Grassroots Campaign Urges Change of FTC BizOp Rule

BOZEMAN, Mt.—The Federal Trade Commission (FTC) was flooded with more than 1,000 letters from individuals and companies calling for the modification of a proposed business opportunity rule that critics contend would adversely affect the network marketing industry.

According to the campaign, the rule, if not modified, would create a de facto seven-day waiting period before a new distributor can be enrolled; require the release of any litigation involving misrepresentation or fraud in the last 10 years whether the company or distributor was found innocent, settled out of court or the decision was pending; the release of a distributor’s 10 closest customers and their contact information; and the release of estimated earnings along with detailed financial data upon request.

“If this rule goes through as is, you’d have to sign the recruit up on day one, provide them with information that would dissuade them from signing up, sign them up a second time, no earlier than day eight, and then make sure you retain all these records for several years to come,” said Henry Kriegel, director of marketing of Sageant. “Considering the investment to get started in network marketing is around $20, this rule is extreme and definitely needs to be modified.”

Kreigel met with pro-reform organizations in mid-June and hand delivered countless letters to FTC. Support for the grassroots reform campaign (http://actioncenter.sageant.com) also has been provided by Brilliant Exchange, the Direct Selling Women’s Association, the Multi- Level Marketing Industry Association, the Distributor’s Rights Association and Tom Chenault, host of “The Home-Based Business Talk Show”. The Direct Selling Association filed and won an extension for comments until mid-July, extending the rebuttal period to Aug. 7.