| Comment Number: | 522418-03502 |
| Received: | 6/20/2006 12:25:59 PM |
| Organization: | Xango |
| Commenter: | David Goldman |
| State: | CA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Federal Trade Commission Office of the Secretary Washington DC RE: Business Opportunity Rule, R511993 Mr. Secretary, I am writing in regards to the proposed changes in the rules pertaining to the Direct Selling industry. As a consumer, I appreciate the commissions work in protecting the consumers but there are several components to the proposed changes that will have a devastating impact upon the industry. Though your purpose is to stop fraud and harmful schemes, by casting such a wide net you will cripple and eliminate a legitimate industry that provides incomes for millions of tax paying citizens. The seven day waiting period cast the industry in a very negative light. Many in our industry travel and this would create burdensome record keeping and administration problems and unnecessary delays. I talk with prospects from all areas of the country. I have spoken with people that live in rural communities. Finding the “10 nearest existing sales people” would, in many cases not only be impractical but virtually impossible. This one rule alone would prohibit many that see the opportunity from becoming involved and would prohibit opening new markets. Giving out personal information on distributors to any unknown entity raises the possibility of ID theft and liability for both the Corporate entity and the individual sales person the will be required to provide this information. In any start up business there is a high degree of failure. This is no different in the Direct Sales industry. Many people join this industry with false expectations. There are those that believe that by joining a Direct Sales company they will become instant Millionaires, over night successes. Once the realization that this is work and not the lottery, many will choose to quit rather that put in the necessary time and training that it takes to be successful in any endeavor. The responsibility to build any business lies with the individual and not the parent company or the Distributor that introduced them to the opportunity. Thus, the rule requiring the disclosure of the number of purchaser and the number of cancellations would be extremely misleading. If the purpose of this proposed rule is to put and end to misleading information, then this rule is at odds with the commissions stated goals. The current administration in Washington has made Tort reform a priority. This nation has seen the courts overburdened with frivolous lawsuits. This industry is not exempt. If you are in business it is not a matter of if you will be sued but when. The new rule does not provide for disclosure of the outcome even when said legal action is irrelevant to the opportunity or decided favorably for the distributor or company. I have been involved in this industry for over five years. I have always conducted myself with the utmost integrity and have aligned myself with companies that hold their distributors to the highest standards. I appreciate the commission intent of policing the industry and to eliminate fraud. I do not believe that the proposed changes, as written, will accomplish said goals. David Goldman Independent XanGo Distributor