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FTC | RIN: 3084-AB04 | Publication ID: Fall 2010 |
Title: Business Opportunity Rule | |
Abstract: From the review of the current Franchise Rule (RIN 3084-AA63), staff recommended that the rule be split into two parts: One part addressing franchise issues and the second addressing business opportunity issues. On April 6, 2006, the Commission announced publication of a Notice of Proposed Rulemaking (NPRM) seeking comment on this proposed Business Opportunity Rule. Pending completion of the proceeding initiated with this notice, business opportunities presently covered by the requirements of the original Rule will remain covered, as set forth as part 437 of the final amended Rule. 72 FR 15444 (March 30, 2007) Pending completion of the proceeding initiated with this notice, business opportunities presently covered by the requirements of the original Rule will remain covered, as set forth as part 437 of the final amended Rule. 72 FR 15444 (March 20, 2001). The proposed rule addresses fraud in the offer and sale of business opportunity ventures by requiring business opportunity sellers to furnish specific presale disclosures to prospective purchasers, as well as prohibiting specific conduct that the rulemaking record and the Commission's law enforcement experience show are prevalent problems. The extended comment period closed on July 17, 2006. A subsequent extended rebuttal comment period closed on September 29, 2006. After reviewing the comments, the Commission published a revised NPRM on March 26, 2008, that would require business opportunity sellers to furnish prospective purchasers with specific information that is material to the consumer's decision as to whether to purchase a business opportunity and which should help the purchaser identify fraudulent offerings. The revised NPRM also would prohibit other acts or practices that are unfair or deceptive within the meaning of section 5 of the Federal Trade Commission Act (the FTC Act). The comment period closed on May 27, 2008. The extended period for rebuttal comments closed on July 1, 2008 (73 FR 34895). The Commission held a day-long workshop on June 1, 2009, to explore proposed changes to the rule, including the effectiveness of the proposed one-page Business Opportunity Disclosure Form that sellers of business opportunities would be required to provide to prospective purchasers. The comment period closed on June 30, 2009. On October 28, 2010, the Commission released a staff report (the report can be found at http://ww.ftc.gove/opa/2010/10/businessopp.shtm) recommending that coverage of the Business Opportunity Rule be expanded to include work-at-home opportunities suck as envelope stuffing, medical billing, and product assembly, many of which have not been covered before. FTC staff also recommends streamlining the discourses required by the Business Opportunity Rule so that companies or individuals selling business opportunities make important disclosures to consumers on a simple, easy-to-read document. If adopted, the changes will make it less burdensome for legitimate sellers to comply with the Rule, while still protecting consumers from "widespread and persistent" business opportunity fraud. Public comments on the staff report will be accepted until January 18, 2011. | |
Agency: Federal Trade Commission(FTC) | Priority: Substantive, Nonsignificant |
RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Proposed Rule Stage |
Major: No | Unfunded Mandates: No |
CFR Citation: To be codified at 16 CFR 437 (To search for a specific CFR, visit the Code of Federal Regulations.) | |
Legal Authority: 15 USC 41 to 58 |
Legal Deadline:
None |
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Timetable:
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Regulatory Flexibility Analysis Required: No | Government Levels Affected: State |
Small Entities Affected: Businesses | Federalism: No |
Included in the Regulatory Plan: No | |
International Impacts: This regulatory action will be likely to have international trade and investment effects, or otherwise be of international interest. | |
RIN Data Printed in the FR: No | |
Related RINs: Split from 3084-AA63 | |
Agency Contact: Kathleen Benway Federal Trade Commission Bureau of Consumer Protection, 600 Pennsylvania Avenue NW, Washington, DC 20850 Phone:202 326-2024 Email: kbenway@ftc.gov |