| Comment Number: | 522418-10418 |
| Received: | 7/16/2006 1:05:18 PM |
| Organization: | Xango Distributor |
| Commenter: | Charlotte Emery |
| State: | OR |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I am a new distributor for Xango, although I have been in several other direct marketing organizations. The proposed Business Opportunity Rule does not seem appropriate to me for the majority of these organizations. I know that we need to have better controls for scams in business opportunities, but perhaps we should concentrate on business opportunities which require a significant financial outlay rather than the ones which require $500 or less to get started. Xango, in particular, and perhaps some of the others, will provide a full or partial refund within a specified period of time if the new distributor decides that this business is not for them. Also, the waiting period for starting a business with a very low (under $500) startup cost seems excessive at 7 days. Businesses who sell merchandise need only wait 3 days to refund the purchase price, and are able to go ahead with the transaction before that, providing the refund at a later date if needed. Wouldn't this work just as well for the startup costs on business opportunities which require less than $500 to begin? What about peoples' own personal responsibility to think before they ":leap"? We cannot create rules and laws to protect everyone from the potential harm of all their actions, although I certainly agree that protection from scams should be attempted. A person can purchase a car for thousands of dollars and regret it a week or so later but be stuck with their purchase. Many direct sellers travel for business and to require them to be there for a week before completing the business transaction is unrealistic and punitive. What I am saying is not that we shouldn't have a waiting period with a refund policy, but that a 7-day waiting period before an under-$500 business startup can be processed is excessive. In addition, the disclosure regulations will most probably be overly-burdensome for most of these direct sellers, and providing names and addresses of other distributors would be extremely difficult and violate their privacy. People can own other businesses and real estate without having to disclose their name, address, and length of ownership. This seems discriminatory in the business world, and again, in this case, we are talking about a business opportunity that doesn't require even thousands of dollars to start, but under $500! Of course, there are people who purchase or pay to start many things which they find didn't work for them, although the merchandise or opportunity works fine for others. And a certain amount of people have great intentions, but don't do the necessary actions to benefit from their purchases. Think about all of the exercise equipment bought and gathering dust in people' homes... In my opinion, the benefits of the direct selling organizations I've been involved with have outweighed any potential money I may have "lost". I've learned to talk to strangers and how to sell. I love the business concept of being able to sell person-to-person without the brick-and-mortar walls. I love having a home-based business, and it is a godsend for many of us women (and men!) who, through direct selling, can work from a home base where we can still take care of our families and homes, the very basics which are the future of our society's success. I also have some health problems which make it difficult for me to work a traditional job, and I know of many other people who would be on public assistance without this type of business. As they now stand, the proposed regulations to protect the public from business opportunity scams would severely curtail the future of legitimate and beneficial direct selling. Is this really the intent of this regulation? Or could it be rewritten to target the real business opportunity scammers and not harm the direct-selling businesses? Rather than make our business so difficult that we will surely fail, I hope and pray that the proposed rule will be changed.