Business Opportunity Rule #522418-10990

Submission Number:
Laura Minnich
Initiative Name:
Business Opportunity Rule
I am so for all of what you are trying to put through. We got suckered into joining Quixtar from my Aunt. We are not renuing our contract with them and it does expire this month. But, as we still are technically with them we did receive information from them and they went ahead and told us the 5 problems they saw, and then suggested how we comment on them. I DO NOT agree with them on the following problems. I think the following SHOULD be enforced. Quixtar is NOT a legit company, it IS a pyramid scam like so many are. They DO NOT agree with full disclosure. I feel in addition to this standard you are trying to put through, you should add tougher standards so as to really prevent people from getting suckered. We got involved, like I said, from my Aunt and went based on her reputation. Then after being in it she would call and encourage us to sign up other people and give us ways to be deceptive. She would say that it is no one's business how much money you make and she previously owned her own gift shop and I quote "I tell people that I make more now than when I owned my own shop...which I technically do because I didn't give myself a paycheck everymonth of ANY amount." To me that is deceptive...she was saying that even if she got a check for less than $100 a month she would project that she made more than when she owned a business. That gives off a deceptive impression. And really, that is what most of these business' seem to be based on...impressions and perceptions. Here is what Quixtar gave as information: Problem 1: Prospects would have to wait seven days after receiving disclosures before they could register. Solution: Eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. Problem 2: You would be required to give every prospect a list of "references" -- the names, addresses, and phone numbers of 10 other IBOs in the area -- seven days before the prospect registers. This requirement would infringe on the privacy of every IBO whose name, address, and phone number was provided to prospects. It would also penalize the sponsor, who would be required to give his prospect contact information for 10 other IBOs, any of whom might be happy to register the prospect themselves. Solution: Eliminate the requirement to provide 10 references. Problem 3: You would have to give every prospect a list of all lawsuits, arbitrations, and other legal claims for the past 10 years involving Quixtar and its IBOs where the plaintiff alleged fraud, misrepresentation, or unfair trade practices -- regardless of whether or not the accusation was true. Among other problems, this requirement would open up Quixtar and other legitimate companies to false accusations. Meanwhile, dishonest companies would simply ignore the rule. Solution: Eliminate the requirement to disclose past litigation. Problem 4: You would have to make a different disclosure for every income claim.This would include any examples you might use during an opportunity presentation to illustrate how the Plan works. Solution: If disclosures are needed, require a simple, standard, easily understood disclosure such as "average monthly gross income for 'active' IBOs." Problem 5: You would be required to provide prospects with personal financial documents to back up ("substantiate") any income claim. Solution: IBOs should possess substantiation for any claim but should not be required to disclose it except when required by the FTC and similar state agencies in an agency investigation.