| Comment Number: | 522418-05811 |
| Received: | 7/3/2006 5:17:23 PM |
| Organization: | Quixtar.com |
| Commenter: | Ray Beeman |
| State: | CA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Lois (my wife) and I have been a part of Quixtar.com for all 7 years, and in the industry since 1987. We feel that it is a very good idea to regulate this industry, to weed out the obvious scams, and we applaud that effort. However, the rules suggested would hurt the best companies the most, in our opinion. For example, to "list all legal allegations..." is something we wouldn't even know how to do; and, the companies with the most history would obviously have the most legal action! (Think about Walmart and its suit every other hour.) Regarding the requirement to provide substantiation for every income claim, I certainly don't want to bother 10 other people with the burden of spending time with those who are skeptical enough to not believe the marketing plan that you, the FTC, have already approved for the company which set the standard for the industry in 1959, and that has always been the benchmark for others to follow. The 7-day waiting period is unnecessary for this company, as they have a money-back policy that I've seen active even beyond 30 days! We feel that to enforce a 30-day "buyer's remorse" policy would serve the public better. We always try to get prospects around as many other people as we can - more than 10 - but that need not be tied to a 7-day wait. So-called "driver" personalities do not want to wait for anything, and "amiables" will analyze any proposal for much longer than 7 days, so such a wait would only hurt the ones who are best at getting results (and thus helping others). We feel that it is critical to make sure that the marketing plan does not allow for bonuses (or whatever term they might use) to those who sign up others - that the only way to make money is by moving a product or a service; this would seem to be an obvious "pyramid" feature. Also, it would be good to have the companies be able to prove that their product line really does what it claims to do, or be able to provide the prospect with a web site that will give full disclosures regarding the product line (e.g., the Nutrilite.com site, the BLI.com site, even the watchdog consumerlab.com site that ranks our products). How about providing profiles of the owners, and proving their credibility? What is the financial condition of the company? Are they advertising a "ground floor opportunity"? What does the investment include, and what will their monthly requirement be? Are there "gotchas" that will take their group, or nullify their bonuses? Can you buy an entry level (bad) or is it the same for all (good)? Who is accountable for maintaining the opportunity (a board, the owners, or, best yet, the distributors)? What is the training system like, and how expensive? Will new people have a line of mentors? Are there limits to how many you can, or must, sponsor? Is my business inheritable? These and many other questions like them are actually more demanding of a new company to disclose, and we would be happy to provide a more complete list. To summarize our 20-year experience, I will repeat that the idea to protect the public from the scam artists is a good idea, and there are some good ways to do that, including the list above. Obviously, we are "prejudiced" in favor of our business model but we feel that it is proper to be so, since the numbers don't lie, and the products are legally and demonstrably as good as the claims. Good luck on your efforts to regulate the phoney businesses out, and in encouraging the good ones. We really do need some quality competition! Respectfully, Ray & Lois Beeman