| Comment Number: | 522418-05848 |
| Received: | 7/3/2006 9:02:30 PM |
| Organization: | |
| Commenter: | Gavin Quill |
| State: | IA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Dear Sirs: After having been burned by two different MLM companies (Herbalife and EcoQuest) I began an intensive study of MLM abuses, reading many books and studying dozens of models. I am convinced that most if not all of these companies are fundamentally fraudulent and deceptive at their core, and that they prey on some of the most vulnerable members of our society. Therefore I am asking that you consider the following minimual regulatory requirements to help curb these abuses: 1. All multi-level marketing companies must comply with earnings-claims disclosure rules. No multi-level marketing company should be given an option of making "no earnings claims". 2. Multi-level marketing companies must disclose the average retail-based income earned by participants in each level of the hierarchy. 3. Income disclosures of multi-level marketing companies must include: -- The total number of all participants who joined in the past year, not just the so-called "active participants" in one part of a year. -- The average NET, not gross, income of participants in each level. Average net income is the average of all monies received from the company by participants minus the average of all moneys paid to the company by participants in each level. Expenditures paid to the company include product purchases, renewal fees, shipping costs, books, audio and video tapes, training and motivation seminars, computer fees, etc.