Comment Number: 522418-05224
Received: 6/30/2006 3:20:22 AM
Organization:
Commenter: Anthony Saccaro
State: CA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Hello, I would like to place several comments about some of the proposed regulations regarding networking marketing activities and especially those that would affect my independent business powered by the Quixtar Corp. First, I am a financial advisor and have been involved with the Quixtar/Amway business model since 1999. It has been an absolutely blessing for me and my family. While I agree that there should be rules in place to identify fraudulant MLM type companies, I believe that the proposed regulations are too extreme...similar to the HIPAA laws. Not to get off subject, but HIPAA was designed to protect the privacy of an individual, not keep the doctors from disclosing urgent information to the family members of a patient who is in the hospital! And yet, in some cases, that is exactly what is happening! The rules are too extreme and causing unintended consequences as will these proposed regulations. I believe that these proposed regulations would harm my Independent Business in setting up unneccessary obstacles. Why should there be a waiting period for an IBO to register? It would make sense if the fee was a large amount and if there was no refund available. A new registrant can cancel anytime for a full refund. If anything, make it a policy that a registrant has sufficient time to cancel. This would accomplish the same thing as a waiting period without hurting legitimate companies that are not in it for the resistration fee. Regarding 10 references, this is a needless obstacle that doesn't accomplish anything. Again, if there was no refund available and a substantial risk involved, which there is none, what are the references for? What is the person going to learn by discussing the business model with ten different people? If everyone they talk with is positive, it doesn't mean they're going to do what it takes to make this business model work for them and vice versa. List all legal ALLEGATIONS? Anyone can make an allegation! I wonder how much business Wendy's restaurant lost when that lady (later convicted of lying about the incident) said that she found a finger in her food! Wouldn't it be more appropriate to publish statistics? How many IBOs have registered in the last ten years? how many complaints? How many complaints/IBO registered etc? Instead of listing allegations, why not require that the disclosures be made as to where the potential registrant can go to get accurate information (ie. FTCs website, BBB etc.)? This would also allow them to get positive information and not just negative. Finally, regarding income disclosures and substantiation for income claims, this is too regulated! If I get a $10,000 bonus check, I have to copy it and carry it in my wallet to show someone if I want to tell them I got it! What if one of my colleagues got that check, he has to give me a copy before I can tell someone he got a $10,000 bonus! On the other hand, I understand the FTCs position. You can't have people in an MLM promising a certain income that is beyond expectation. The FTC has already approved a legal document that is required to be given to new prospects that clearly informs them of the average income/IBO. If the FTC wants more than that, why not list the average annual incomes for each level (ie. Platinum, Ruby, Diamond etc.) While it is important to protect potential applicants from questionable MLM models, it is also important not to put all MLMs in one category. These proposed regulations would dramatically hurt my business. The MLM industry is already misunderstood enough as it is! The most unfair thing we could do to a potential candidate is to highlight all of the negative opinions (allegations) without being able to legally disclose what some of the high income earners are making (unless of course we happen to have all of their monthly bank statements handy). Thank You!