FTC Business Opportunity rule. (FTC R511993).

Discussion in 'Network/Multi-level Marketing' started by jobfreeworld, May 4, 2008.

  1. jobfreeworld

    jobfreeworld New Member




    Personally, with so many scams that are created to look like an MLM, it has destroyed the reputation of the industry, so like with franchises when there were first offered, there was abuse and fraud. Now there are very few issues with franchises because they require a rather extensive applications and registration process, so perhaps a modified version would be suited to MLM industry to finally purge the scams from industry.

    I don't like the idea of FTC abusing their power to put businesses under, and this sweeping attack often brings down legitimate companies as well which is well documented over the years. The reality is, there will always be scams, in MLM, and in other business opportunities, but at least in MLM there are smaller losses. I know people who put tens and hundreds of thousands into what turned out to be well calculated scams that looked legitimate, so no matter what FTC does, scams will still exist.

    I do beleive there should be consistant rules and regulations no matter where a company is operating, and this too has been an issue over the years, some states will have rules that are different than others, as in initial investment or mandatory product purchase, as example. I tend to look for the no cost opportunities since these issues are totally removed from the equation, and are much more protected from unwarranted attacks from regulators. The deals which raise a flag are all those $1K plus deals which provide pumped up value on ebooks and so called marketing software, when we all know these programs are available for free if you research them all.

    Dubious value is indeed an issue that should be verified or regulated first. All the scams use this strategy boosting the value of what are worthless products in most cases. The bottom line acid test for all companies is to establish a benchmark that retail sales to non distributors should be in the 50% range, and if this simple rule were mandated, all these money driven scams would be driven out of market place. When only distributors are purchasing from company, it puts a big target on the back of company and in time, the will be attacked. It would be so easy to clean up industry, but with so few MLM's with retail sales to non distributors so small a percentage, it is still a grey area.

    Good luck to all, Mike

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