Comment Number: 522418-06192
Received: 7/5/2006 5:03:51 PM
Organization:
Commenter: T Catanzaro
State: OH
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I have been involved in the Network Marketing field for almost 3 years, and have a few suggestions in regards to the proposed rule change. I greatly appreciate what the FTC is trying to accomplish with eliminating scams, which can hinder the reputation of our industry. However a few of the provisions would greatly hinder how I legally and ethically run my Network Marketing business. As for the 7 day waiting period, I do not agree with this. I think the FTC should eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. When I was offered a job from my current employer, I did not have to wait 7 days to accept. When I decided to enroll in a Martial Art class, I did not have to wait 7 days. This rule is absolutely Not necessary. I do not even understand why it was proposed. I also do not agree with the provision to require 10 references of other IBOs. This infringes on the privacy of those IBOs. It also opens the door for prospects to jump ship and register with one of the refered IBO's perhaps because of a perceived higher level of success or time in the business. There are plenty of opportunities for new prospects to talk to local IBOs at the Open Meetings. This is also not a requirement for other companies, and organizations. As for the disclosure of past litigations, I disagree. Any individual can make a complaint or file a lawsuit. It has nothing to do with my business. Quixtar is in good standing with the BBB, any prospect can easily find that information. A list of all lawsuits for the past 10 years, is irrelevant to the success of that new prospect. Once again, my current employer, nor my college, nor any organization I've ever joined have ever been required to disclose past litigations. Disclosure for income claims: If disclosures are needed, require a simple, standard, easily understood disclosure such as average monthly gross income for 'active' IBOs, and at each level. Quixtar has literature that shows what the average Platinum or Emerald makes. This should be used. As for substantiation of Income claims. If an IBO quotes an income of himself, or of a higher level IBO, they should be able to substantiate it with a copy of a check. This would remove all instances where an IBO quotes an income on pure speculation. If a copy of a check is provided from an upline mentor, any IBO should be able to show that as substanitation to the prospect, along with the averages I mentioned before. Now, there is one provision I would like to see added. Income is not only derived from the sale of products, but at higher levels there is also potential income from training and business support materials. I am not refuting the legitamacy of such profits, just that they be disclosed to all IBO's. Profit from the Training and Support System IS disclosed to prospects at All opportunity seminars. But I believe that once a prospect has registered and is now a business owner, he/she should be provided with a written Compensation Plan on how the income is derived. This is currently not the case until an IBO reaches the Platinum level. I would like to see a provision added that profit from the Training and Support system must be explained with a comp plan to all IBO's. I have enjoyed my 3 years in the business. It has greatly benefited my life, and I have learned a lot. There are many skeptics and critics, and I hope there concerns are heard. But I hope you do not impose unnecessary rules on honest and eithical business such as Quixtar, Mary Kay, Burnlounge, Pampered Chef, etc. Thank you for your time and consideration, -Tony Catanzaro