| Comment Number: | 522418-10234 |
| Received: | 7/15/2006 11:45:28 PM |
| Organization: | Nutronix International |
| Commenter: | Phil Schreiber |
| State: | Not in the US |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I would like to comment on the proposed legislation 16 CFR Part 4370. First of all I want to say I see in principle what this legislation is trying to do. You are trying to weed out direct marketing scams, and that's good. But you are going about it all wrong. After all, if a direct selling business is a scam, would they honestly pay attention to any of this legislation? Probably not; most of the prospects are not going to know anyway, and scams would just start operating on a don't ask, don't tell basis. Legitimate companies, on the other hand, are going to have to keep communist-like records for all of their distributors, and well, let's just say I would not want to be a staff member of the company to have to do that to potentially 100s of 1000s of people. It also creates a huge barrier for the distributor itself, since they would have to request records of earnings weekly, monthly, or daily and cannot do any recruiting or selling until then. This results in a loss of earnings for everyone involved, which will turn off a lot of prospective buyers. Also, you want records kept of all "Legal actions involving deceptive practices or other matters filed against the seller and/or the company in the last 10 years," yet providing both sides of the story would both require and provide a mountain of paperwork, something a prospect is not likely to read or care about anyway. People who misunderstand the business and sue my company or me will be documented and made public to people. This can give the incorrect idea that the business is a scam when in reality it is not. Even though we are all innocent until proven guilty under the law, our perceptions are a different story, and it would only be natural for prospects to be turned off because their mentality would be the complete opposite. Just because a lawsuit is launched does not mean the prosecution's claims are legitimate, but that part of the legislation does not distinguish that. You are also "Requiring all prospective sellers to be provided with a disclosure document." This disclosure document is extremely unnecessary, and creates too much havoc for both me and my downline. After all, how would you like it if your personal contact information is released many times over resulting in many phone calls and emails you are legally obligated to return? Does this not contradict the right to privacy of me and all my fellow businesspeople? You are also asking "The number of all direct sellers who have canceled within two years." This again provides misleading information because just because someone cancels their membership in a business, does not mean that the business is not legitimate. In internet direct selling businesses, for example, there are many examples of "program hoppers" or those who join a business, do not experience overnight success, and promptly quit, join another business, and repeat the pattern. These people are obviously not serious prospects but your legislation does not take that into account, either. You seem to forget that any business, no matter what it is, requires at least some risk, and nothing is guaranteed. With these new legislation proposals, the direct selling industry is being put at a disadvantage to indirect selling businesses by forcing us to present our prospects with a lot of misleading negative information to prospects directly affecting our profits. After all, is this not the complete opposite of what America is all about? Does America not stand for individual happiness within reason, regardless of the definition, without government interference? Think about the livelihoods of everyone you would be severely curtailing in the direct marketing industry. Please leave us alone. Let us go about our business. The scams will not last, and it is the legitimate businesses that will have staying power. Eventually the industry will find complete legitimacy. Just give it some time.