| Comment Number: | 522418-13257 |
| Received: | 9/29/2006 4:41:36 PM |
| Organization: | CONSUMER AWARENESS INSTITUTE - and PYRAMID SCHEME ALERT |
| Commenter: | JON TAYLOR |
| State: | UT |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| Attachment: | 522418-13257.pdf Download Adobe Reader |
Comments:
ATTN: FTC Personnel - These comments constitute our rebuttal of the submission by Jeffery A. Babener of Babener and Associates (Tracking No. 522418-70034 and -07860). Mr. Babener has been providing legal support for the DSA and member MLM firms for some time and is in support of the DSA stand against the business opportunity rule as proposed by the FTC. He is right in stating that size and scope of the direct selling (MLM) industry is grossly underestimated in the FTC staff report on proposed rule. But he is dead wrong when he claims ““The FTC and the direct selling industry are on the same wavelength in their goal of furthering consumer protection.” Or if it is true that the FTC is on the same wave length as the DSA and MLM member firms, then the FTC definitely needs to make some changes to further consumer protection – thus the need for a honest and meaningful disclosure. As the attached report makes clear, the stated objectives of the FTC and the practices of the MLM industry are diametrically opposed. His suggestion of a 7-day right of rescission rule may be a workable approach, so long as it is coupled with prospects being encouraged to seek positive and negative feedback on the company from present and from ex-participants – and from Internet search engines, as that is the only available source for in-depth information on the downside of these schemes. A 14-day right of rescission would be even better. The statement by Mr. Babener regarding the proposed rule that “if implemented, [the rule] will have the result of crippling a major channel of distribution in the US as well as the livelihoods of 14 million Americans that look to direct selling to help further support their families” should not cause concern. After reading the enclosed attachment, an honest researcher should conclude that this crippling of the MLM industry would be a good thing for consumers because recruitment prospects they will not be so easily misled by the array of deceptions that are inherent in these schemes. And the “livelihoods of 14 million Americans” statistic is a blatant falsehood, at least as it applies to MLM chain selling schemes. Over 99% of participants in these schemes lose money, after subtracting product purchases and operating expenses. We have the evidence to prove it. Please read carefully the attached report and links to said research. Thank you. Sincerely, Jon M. Taylor, Ph.D., President, Consumer Awareness Institute and Advisor, Pyramid Scheme Alert - E-mail: jonmtaylor@juno.com - Web site for MLM research and guides - www.mlm-thetruth.com