| Comment Number: | 522418-10029 |
| Received: | 7/15/2006 4:08:55 PM |
| Organization: | Xango, LLC |
| Commenter: | Karen Young |
| State: | OH |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Gentlemen: I am concerned about the proposed Business Opportunity Rule R511993. In its presented form, it will prevent me from continuing my very successful small business. I have been a sole proprietor independent distributor / associate with several good companies that use Network Marketing (word of mouth marketing) for more than twenty years. I started my Network Marketing business because I loved the products and services that were offered, wanted to share the product with others, while earning some additional money, work from home, without expensive start- up costs, and enable and supplement my budget. I am in my early sixties and I feel that there is no other business model that offers me these opportunities. I feel that some of the sections in the proposed rule would make it difficult or almost impossible for me to continue with my small business. 1. Seven day waiting period. This waiting period will certainly inconvenience and “chill” enthusiastic individuals anxious to participate in with my business opportunity. It will also create an air of suspicion among prospective purchasers when told that the FTC requires such a waiting period. Since I am usually working in a one to one situation and often inan out of town location. This waiting period will also create tremendous inconvenience for me because I am recruiting on the road . 2. List of nearest references. I will have to contact my company, which will have to maintain a special database, to access the information required by this disclosure. This requirement is overly burdensome and evokes confidentiality and privacy concerns for all involved. Logistically speaking, because you don’t know where a prospective purchaser lives before meeting him, it will be difficult to have this information available to disclose until a later time. This will further prolong the seven-day waiting period. From a privacy perspective, all distributors will have to agree to have their names, addresses and telephone numbers disclosed to prospective purchasers for possible contacting. 3. 3. Earnings claim statement. While my company strongly supports the proposition that earnings claims made by business opportunity sellers should be substantiated, this requirement will not deter fraud. A fraudulent company will not provide accurate data, while legitimate business opportunity sellers will have difficulty in meeting the proposed requirements. 4. Legal actions. Not only would this rule require disclosure of litigation potentially unrelated to the business opportunity transaction, but also it doesn’t provide for disclosure of the outcome of the litigation. Thus, litigation that was favorably resolved for the distributor, or is otherwise irrelevant to the recipient of the disclosures, would still need to be provided. At the very least this requirement should be modified to take into account these problematic elements. 5. Cancellations and refunds. While my company would have to maintain and update this database for its distributors, its disclosure can be misleading due to the fact that distributors often join to achieve specific, short term objectives, leading to a high cancellation ratio that is not representative of the satisfaction of the average new purchaser. I have seen many scams on the Internet and have been approached by many crooks because of my success. This rule will do nothing to stop them. They hurt my business! This rule will not stop Crooks – they circumvent and violate the current rules all the time. I pride myself on being a good American citizen and it will hurt me and also others who are trying to make an honest income. Thank you and please help us. Sincerely, Karen K. Young