Comment Number: 522418-11716
Received: 7/17/2006 2:43:41 PM
Organization: XanGo
Commenter: Brenda Willoughby
State: MO
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Thank for you for your efforts to protect our country from fraudulent companies that can harm people. In considering your proposed ruling my husband and I have great concern. My husband and I have been in network marketing for over 15 years. We have contributed to the economy and helped thousands of people start and earn money using network marketing. Although there are fraudulent companies out there, there are also fradulent people in all areas of business. Many of the items in this new ruling seem to be targeted to network marketing or direct selling. This could have a definite negative impact upon our business and industry. We just purchased a $300,000 home and did not have to wait 7 days. The ruling states that there would be a 7 day waiting period before entering our business. Our company only charges $35 to invest in the distributorship. The product purchased is fully refundable. A $35 investment that commisions are not paid on is not a serious enough financial investment to warrant a 7 day waiting period. To provide names and contact information of other distributors can be overly burdensome and could disclose confidential information on other people for our competition. This would force the company to provide complete listings of all distributors everywhere in the nation. No other business is required to disclose all of its customers to anyone who askes. These excessive disclosures can cause a new prospective distributor to be overly concerned about us or our company. Fraudulent companies I have been exposed to will still report fraudulent income. The companies that are ethical and honest will bear the cumbersome burden of making sure that they have complied with this extensive data requirement. This will be time consuming and costly for the honest companies. This could cause our business to come to a halt. We try to always maintain integrity in our business and in our explanations of our compensation plan. We have seen companies not do this, but I do not believe that this ruling will not deter that activity. I feel that as true ethical companies become stronger that people will gravitate to the better companies and the unethical will fall. To be burdened with undue waiting and disclosures will be very time consuming and costly for us and our distributors. New people will not be able to start easily without a lot of extra training on cumbersome paperwork and data gathering. This will cause frustration and anxiety within our business and industry. This will greatly effect our growth and ability to maintain our business. The cancellation disclosure again causes undue paperwork and in could be deceptive in itself since so many people only buy the distributorship to gain the lower cost for themselves and a few close friends. Since they do not really work the business with any effort they are not a realistic picture of someone that is dissatisfied with the business, but maybe only used the product for a short period of time. Again a fraudulent company can distort this number for their own gain. Disclosure of legal action is not really helpful since anyone can sue you for anything. Someone filing legal action against you does not mean it is justified or that the final ruling was against you. Again it does not stop the fraudulent companies. Please reconsider the harmful effect this ruling can have on our business and many others alike that are building something of value for ourselves others and contributing back to this great country. I am convinced that as great companies that are ethical emerge that they will overshadow the fraudulent ones. Just as in every other industry and business form in America. There are now many self governing groups that are emerging to help to deter the bad behavior of a few without penalizing the whole. Thank you for your consideration. Brenda & Andy Willoughby