Comment Number: 522418-13206
Received: 8/22/2006 3:27:11 PM
Organization:
Commenter: Larry Leisenring
State: CA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I read the comments made by the corporate and private counsel for Pre Paid Legal Services, Inc.(PPD), dated July 17, 2006, that were submitted to the FTC. Based on additional facts that were not submitted and information that is contrary to what PPD submitted to the FTC, I believe that only self-serving concerns were presented, while information that is harmful to PPD was omitted. In the past ten years, there have been over one million people recruited into PPD's "opportunity." Based on the high rate of membership loss, low per associate sales volume, the need for PPD to annually recruit masses of new associates to replace the high percentage that leave, or stop selling, and the fact that most of the people making any sales are new associates, it is clear that supposed money to be made eludes the hundreds of thousands of lower-level associates, but makes a fortune for the company and the tiny percentage of associates in the upper-levels of the hierarchy. In the last few years, PPD's legal membership growth has greatly dropped off, even though it is recruiting record numbers of new associates and having record numbers of "vested" associates on hand. PPD slashed the price for its "opportunity" from $249 to $49 in 2005 and recruiting over 135,000 more associates than the 107,000 it recruited in 2004, which also kept the company from facing a net decline in legal memberships, since almost all associates buy a membership as a way to become "vested" as a way to gurantee that they will receive commissions. In 2005, PPD's associate owned memberships jumped from around 14% to over 30%, making associate owned memberships the second largest market for memberships and outstripping memberships owned by employer groups. Not only are associates the main source for PPD's membership sales and recruiting new associates, they are becoming more and more important to keeping the company from facing a substantial drop in members, revenues and stock price, so PPD is doing all that it can to (excuse the expression) suck-in as many new associates that it can and uses subtle deception and overt hype about making a lot of money off of those that you recruit into your downline. PPD abuses the dreams of literally hundreds of thousands of people, for the benefit of a few and uses the "moral good" of its products, while coveingr-up the facts about membership cancellations, the difficulty of selling its products and the incredibly small percentage of associates who ever see a net profit. If PPD is reflective of the kind of marketing that is used to lure people into MLM based companies, it would be nothing less than unethical for the FTC to not inforce stringrnt disclosure guidelines, since millions of people have been duped and millions more will be duped into schemes promoted by companies and individuals who prey on the hopes and dreams of those who wish to make a better life for themselves. Millions of people have invested and lost large amounts of money and have spent uncountable hours of time, trying to chase the elusive promises made by MLM based companies. We would never allow companies to use the kind of distorted information and lack of disclosure to attract investor's, so why should we allow companies to use distorted information and almost no disclosure when attracting people into their "opportunity?" Please feel free to contact me if you would like documented information regarding PPD and the unrealistic and contorted marketing that it has used to attract hundreds of thousands of people into paying for the chance to sell its products.