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Krazikas
Senior Biz-Whizer
Joined: Jun 01, 2006
Posts: 81
Status: Offline
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 Posted:
Jul 16, 2006 - 03:11 AM |
 
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Hi, I understand that the FTC is trying to pass a ruling that makes it difficult for direct sales companies to do business in the USA. If you know anyone in the direct sales business, please ask them to read the attached document and contact the FTC with your opinion ASAP! The deadline for this anti-small business bash letter writing campaign to the FTC is on Monday the 17th July.
The attached letter is from a networking company but has all the
info that is relevant to EVERY direct sales company with a sample
letter included. Do NOT copy the sample letter, make your own.
Thanks!
SEE BELOW
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As you may be aware, in April of this year the Federal Trade Commission (FTC) proposed a rule that, if passed, would have a tremendous negative impact on our industry. In order to comply with federal law and avoid being charged with deceptive or fraudulent practices, legitimate companies would be required to make various disclosures to prospects (including affiliate contact information, earning details, and legal information). Under this ruling, our Independent Affiliates would be required to maintain and submit detailed records to ensure accuracy of the required
disclosures. Lawful business transactions would automatically be
considered deceptive if any of the required disclosures (some noted below) were omitted.
Among the proposed requirements are:
((1) A mandatory seven-day waiting period from the time the seller of the opportunity (i.e.: the Affiliate) presents the
opportunity to a prospective purchaser to the time when the prospective purchaser can sign a contract or make any payment to the seller.
((2) Disclosure of an earning claims statement for the
purpose of substantiating any claims made by the seller of the
opportunity, whether the claims are verbal, visual, or in print. This
earnings statement would include extensive disclosures such as
timeframes when the earnings were achieved, contact information of those who achieved the stated earnings, and those characteristics that may differ from the prospect.
(3) Disclosure by the seller of all contact information for "references" (i.e.: all affiliates who have purchased the
opportunity within the last 3 years). If this number is more than 10, the seller is required to disclose the information of the 10 affiliates who are nearest to the prospect's location even if not part of your organization. If this is not possible, the seller will be required to disclose the contact details of all Affiliates nationwide that have enrolled within the last 3 years. In the case of many companies that would include tens of thousands of Affiliates in considerable databases.
(4) Disclosure to prospects of any prior litigation or civil or criminal legal actions involving misrepresentation, fraud, securities law violations, or unfair or deceptive business practices within 10 years in which the company, or any person or business
affiliated with the company, was involved as a subject, including
Affiliates. This information would have to be disclosed regardless of whether or not the subject was found innocent or whether the legal actions were related to the business opportunity being offered.
The full text of this proposed rule can be accessed from the FTC
website: http://www.ftc.gov/os/2006/04/R511993BusinessOpportunityRuleNoticeofP...
If you are likely to be impacted by this rule, it is recommended that you submit your personal comments to the FTC. The deadline is this coming Monday, July 17th.
Your letter should cover the following areas:
Personal Story
-Years selling products
-How selling products contributes to family finances
-How selling products has developed you as person (confidence, public skills, etc.)
Seven-Day Waiting Period (period before prospect can initiate any business activity)
-Casts direct selling plan in a negative light
-Record keeping and administrative problems
-Causes unnecessary delays
- Affects ability to build business
Litigation Reporting
-Unfair that it does not distinguish between winning and losing lawsuits
References
-Impractical to find 10 nearest distributors
-Privacy issues due to ID theft
- Safety issues due to disclosure of personal information
Appreciate FTC's Goals, But
-Understand that are fraudulent groups out there, but the FTC's
proposed rule would unfairly target legitimate direct selling
businesses.
The Direct Selling Association has provided the letter below as a
guideline for affiliates of member companies to use as a template when preparing their own comments. However, it is imperative that your letter is written in your own words. Please do NOT copy the sample letter.
Due to the short timeframe before the deadline, we recommend that you submit your comments to the FTC electronically. You may do so at:https://secure.commentworks.com/ftc-bizopNPR/
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SAMPLE LETTER FOR INDEPENDENT DIRECT SALESPEOPLE (IN KEEPING WITH PROPOSED GUIDELINES PROVIDED BY THE DSA).
Your name
Business name, if available
Street address
City, State Zip
Phone number, optional
Email address, optional
Date
Dear Sir or Madam:
[Opening paragraph] I am writing this letter because I am concerned about the proposed Business Opportunity Rule R511993. I believe that in its present form, it could prevent me from continuing as an Independent **********. I understand that part of the FTC's responsibilities is to protect the public from "unfair and deceptive acts or practices," but some of the sections in the proposed rule will make it very difficult if not impossible for me to our company's products.
[State your opposition to the seven-day waiting period] One of the most confusing and burdensome sections of the proposed rule is the seven day waiting period to enroll new Affiliates. People buy TVs, cars, and other items that cost much more than that and they do not have to wait seven-days. This waiting period gives the impression that there might be something wrong with the plan. I also think this seven-day waiting period is unnecessary, because we already have a full satisfaction guarantee money back offer.
Under this waiting period requirement, I will need to keep very
detailed records when I first speak to someone and will then have to send in many burdensome reports to my company that
will negatively affect my ability to build my business.
[Litigation Information] The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. Today, anyone or any company can be sued for almost anything. It does not make sense to me that I would have to disclose these lawsuits without cause. I will be placed in an unfair advantage even though my comapny and I have done nothing wrong.
[References] Finally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. I am glad to provide references, but in this day of identity theft, I am very uncomfortable giving out the personal information of individuals (without their approval) to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses including those of competitors. In order to get the list of the 10 prior purchasers, I will need to send the address of the prospective purchaser to my company and then wait for the list. I also think the following sentence required by the proposed rule will prevent many people from wanting to
sign up as a salesperson "If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers." People are very concerned about their privacy and identity theft. They will be reluctant to share their personal
information with individuals they may have never met. Furthermore, 80% of direct sellers are women. Have you considered that this rule may subject women to potential harassment or endangerment?
[Tell your personal story in your own words]I have been an Independent *********l Affiliate for ___ years. Originally, I became affiliated with *********** products because I like them and wanted to earn some additional money. Now my family depends on this extra income to supplement our budget.
[Conclusion] I appreciate the work of the FTC to protect consumers, but I believe this proposed new rule has many unintended consequences and that there are less burdensome alternatives available in achieving its goals.
Thank you for your time in considering my comments.
Sincerely,
[Your signature]
[Your name] |
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Trent
Supreme Master Biz-Whizer
Joined: Jul 01, 2004
Posts: 910
Location: Iowa
Status: Offline
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| Posted:
Jul 16, 2006 - 02:54 PM |
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jonson00
Biz-Whizer
Joined: Feb 06, 2012
Posts: 19
Status: Offline
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| Posted:
Feb 06, 2012 - 11:09 PM |
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