Business Opportunity Rule #522418-11200

Submission Number:
Errol Nicholson
Initiative Name:
Business Opportunity Rule
To FTC Prospects would have to wait seven days after receiving disclosures before they could register. Eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. 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. Eliminate the requirement to provide 10 references. 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. Eliminate the requirement to disclose past litigation. 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. If disclosures are needed, require a simple, standard, easily understood disclosure such as "average monthly gross income for 'active' IBO You would be required to provide prospects with personal financial documents to back up ("substantiate") any income claim. 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. Again, we believe that providing every prospect with important information about prior experiences is good for Quixtar and the entire direct selling industry. However, there are less burdensome ways to accomplish that goal than the manner set forth in the proposed FTC rule. While we certainly encourage you to discuss the burden raised by the problems listed above, we hope that you also express your support for the general objective. Thanks Errol Nicholoson