16 CFR Part 429, Rule Concerning Cooling-Off Period For Sales Made At Homes Or At Certain Other Locations, FTC File No. P087109 #563691-00038

Submission Number:
563691-00038
Commenter:
Robert FitzPatrick
Organization:
Pyramid Scheme Alert
State:
North Carolina
Initiative Name:
16 CFR Part 429, Rule Concerning Cooling-Off Period For Sales Made At Homes Or At Certain Other Locations, FTC File No. P087109

I serve as president of the non-profit, non-partisan consumer education organization, Pyramid Scheme Alert (PSA). This organization’s website is one of the most frequently visited resources for consumers worldwide regarding home-based businesses and direct selling income opportunities. We receive inquiries, complaints and pleas for help from consumers who are solicited by direct selling recruiters, some of whom are purveying fraudulent programs or other programs with extraordinarily complex compensation plans. It is our experience over 12 years since our organization was founded that the need for a cooling off rule has become more important than ever. The dollar figure should not be raised. Raising the dollar threshold will only exempt many companies from the rule. This is counter to the need of concerns. Inflation formulas are irrelevant and rendered meaningless in the face of these often sophisticated solicitations. The initial payment is, in all cases, only a first step toward further solicitations, financial requirements, and other costs that a consumer is likely to incur upon initially paying. Further payments that the consumer may b e subjected to after signing the initial sales contract may include monthly inventory purchase requirements, fee-paid seminars, marketing tools, travel costs, or purchases of sales leads. In addition to the increasing dollar investments associated with direct selling and similar home-based businesses, the number of such solicitations a consumer is likely to encounter has increased significantly. The nature of these income solicitation can affect months or years of a consumer’s life. I urge the FTC to maintain the current dollar figure in the cooling off rule in recognition of the great need of consumer for adequate time to evaluate these ubiquitous and sometimes fraudulent solicitations.