| Comment Number: | 522418-06074 |
| Received: | 7/5/2006 10:35:35 AM |
| Organization: | |
| Commenter: | Frank Clark |
| State: | NY |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I am writing to formally state my support for the adoption of rules that require MLMs to make FULL DISCLOSURE. I am currently involved with an MLM company, and have been for over three years now... I still support this new adoption. (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: (A) 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. (B) 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. These recommendations would curb the massive deception about unlimited income. They would expose MLMs that are based on pyramid recruiting not retail selling. Such recruitment scams are only disguised as "direct selling" businesses. And they would expose the deceptions of average income that exclude business costs and other fees that the schemes get from recruits. When these COSTS are added, more than 99% of all MLM recruits lose money! The reason that I support the above points is because my wife and i would not have gotten involved with the company that i am currently involved in had these measures been put into place. Which would have saved us a lot of heart-ache and grief... this business model has put a tremendous strain on our family.