| Comment Number: | 522418-09363 |
| Received: | 7/14/2006 12:55:22 PM |
| Organization: | Brilliant Exchange |
| Commenter: | Tim Sales |
| State: | UT |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Dear Sir/Madam, I am writing in response to the proposed New Business Opportunity Rule R511993, if not modified, will be a significant impediment and burden to the network marketing industry. This new rule will significant burden our industry while in my opinion not truly helping the consumer. The specific items I am opposed to are: 1. The seven day waiting period to enroll new distributors. This in my opinion is disregarding the tiny start-up fee. The average start up fee is less than the cost of a dinner and a movie! Yet this rule would create a significant administrative burden to any company and distributor who would be required to document and follow-up on the process. I am opposed to a seven-day waiting period because it is an excessive administrative burden and an impediment to new business development. 2. The rule requires that any earnings claim statement made by the distributor or company to a prospect, whether written or oral, general or specific, be validated with a detailed “Earnings Claims Statement Required By Law.” Additionally, the distributor would be required to provide written substantiation of any earnings claim made upon request. I support the disclosure of an average earnings income statement because it is good business practices to establish realistic expectations. However, I oppose being forced to provide written substantiation because it is an excessive burden considering the investment of money to enter into the business is nominal. 3. The rule also calls for the release of any information regarding prior litigation and civil or criminal legal actions involving misrepresentation, or unfair or deceptive practices, even if you were found innocent. I support the disclosure of previous litigation of companies, executives, affiliated companies and the like involving fraud and misrepresentation only if the party is found guilty 4. Lastly, the rule requires the disclosure of a minimum of 10 purchasers closest to you. This rule, in my opinion must have been created by people who’ve never actually sold products to consumers. Firstly, imagine this being applied to Wal-Mart. Wouldn’t it be very difficult to administer? How about the violation of privacy of the satisfied customer? I as a consumer would not appreciate anyone giving out my phone number as a satisfied customer. Also, this would allow competing companies to get the list of customers and try to woe them away. And lastly, because of the Internet customers are rarely within a neighborhood or a specified geographical boundary. I have been involved in the network marketing industry for more than 16 years. I was formerly with the US Navy. Network marketing gave me a way to have the “American Dream” without a formal education. I did this by finding products that I got results with and sharing those products with customers. Then, I trained other people to help customers get results. Because of all those customers getting results – I have the American Dream. I understand and value the role of the FTC mission “to stand up for America’s free market process and for its consumers, who benefit from competitive markets in which truthful information flows.” However, I suggest putting the responsibility on the consumer to make good decisions instead of penalizing the productive people by making their administrative tasks overwhelming – this will cause more distributors to quit and fill up the unemployment lines. Thank you, in advance, for reviewing and posting my comments. Highest regards, Tim Sales