| Comment Number: | 522418-06890 |
| Received: | 7/7/2006 9:16:29 PM |
| Organization: | Quixtar |
| Commenter: | Doug Hall |
| State: | ID |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I am writing in concerns with the proposed business rules directly affecting direct seller businesses. Here are some of my top concerns and what I think would be satisfying solution. Problem 1: Prospects would have to wait seven days after receiving disclosures before they could register. While there is an evident problem with certain businesses that sole rely on a hyped up person to increase signings, most legitimate businesses offer a full money back guarantee, Quixtar being one Solution: Eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. Possible instead require a money back guarantee period. Problem 2: You would be required to give every prospect a list of "references" – the names, addresses, and phone numbers of 10 other IBOs in the area – seven days before the prospect registers. This requirement would infringe on the privacy of every IBO whose name, address, and phone number was provided to prospects. It would also penalize the sponsor, who would be required to give his prospect contact information for 10 other IBOs, any of whom might be happy to register the prospect themselves. Naming your competition as an alternate is completely contradictory to any business sense Solution: Eliminate the requirement to provide 10 references and instead require that if inquired about acknowledgement of other IBO be given. Problem 3: You would have to give every prospect a list of all lawsuits, arbitrations, and other legal claims for the past 10 years involving Quixtar and its IBOs where the plaintiff alleged fraud, misrepresentation, or unfair trade practices – regardless of whether or not the accusation was true. Among other problems, this requirement would open up Quixtar and other legitimate companies to false accusations. Meanwhile, dishonest companies would simply ignore the rule. Solution: Instead of requiring a list to be given to prospect, require instead a simple notation and reference of a public resource where that information can be found. Problem 4: You would have to make a different disclosure for every income claim. This would include any examples you might use during an opportunity presentation to illustrate how the Plan works. Solution: If disclosures are needed, require a simple, standard, easily understood disclosure such as "average monthly gross income for 'active' IBOs. Which Quixtar already provides Problem 5: You would be required to provide prospects with personal financial documents to back up ("substantiate") any income claim. If it dose not work, they will find out, this would fall into reference of problem # 1 and they should get their money back. Solution: IBOs should possess substantiation for any claim but should not be required to disclose it except when required by the FTC and similar state agencies in an agency investigation. In addition I ask the commission to be wise in their decision, not letting the frivolous and fraudulent out weigh the honest and legitimate; and as always remember the business freedom is what America was grown on, and thrives on, and that among many other inherent desirable qualities is what makes America a great nation of states in the world.