FTC tries to destroy direct sales companies
waterfire
Hi everyone,
The FTC is trying to pass a ruling that makes it difficult
for direct sales companies to do business. It is ridiculously
intrusive and unAmerican. It is an amazing attempt to put a
damper on entrepreneurship.
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.
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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Dear Affiliate,
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, like Gano Excel, 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 Gano Excel 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) (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) (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) (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 Gano Excel USA, Inc.,
that would include tens of thousands of Affiliates in our considerable
database.
(4) (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/R511993BusinessOpportunityRuleNoticeofProposedRulemaking.pdf
Gano Excel encourages you, as an Independent Affiliate whose business
will likely be impacted by this rule, to 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.
Gano Excel thanks you for taking the time to write. 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/
We would appreciate if you would forward a blind carbon copy (bcc) to
Gano Excel at compl...@ganoexcel.biz .
Sincerely,
Soraya Gonzalez
Director of Compliance
Gano Excel USA, Inc.
++++++++++++++++++++++++++++++++++++++++++++
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
Gano Excel Affiliate. 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 sell Gano Excel
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. Gano Excel's sales kit only
costs $24.99. 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 Gano
Excel already has a 90% buyback policy for all products including sales
kits purchased by a salesperson within the last twelve months.
Under this waiting period requirement, I will need to keep very
detailed records when I first speak to someone about Gano Excel and
will then have to send in many burdensome reports to Gano Excel 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. Otherwise, Gano Excel and I are put at an
unfair advantage even though Gano Excel 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 Gano
Excel 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
Gano Excel Affiliate for ___ years. Originally, I became affiliated
with Gano Excel's 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]