Comment Number: 522418-03205
Received: 6/18/2006 5:28:12 AM
Organization:
Commenter: Cannon
State: TX
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I am writing in regard to the Business Opportunity Rule,R511993. I have been in business with different direct selling companies for approximately 25 years. I have been with the present company since Nov. 2005. I was introduced to direct selling by a friend. It has helped to supplement the family income by giving us a little more for those unexpected things or to help make ends meet each month. Through direct sales, I have learned how to start up and manage a business, and how to train others. I have grown personally in the areas of self confidence, time management, computer skills, money mangement, creativity. Direct selling allows me flexibility, the extra income I need to pay off debt, and affords me the freedom to be able to have more time with my family and the important things in life. Direct selling allows me to have a business without a lot of overhead and having to pay employees, and I can work around my daily schedule and family activities. I believe the FTC is trying to do a good thing in protecting the consumer, including myself, from scams and fraudulent businesses. However, I feel R511993 directly impacts and unfairly targets legitimate direct selling businesses. Eliminating the $500 business threshold forces direct selling companies to comply with provisions of the proposed rule that are more appropriate for businesses requiring greater investment. Our company requires a very minimal start up financial investment up front, and we have a generous buyback policy which presents little to no risk to a person wanting to purchase product or start a business as compared to larger businesses and franchises. I believe that direct selling requires developing a repoire and a mutual trust between buyer and seller. Even we, the seller, can be taken advantage of by the buyer. There are many legitimate direct selling companies, like ourselves, that practice integrity, and honesty. The seven-day waiting period would bring about a lot of delay. When people come to us to purchase product or for the business opportunity, they are excited and want to start right away. Direct selling is a natural kind of business, in that you share as you go. If you did not have all the paper work the proposal is suggesting the prospective buyer have prior to the time of purchase, then it would be even longer than 7 days and difficult to follow-up. Once they sign up,then it takes another five days to get the product delivered. Timing is an essential part of any business, and when people are ready to purchase, a delay may discourage them and there may not be another opportunity. Life is very busy, and people want things simple and quick. Listing nearest references is impractical, and it brings about more delay and privacy issues. We don't always know where a person lives until we meet them, so we wouldn't know who the ten nearest purchasers are. We market to people all over the globe. The company would have to be contacted everytime someone wanted to purchase product, to get the data base. This would be very burdensome on legitimate direct selling businesses. The reference info could be given to sources that do not have a need-to-know, including competitors. It could increase the risk of identity theft. It would be easy for a fraudulent company to give a list of references who are involved in the fraudulent business. Companies that are fraudulent are going to try to cover up and give info and references that appear legitimate, thus not giving accurate data, while the legitimate business opportunity sellers will have difficulty meeting the proposed requirements. As far as cancellations and refunds are concerned, this could be misleading, because people sign up for various reasons, many of which are short term. These cancellations don't indicate the satisfaction of the average new puchaser. Thank you for the opportunity to comment.