will also create tremendous inconvenience for those distributors who recruit on the road like myself. This waiting period suggests a level of risk that simply doesn't exist for Xango and many other direct selling companies. Most companies require a very minimal up-front financial investment, and have a generous buyback policy which represents little or no risk to a prospective purchaser. The list of nearest references would be overly burdensome and evokes confidentiality and privacy concerns for all involved. Logistically speaking, because you don't know where a prospective purchases lives before meeting him, it will be difficult to have this information available to disclose until a later time. From a privacy perspective, this would discourage participation in this industry and will not be a deterrent to fraud businesses. It would only make it difficult for legitimate direct selling businesses. I agree that earnings claims by business opportunity sellers should be substantiated, but this requirement will not defer fraud. A fraudulent company will not provide accurate data, while legitimate sellers will have difficulty in meeting the proposed requirements. It is very difficult to keep fraudulent schemes from getting started. But that is true in any industry. They eventually go away after hurting a lot of people. This is a concern in every industry. However, the rules you are proposing would hurt people like myself who have found legitimate companies to be true entrepreneurs and not have to rely on corporate America which as you know has its own problems. I appreciate your efforts to protect our customers and citizens and I understand that this industry is very difficult to regulate because so much of this industry is a mental process and is only seen in the interaction between individuals. I hope that you see how these changes would have drastic effects on legitimate businesses that you hope to protect. Direct Sales originated from the “old fashioned” way of doing business. In today’s high technology world, it is refreshing to see business focusing on the growth and development of people. I know you can find ways to effectively regulate this industry so that the legitimate businesses are not hurt, while fraudulent schemes are caught and stopped much quicker. Let us have our freedom and dreams of owning our own business as we know it today.