The Federal Trade Commission has approved changes to its Business Opportunity Rule that will ensure that consumers have the information they need when considering buying a work-at-home program or any other business opportunity. The Commission’s vote approving the final amendments to the Business Opportunity Rule was 4-0.
According to a report from the FTC, the changes simplify the disclosures that business opportunity sellers must provide to prospective buyers. The simplified disclosures will help prospective purchasers assess the risks of buying a business opportunity, while minimizing compliance burdens on businesses. (WCxKit)
In addition, the Final Rule, effective on March 1, 2012, applies to business opportunities previously covered under the Rule, as well as work-at-home offers such as envelope stuffing and craft assembly opportunities. The final Rule requires business opportunity sellers to give consumers specific information to help them evaluate a business opportunity.
Sellers must disclose five key items of information in a simple, one-page document:
1. The seller's identifying information;
2. Whether the seller makes a claim about the purchaser's likely earnings (and, if the seller checks the "yes" box, the seller must provide information supporting any such claims);
3. Whether the seller, its affiliates or key personnel have been involved in certain legal actions (and, if yes, a separate list of those actions);
4. Whether the seller has a cancelation or refund policy (and, if yes, a separate document stating the material terms of such policies);
5. And a list of persons who bought the business opportunity within the previous three years.
Misrepresentations and omissions are prohibited under the Rule, and for sales conducted in languages other than English, all disclosures must be provided in the language in which the sale is conducted. Consumers should use the disclosure document and supplementary information to fact-check sellers' sales pitches.
The announcement of a final Business Opportunity Rule completes the process started when the Commission published an Initial Notice of Proposed Rulemaking and proposed creating a Business Opportunity Rule separate from the Franchise Rule. The FTC issued a Revised Proposed Business Opportunity Rule and conducted a public workshop, and the staff issued a Staff Report. (WCxKit)
At every stage of the Rule amendment proceeding, the Commission solicited comment on the economic impact of the Rule, as well as the costs and benefits of each proposed amendment. In issuing the final Rule, the Commission has carefully considered the comments received and the costs and benefits of each amendment.
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
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