Comment Number: 522418-12309
Received: 7/17/2006 8:19:18 PM
Organization:
Commenter: Deb Smith
State: OH
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Reference: Business Opportunity Rule, R511993 Dear Members of The Federal Trade Commission: I am writing you to respond to your proposed new business opportunity rules. While I appreciate all that you do to watch out for our welfare, I believe that the proposal, as it stands now, will ultimately be a disservice to most all Direct Selling Distributors. The seven day waiting period would be devastating to our business. My husband travels all over the state of Ohio, into Indiana, Pennsylvania, Wisconsin, Michigan, West Virginia, and Kentucky for his Job, and often times shares the opportunity along the way. If we would have to wait seven days, chances are he would not be able to meet again with these people. Our company, Xango, requires a very minimal upfront financial investment, ($35.00 to become a distributor) and we also have a generous buyback policy, so that there is little or no risk to a prospect. The list of nearest references would also prove a hardship, if not an impossibility for most MLM Distributors. While most people are honest, and would not do anything dishonorable with the information provided, I am not so sure that I want just anyone having my personal information. Furthermore, how would anyone be positive they have the nearest geographical members to a prospect's location. I also believe that this could prove to become a great way for fraud to run wild. All they would have to do is supply a fraudulent list of references who are involved in their fraud to misrepresent their business. This rule would be very burdensome on the honest, legitimate business person. The earnings claim statement, while we support the proposition that earnings should never be overblown, and should be substantiated, we do not believe that this requirement will deter fraud. If they are willing to commit fraud, they will not be honest about anything, including earnings statements. This would further prove to be an extreme difficulty on the legitimate business person. On the proposed rule requiring distributors to disclose all legal actions, the outcome also needs to be disclosed. There are always people making false claims against people, therefore, the outcome should also be considered. For the Cancellations and Refunds rule, the corporations would have to maintain and update this database for its distributors, this could also be misconstrued by prospective distributors, due to the fact that distributors often join to achieve specific, short-term goals. After achieving these goals they cancel. Competitors may also join just to quit, thereby maneuvering the statistics to their favor, and giving a false perspective on the organization. While I am sure you have only the best of intentions with these rules, and at first they sound great, when you take the time to delve into them and research the pros and cons, unfortunately, there are more cons than pros. Please reconsider applying these rules. Thank you for your time and consideration in this matter. Respectively, Don and Deb Smith  Xango Independent Distributors