| Comment Number: | 522418-12585 |
| Received: | 7/17/2006 11:02:29 PM |
| Organization: | Consumer Awareness Institute and Pyramid Scheme Alert |
| Commenter: | JON TAYLOR |
| State: | UT |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| Attachment: | 522418-12585.pdf Download Adobe Reader |
Comments:
ATTN: FTC personnel – One of the biggest challenges with the proposed business disclosure rule is the problem of definitions, especially “pyramid marketing schemes.” I spent many years on this topic, consulting with top experts and doing comparative analysis to identify the features that clearly separate exploitive pyramid schemes from legitimate business opportunities. “The 5 Red Flags” clearly accomplish that. Extensive analysis of disclosures (as available), financial reports, and court records revealed that when these 5 Red Flags were in a compensation plan, the loss rate was 99%, and often close to 99.9%! The attached report prepared for the National White Collar Crime Center and for my consumer awareness web site (www.mlm-thetruth.com) clarifies the issues and helps evaluating MLM programs with potentially high loss rates. The need for disclosure is discussed on page 25. I also formally request a hearing or forum pursuant to Secti0n 18© of the Federal Trade Commission Act and Section F of the April 12, 2006 Notice of Proposed Rulemaking. I would be prepared to testify regarding the matters discussed in the “5 Red Flags” report, as well as the submittal I sent earlier (tracking number 522418-12262). - Jon M. Taylor, Ph.D., President, Consumer Awareness Institute and Advisor, Pyramid Scheme Alert, Web site for MLM research and guides