Dave Responds To The FTC / MLM Mondays

Today was the last day for Direct Sellers, Multi-level Marketers, and Business Opportunity Vendors to submit comments to the Federal Trade Commission on the Proposed Business Opportunity Rule R511993

My good friend, Dave Stone has covered the topic extensively at MLM Today these past few weeks. Pay his site a visit.

I have submitted MY response to the Proposed Rule to the FTC and have forwarded copies to Quixtar and The Independent Business Owners Association International.

My response is printed below.

David Robison
(Personal address deleted)
dave@ontheroadwithdave.com


Federal Trade Commission / Office of The Secretary, Room H-135 (Annex W)
RE: Business Opportunity Rule, R511993
600 Pennsylvania Avenue, NW
Washington, DC 20580

July 16, 2006

To All Interested Parties

I, like many others, am writing this letter to voice my concerns and opinions regarding Business Opportunity Rule R511993. My first concern with writing this letter is that the volume of "boiler-plate" letters sent from concerned Direct Sellers will minimize the consideration the Federal Trade Commission may give the respondents. It is my hope that a "live' representative from the FTC office will give my letter the weight I feel it deserves.

The Proposed Business Opportunity Rule R511993 is certainly a step in the right direction to protect the public from "unfair and deceptive acts or practices" of unscrupulous "biz op" pitchmen. I also admire the implication of the rule to place Direct Sellers in a league with franchise-type businesses. For too long, Direct Sellers have lived with a public impression that they may not be true businesses.

But, I believe that the rule still lumps legitimate direct sellers and participants in legitimate Multi-level Marketing companies with con men and scam artists offering ""territories" and expensive vending machines or products with no potential market.

My first experience with Multi-level Marketing was in 1980 as a Shaklee Products distributor. I made extra money as a student in high school selling nutrition bars to my friends and household products to my teachers and friends of the family. I later signed up as an Amway Distributor and now am an Independent Business Owner affiliated with Quixtar. I also write an online weblog (www.ontheroadwithdave.com)
that discusses topics related to Multi-level Marketing and have made it a personal mission to explain methods of ethical marketing to my readers. The Proposed Rule affects my credibility as a marketer because under the rule I will be "suspect" from the very beginning and will once again have to explain the "whys" of my business's legalities.

My specific concerns are much like what you may have already received from Industry leaders, distributors, and individual company officers and personnel; but please consider my differences and agreements with these fine people.

1. SEVEN-DAY WAITING PERIOD

Starting a business may be as dangerous as buying a gun, and surely requires research and planning before making a decision, but a 7-day Waiting Period limits the freedom of the individual to make a decision in their own time. Many people have contacted me AFTER they have done their research on my associated company, Quixtar, and they are ready to become a Quixtar business owner. Should I be forced to make them wait AN ADDITIONAL 7 days? Should they be interrogated as to when they first heard about my company for a detailed report? And since Quixtar already offers a written money back guarantee, the proper safety net is already in effect.

If you must protect the consumer with a "cooling off period", then require enforcement of a standard 3-Day Refund policy for cancellation or shorten the waiting period to 3 days.

2. DISCLOSURE AND REPORTING OF LITIGATION

The Proposed Rule also calls for the release and disclosure of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices.

This is a great addition provided the information is about my company, Quixtar or MYSELF and provided that any litigation disclosure concerns legal actions that found myself or Quixtar guilty of such charges.

We live in litigious times; to protect the brand of my company and myself; disclosure of every lawsuit would damage my credibility even in cases that vindicated my company or myself. Also as a business owner I should not be held accountable for others in my company's pay structure hierarchy. I should only be held accountable for MY misdealing. I have no qualms disclosing my legal status to a potential client or business associate.

3. REFERENCES

The Proposed Rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. This rule presents several problems to my particular business, although I have no problem with providing references. I would be glad to provide the names of those associated with my own business.

But I feel this requirement would infringe on the privacy of every IBO whose name, address, and phone number was provided to prospects. It would also penalize the sponsor, who would be required to give his prospect contact information for 10 other Quixtar Business Owners, any of whom might be happy to register the prospect themselves.

4. DISCLOSURE FOR INCOME CLAIMS

Again, I agree with the intent of the proposal; I feel our industry has been plagued with hype and wild claims but to require a separate disclosure for any income claim is burdensome. In the case of my company, Quixtar; we are already required to issue a blanket disclosure of average income for all active distributors in a given time frame. This simple, standard, easily understood disclosure would be perfect industry wide and could be implemented more easily.

5. FINANCIAL DISCLOSURE TO SUBSTANTIATE INCOME CLAIMS

Again, a simple average income disclosure approved by the FTC would eliminate potential business owners from being duped by examples of potential wealth and/or success.

In closing, I believe in the efforts of the Federal Trade Commission and I believe that providing every prospect with important information is good for the prospect and MY business. I feel, however, the FTC already possesses the power to implement change in a simpler form and in a way that protects the consumer, while also protecting ethical business owners. Thank you for the opportunity to express my views.

Respectfully,

David Robison


"MLM Mondays" is featured every week on (what else?) Monday; and offers information, advice and tips on operating an MLM-affiliated business. On The Road With Dave does not guarantee any results from the information, but offers it as opinion.