Proposed FTC Business Opportunity Rule - Urgent Action Needed
The Notice of Proposed Rulemaking (NPR) R511993 released by the Federal Trade Commission (FTC), which addresses business opportunities, could have a devastating impact on the entire direct-selling industry, requiring companies to drastically alter their sales methods and placing additional burdens on direct-sellers in order to comply with federal law.
In particular, the Rule, if adopted in its current form, would:
• Require that those disclosures be given at least seven days before any prospective purchaser signs a contract or makes payment to the seller; • Require that the seller of a business opportunity provide a "disclosure statement" which would include information such as previous lawsuits, the number of direct sellers who cancel within two years and a list of "references" i.e., purchasers of the opportunity in the previous three years; • Require business opportunity sellers who make earnings claims to provide an additional "Earnings Claim Statement" to prospective distributors, which would include extensive earnings disclosures that would need to be frequently updated and • Create new definitions of "business opportunity," "business assistance" and "earnings claim", creating broad language to encompass many direct selling practices. • Read the complete Rule (PDF)
We strongly urge you to draft a personal letter regarding the FTC's proposed rule. Your letter is important, since the FTC wants to hear comments from members of the public.
Written comments to the FTC must be received on or before June 16, 2006.
Please find a SAMPLE letter drafted by our attorney and the DSA, at the end of this message. This sample is meant only to be a GUIDE for you. The DSA has communicated to us that personalized letters will have a much greater impact than a mass-produced form letter. If you have already participated in sending a form letter, that's not a problem, but please also send a 'personal' letter, expressing how this 'rule' would impact you and your business.
Your letter should cover the following areas of concern in the rule:
Seven-Day Waiting Period -Casts direct selling plan in a negative light -Leads to record keeping and administrative problems -Causes unnecessary delays
Litigation Reporting -Is unfair that it does not distinguish between winning and losing lawsuits
References -Is impractical to find 10 nearest distributors -Raises privacy issues due to ID theft and safety
Appreciate FTC's Goals, But -We understand there may be fraudulent groups out there, but the FTC's proposed rule would unfairly target legitimate direct selling businesses.
You should also include the following:
Personal Story -Years selling products -How selling products contributes to your family finances -How selling products has helped you develop as a person (confidence, interpersonal skills, etc.)
Your name Business name, if available Street address City, State Zip Phone number, optional Email address, optional
Federal Trade Commission/Office of the Secretary, Room H-135 (Annex W) Re: Business Opportunity Rule, R511993 Fax No.: 202-395-6974
Personal Note to Care2 from Vibraceous, ND:
I don't have a fax machine, so I sent my comment in through using this link: FTC Comment Form
It only took about five minutes in all of my time.
This is a very important issue. This does not just affect those involved in the direct selling industry...this rule will affect us ALL!
How? Freedom, for one thing. Economy, for another thing, too. Direct selling offers people opportunities to get up on their feet and work for themselves when, for whatever reason, they can't "just go get a job."
In my work as a doctor of naturopathy, I recommend various products to people which will offer their body support in attaining the goals they have set for their health. I have a number of product lines which I use, in order to be able to provide the best of all things that people (or pets) commonly need. These products are mostly sold through direct marketing plans. Not all, but some. I choose my product lines according to quality, not according to method of sale.
So, if I recommend a product to someone, and that person is ready to start their health regime NOW, or if perhaps they are in some kind of need that is rather timely, (which happens a great deal with health), then I like to be able to get them started with their products as soon as I possibly can, and at the same time, to be able to offer the very best price that I can.
Well, if this rule passes, then the consumer is going to have to decide....Do they want the best price? Or would they rather receive their products soon? They will no longer have the option of having both anymore.
Why? Because the best prices come with wholesale membership, which will require, if this new rule is imposed, seven days to establish, instead of letting them make their own decision now.
Contracts can always be cancelled. That's already built in. So what is the purpose of this? Is it really helping the consumer? Or is it treating the consumer like they can't make decisions themselves, without a whole week to think. What if they already know? It takes less time to get married than this!
Please add your comments to those being reviewed by the FTC by filling out this form now: FTC Comment Form All comments MUST be submitted by June 16, 2006, to be considered, so please take 5 minutes right now!
Here is the comment I left. Personalize your own in accordance to your own experience and viewpoint. THANKS!!!!!
Sincerely, Vibraceous, ND
************ MY PERSONAL COMMENT TO THE FTC: I have been involved in direct selling through a number of companies over the years...Nature's Sunshine, Mannatech, Waiora, Extreme Research, Enrich, Tupperware, House of Lloyd Toys and Gifts, Discovery Toys...and more. I have a disability, and these companies have offered me the opportunity to work out of my home and help my family get by. I'm not able to hold a regular job, and this type of selling has let me be my own boss, and work my hours around my own health care demands. Much of my customer base has been people in similar situations to mine...People who are glad to have someone to show them there is an easy way to help raise yourself up out of a seemingly hopeless financial situation. I've used these businesses over the years to help people...including myself and my family...friends as well as total strangers from faraway...to gain independence from having the chance to stand on their own. PLUS...I sell things that help lift people up! Like herbs and like educational toys!!! Why would the government ever want to interfere with something so positive as this? I understand there are dishonest people and businesses, but can't that be said of any trade? I believe this puts a bad light on the entire industry, which in my mind is not at all fair. This will make things so complicated and difficult, too, that I'm quite sure it will be a deterrant to people...I will no longer be able to tell people how easy it is, because now this will be making it hard. The disability I have is traumatic brain injury. I'm not really looking forward to more paperwork...Especially not paperwork that's going to cost me money in terms of opportunities lost. Direct selling is what has been helping my family survive. Thank you for hearing me out.
YOUR HELP IS URGENTLY NEEDED!!!
Your help is needed in supporting a letter writing campaign to the Federal Trade Commission.
Please open the link of a sample letter from the Direct Selling Association to use as a template for your own personal letter. Your letters must be received by the FTC by June 16, 2006 so PLEASE share this with other interested parties and send immediately.
With all of us working together on this grassroots campaign we will make a difference. Hand written and personally signed letters have more impact than copies and emails. However, there is also an email address to direct your comments in the sample letter below.
To find your local representative we have provided a direct link as well as a link for the Commissioners of the Federal Trade Commission.
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