| Comment Number: | 522418-08813 |
| Received: | 7/13/2006 2:17:13 PM |
| Organization: | Next Wave Sales & Marketing Services |
| Commenter: | Mari McShane |
| State: | CA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| Attachment: | 522418-08813.pdf Download Adobe Reader |
Comments:
I am writing this note to ask that you reconsider the proposed FTC Business Opportunity Rule, R511993. While I appreciate that the FTC is attempting to close loopholes and address unique scams that occur with some new business opportunities, as a XanGo distributor, I would encourage you to take into consideration that not ALL new business opportunities are the same. In particular, the following rule proposals have potential to negatively affect my ability to do legitimate, honorable, and ethical business. 1. Seven Day Waiting Period. The upfront individual investment with XanGo is only $35.00 (US). This does not suggest a level of risk that warrants a lengthy waiting period as suggested in Rule R511993. Perhaps it might be more applicable for other business opportunities, but not XanGo. Perhaps the rule should differentiate. In addition, the history of XanGo as a corporation and company has proven to be quite generous regarding requests for refunds, etc. 2. List of Nearest References. For confidentiality purposes, I am not in favor of being put in the compromising position of requesting legal permission from references in order to provide their personal information to strangers; nor conversely, as a single person, do I want my own personal information provided to a stranger. In addition, there are several loopholes in this section of the rule which allows that this personal information could be requested for fraudulent purposes which may or may not include unethical, illegal, and / or potentially dangerous situations. This section of the bill alone has potential to affect my ability to do business as well as my decision to personally stay in business as a XanGo distributor. 3. Earnings Claim Statement. While I strongly support the proposition that earnings claims made by business opportunity sellers should be substantiated, it is obvious that this requirement will not deter fraud. (I.e., a fraudulent company will provide fraudulent information, while a legitimate, honorable, and ethical company will bear the burden to meet this proposed requirement.) 4. Legal Actions. At the very least, this requirement should be modified to take into account the outcome of any noted litigation. Otherwise an environment exists whereby fraudulence is encouraged in the name of competition. In addition, a legitimate, honorable, and ethical company such as XanGo would be forced to provide litigation not even related to the very business opportunity transaction the rule is attempting to protect. 5. Cancellations and Refunds. In the case of XanGo, this would be a misleading statistic because so many folks become involved with this product for short term health goals. In short, I would strongly encourage that this rule either be completely struck, re-written completely, or else severely modified to acknowledge the difference between legitimate, honorable, and ethical new business opportunities vs. illegal, fraudulent, and unethical ones. Surely, a rule could be written to address this issue without affecting an entire industry for a few bad apples.