In response to the ANPR, DSA and its members argued for additional exemptions that
would keep multilevel programs, in particular, from falling within the proposed Rule’s purview.
DSA asserted that pre-sale disclosures are unnecessary in the context of direct selling where the risk of financial loss is low. To that end, DSA and its members recommended that the Commission preserve the inventoryexemptions from the minimum payment requirement.249 In addition, they contended that a Business Opportunity Rule should not cover opportunities with a repurchase or buy-back plan. They also suggested that the
minimum payment threshold should be raised from the current $500 to at least $1,000,251 in order not to impose significant costs on small direct sellers.
In short, DSA and its members asserted that any regulation of the multilevel marketing industry is likely to impose significant costs on small proprietors.
Rather, in DSA’s view, the problem in the industry is not from multilevel marketers, but from fraudulent pyramid schemes, which the Commission can address through current law.
We note, however, that
DSA’s position on raising the minimum payment threshold was opposed by many other commenters. Several commenters noted that
the purpose of the Rule is to prevent fraud, regardless of the amount at issue.
Others asserted that a monetary threshold simply provides scam operators a means to circumvent the Rule, noting thatbusiness opportunities frequently charge $495 to skirt the current Franchise Rule’s disclosure requirements.
For example, NCL stated that the: $500 minimum investment
". . . leaves many consumers without the disclosures and other protections that they need. Nearly one-third of the consumers who reported to the NFIC last year that they had lost money to fraudulent or deceptive business opportunities paid less than $500. . . . "
Whatever minimum amount might be set, fraudulent operators will price their services below it, and consumers will be victimized.
BRON:
http://www.mlmlegal.com/images/FTCPropo ... ssRule.pdf, Pagina 19079
