FTC Proposes New Business Opportunity Rule

Will the FTC's New Business Opportunity Rule change the way we do business as a Direct Sales person?

The FTC is proposing a New Business Opportunity Rule that some say will bring on some potentially damaging requirements. For example:

From Direct Selling Women's Alliance...

#1: What is the Business Opportunity Rule?
Following are just some of the potentially damaging requirements:

- > Create new definitions of “business opportunity,” “business assistance” and “earnings claim,” creating broad language to encompass many common business practices;

- > Require that a detailed “disclosure statement” be given at least seven days before any prospective purchaser signs a contract or makes payment to the business assistance provider;

- > Require that the business opportunity “disclosure statement” include information such as previous lawsuits, the number of previous purchasers who have canceled 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 purchasers, which would include extensive earnings disclosures that would need to be frequently updated.

- > To view the complete ruling (approximately 117 pages) of the Business Opportunity Rule, click here to visit the related page on the web site of the Federal Trade Commission.

#2: What does this proposed rule mean for distributors?

- > The required disclosure and earnings statements and the required list of all distributors who have cancelled their distributorship in the previous last two years may cause the sponsoring process to become cumbersome and difficult.

- > These requirements may create unnecessary alarm and concern about the legitimacy of the profession and your business opportunity to prospective distributors.

- > The proposed seven day waiting period between receiving the disclosures and enrollment would likely cause a potential distributor to lose their enthusiasm for joining your company.

- > The costs of complying with the requirements would increase expenses to the company which may be passed on through the selling price of goods or services we offer.

In fact, the very nature of this ruling is evidence that the FTC does not truly understand that the vast majority of distributors conduct business ethically and honestly every day and that such a ruling threatens the livelihood of these individuals.

Is it right that the more than 13 million independent distributors be wrongfully penalized because a very few people have caused the FTC to look negatively at our profession? No!

#3: Why should we speak out now?
We only have until July 17th to let the Federal Trade Commission hear the voice of the millions of direct sellers who have a stake in the future of this profession.
It is the voice of the distributors that will have the greatest impact as they learn how women and men with families are counting on the additional income their part or full-time businesses provide. The FTC must hear from you - the individuals putting their children through college, saving for retirement, reducing their consumer debt and providing a better quality of life for their families. They especially need to hear from those of you who are full-time direct sellers so they understand that this as the viable profession we all know it to be.

#4: How can I have my voice be heard?
Don't wait and hope that someone else will speak out for you!

This is your opportunity to show the strength and unity of direct selling professionals by sharing this information with everyone you know whose life will be affected. Next…write a personal letter to the FTC.

Two ways to submit your comments and let your voice be heard:

1. Mail a compelling and heartfelt letter to the FTC today! TWO copies must be sent when submitting you comments by mail. (Click here to Download sample letter from MyDSWA.org.)

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

Because all mail to this Washington based office is subject to delay due to heightened security precautions we encourage you to overnight your letter if you are sending it close to the July 17th deadline.

2. You may also submit your letter electronically directly to the Federal Trade Commission web site. Here is the link: https://secure.commentworks.com/ftc-bizopNPR/

While you can block and copy your letter of 4000 characters or less into their submission form, we strongly urge you to create your letter in a separate document and then submit it as an attachment using the browse button at the bottom of the form.

Note: Be sure that your direct selling company receives a copy of the letter that you submit so they are aware of your initiative and dedication to the profession.

All comments should refer to "Business Opportunity Rule, Matter No. R511993" to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope.

Let your voice be heard here too!
Please feel free to post your comments!