The Federal Trade Commission is considering a new proposed rule, which would require Biz Op’s and business opportunities to substantiate earnings claims that they may to potential buyers if the buyer requests them. Such earnings claims proof will hopefully eliminate much of the fraud that goes on in the business opportunity sector.
Below is a copy of the Federal Trade Commission’s proposed rule on substantiate earnings claims to potential buyers to ask for them;
Proposed section 437.5(f): Written substantiation for earnings claims
“Proposed section 437.5(f) would prohibit a seller who makes an earnings claim from failing to provide written substantiation to prospective purchasers and to the Commission upon request. Rather than mandating that business opportunity sellers include documentation for earnings claims - which could be voluminous - in the earnings claim statement itself, section 437.5(f) would reduce compliance costs by requiring only that such materials be provided to potential purchasers and to the Commission upon request. Purchasers could then review the documentation if they so choose.”
Most business opportunity practitioners are indeed honest, however many simply make up huge numbers that the buyer may potentially make if they buy the business opportunity. For instance; “Make $10,000 per month stuffing envelopes part-time in your own home, while working in your underwear and watching TV.” You may think this sounds funny and indeed it is, however now the business opportunity practitioners would have to come up with names and proof that people were actually making that kind of money after they had bought their business opportunity. Consider this in 2006.
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