|Received:||7/11/2006 3:47:39 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:My son was recruited to become an independent business owner with Quixtar. The deal was present to him as a way to save a lot of money by buying things at a discount on the internet. AND if he got six friends to sign up, he would get a percentage of what THEY spent on the internet as well. He was told NOTHING about having to see if licensing is required in Iowa, NOTHING about needing a sales tax permint, NOTHING about having to pay income tax on his profits. The guy said it would be easy to get friends to sign up because it's such a good deal and his friends would thank him for it. (Although after my son signed up, and went along to observe a potential client sales pitch, the guy told him it was hard work to get someone to sign up) My son signed up for $150. He told me he'd joined a shopping club, but when he told me the guy who signed him up and he were meeting a friend of his to sign HIM up, I looked into things, and realized they'd NOT told my son a number of things. They also didn't say that he had 30 days to get out of the contract. (I sincerely hope that's true. I only found out it was possible when I called Quixtar's customer service 800 number - - there was nothing in the contract on their site to indicate that there was an opportunity to get out and get a refund) I found out most of the information on a pdf file of Quixtar's Rules and Regulations webpage, . My son was told all he had to do was sign up six friends and he only had to do that if he WANTED to. The rules and regulations said if he DIDN'T sign up at least one person every 6 months, Quixtar could drop him. It also mentioned additional fees that are waived when someone initially signs up, but that are charged at the time the person renews. The contract on the Quixtar website says renewal happens annually, but the person who contacted my son said it was a one time fee. I know that my son should have waited to sign up, should have taken time to read the contract and do a little research on the company, but even college kids can be too trusting, especially when it's a friend of theirs who's recommended him to this company. Almost as soon as he signed up, the pressure started to recruit friends and attend sales meetings. The more I read about the company, the more I urged my son to get out of it. It was not worth losing friends in order to make a little money, and from what I've seen on weblogs and discussion groups, that's often what's happened to Quixtar IBOs. When he called his mentor to say he was going to quit, the mentor said the things I'd read on the web weren't at all how the company worked. I woudln't doubt that he didn't know about the things I found on the Quixtar Rules and Administration page. Most young people seem to go by word of mouth instead of reading the fine print, and it's my guess that THAT guy was also new and desperate to sign up six people. My son was given a DVD of success stories and a very nice packet of information, but none of it mentioned what was involved in the "business" end of things - - it was all presented as an easy way to get discounts on the internet and earn extra money on the side. $150 isn't a lot for an adult to lose, but it's a lot to a college student.