Proposed Rule2022-25587
Business Opportunity Rule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 25, 2022
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission ("FTC" or "Commission") is requesting public comment on its "Business Opportunity Rule" ("Rule"), the trade regulation rule governing the sale of certain business opportunities. The Commission is soliciting comments about the efficiency, costs, benefits, and regulatory impact of the Rule, as part of its ten-year regulatory review plan. The Commission is also soliciting comments to inform its consideration of whether the Rule should be extended to include business opportunities and other money-making opportunity programs not currently covered by the Rule, including business coaching and work-from-home programs, investment coaching programs, and e-commerce opportunities. All interested persons are hereby given notice of the opportunity to submit written data, views, and arguments concerning the Rule.
Full Text
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<title>Federal Register, Volume 87 Issue 226 (Friday, November 25, 2022)</title>
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[Federal Register Volume 87, Number 226 (Friday, November 25, 2022)]
[Proposed Rules]
[Pages 72428-72432]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-25587]
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FEDERAL TRADE COMMISSION
16 CFR Part 437
RIN 3084-AB04
Business Opportunity Rule
AGENCY: Federal Trade Commission.
ACTION: Regulatory review; advance notice of proposed rulemaking;
request for public comment.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is
requesting public comment on its ``Business Opportunity Rule''
(``Rule''), the trade regulation rule governing the
[[Page 72429]]
sale of certain business opportunities. The Commission is soliciting
comments about the efficiency, costs, benefits, and regulatory impact
of the Rule, as part of its ten-year regulatory review plan. The
Commission is also soliciting comments to inform its consideration of
whether the Rule should be extended to include business opportunities
and other money-making opportunity programs not currently covered by
the Rule, including business coaching and work-from-home programs,
investment coaching programs, and e-commerce opportunities. All
interested persons are hereby given notice of the opportunity to submit
written data, views, and arguments concerning the Rule.
DATES: Written comments must be received on or before January 24, 2023.
ADDRESSES: Interested parties may file a comment online or on paper by
following the Instructions for Submitting Comments part of the
SUPPLEMENTARY INFORMATION section below. Write ``Business Opportunity
Rule ANPR, Project No. R511993'' on your comment, and file your comment
online through <a href="https://www.regulations.gov">https://www.regulations.gov</a>. If you prefer to file your
comment on paper, mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Suite CC-5610 (Annex B), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Christine M. Todaro, (202) 326-3711,
<a href="/cdn-cgi/l/email-protection#ec8f9883888d9e83ac8a988fc28b839a"><span class="__cf_email__" data-cfemail="4a293e252e2b38250a2c3e29642d253c">[email protected]</span></a>, Melissa Dickey, (202) 326-2662, <a href="/cdn-cgi/l/email-protection#2449404d474f415d644250470a434b52"><span class="__cf_email__" data-cfemail="f69b929f959d938fb6908295d8919980">[email protected]</span></a>, or
Andrew Hudson, (202) 326-2213, <a href="/cdn-cgi/l/email-protection#77161f02130418193711031459101801"><span class="__cf_email__" data-cfemail="c8a9a0bdacbba7a688aebcabe6afa7be">[email protected]</span></a>, Division of Marketing
Practices, Bureau of Consumer Protection, Federal Trade Commission,
Mailstop CC-5201, 600 Pennsylvania Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
I. Background
The Commission issued the Business Opportunity Rule pursuant to its
authority under Sections 5 and 18 of the Federal Trade Commission Act
to proscribe unfair or deceptive acts or practices.\1\ The Business
Opportunity Rule requires business opportunity sellers to furnish
prospective purchasers \2\ a disclosure document that provides
information regarding the seller, the seller's business, and the nature
of the proposed business opportunity, as well as additional information
to substantiate any claims about actual or potential sales, income, or
profits for a prospective business opportunity purchaser. The seller
must also preserve information that forms a reasonable basis for such
claims.
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\1\ Business Opportunity Rule Statement of Basis and Purpose, 76
FR 76858 (Dec. 8, 2011). Section 5(a) of the Federal Trade
Commission Act, 15 U.S.C. 45(a), prohibits ``unfair or deceptive
acts or practices in or affecting commerce.'' Section 18 of the FTC
Act, 15 U.S.C. 57a, permits the Commission to promulgate, modify,
and repeal trade regulation rules that define with specificity acts
or practices that are unfair or deceptive in or affecting commerce
within the meaning of Section 5.
\2\ Prospective business opportunity purchaser'' is a broad
term; it includes individuals seeking to purchase a business or
money-making opportunity but can also include job seekers who
encounter marketing for business opportunities.
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The Rule is designed to ensure that prospective purchasers receive
information to help them evaluate business opportunities. 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 yes, 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, the seller must provide a separate list of
those actions); (4) whether the seller has a cancellation or refund
policy (and, if yes, the seller must provide a separate document
stating the material terms of such policies); and (5) a list of persons
who have purchased 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.
Under the Rule, a ``business opportunity'' means a ``commercial
arrangement'' in which a ``seller solicits a prospective purchaser to
enter into a new business''; the ``prospective purchaser makes a
required payment''; and the ``seller, expressly or by implication,
orally or in writing, represents that the seller or one or more
designated persons will'' either (1) provide locations for the
purchaser's equipment, such as a vending machine; (2) provide outlets,
accounts, or customers for the purchaser's goods or services; or (3)
buy back any or all of the goods or services that the purchaser makes
or provides.\3\
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\3\ 16 CFR 437.1(c).
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The Business Opportunity Rule arose out of the Disclosure
Requirements and Prohibitions Concerning Franchising and Business
Opportunity Ventures Rule (``Original Rule''), which addressed
deceptive and unfair practices in the sale of franchises and business
opportunity ventures.\4\ In March 2007, the FTC bifurcated the Original
Rule into a Franchise Rule and Interim Business Opportunity Rule in
order to require different kinds of pre-sale disclosures and related
regulatory provisions.\5\ The Interim Business Opportunity Rule was
similar in substance to the Original Rule. On March 1, 2012, the
Commission's Revised Business Opportunity Rule took effect and, among
other things, expanded the types of covered business opportunities and
simplified and streamlined the disclosures provided to prospective
business opportunity purchasers.\6\
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\4\ Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures Rule Statement of
Basis and Purpose, 43 FR 59614 (Dec. 21, 1978).
\5\ Disclosure Requirements and Prohibitions Concerning
Franchising & Disclosure Requirements and Prohibitions Concerning
Business Opportunities, 72 FR 15444 (Mar. 30, 2007).
\6\ Business Opportunity Rule Statement of Basis and Purpose, 76
FR 76817 (Dec. 8, 2011).
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Since the Rule took effect, the Commission has continued to
vigorously challenge misleading earnings claims. For example, the FTC
has brought cases under section 5 of the FTC Act, 15 U.S.C. 45, against
business coaching and work-from-home programs, investment coaching
programs, and e-commerce opportunities.\7\ Despite the aggressive
enforcement program at the Commission, deceptive earnings claims
continue to proliferate in the marketplace, and many of them are not
covered by the Rule. Among other things, this advance notice of
proposed rulemaking (ANPR) solicits input on whether the Rule should be
expanded.
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\7\ See Advance Notice of Proposed Rulemaking Concerning
Deceptive or Unfair Earnings Claims, 87 FR 13951, 13952 n.16.
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II. Regulatory Review of the Business Opportunity Rule
The Commission reviews its rules and guides periodically to seek
information about their costs and benefits, regulatory and economic
impact, and general effectiveness in protecting consumers and helping
industry to avoid deceptive or unfair practices. These reviews assist
the Commission in identifying rules and guides that may warrant
modification or rescission.
With this advance notice of proposed rulemaking, the Commission
initiates such a review. The Commission solicits comments on, among
other things: (1) the economic impact of, and the continuing need for,
the Rule; (2) the Rule's benefits to consumers; (3) and the burden it
places on industry members
[[Page 72430]]
subject to the requirements, in particular small businesses.
III. Issues for Comment
To aid commenters in submitting information, the Commission has
prepared the following questions related to the Business Opportunity
Rule. The Commission seeks comments on these and any other issues
related to the Rule's current requirements. The Commission will also
consider any comments previously submitted in response to the Advance
Notice of Proposed Rulemaking Concerning Deceptive or Unfair Earnings
Claims \8\ that are relevant to these questions or any other issues
related to the Business Opportunity Rule's current requirements. The
Commission requests that responses to its questions be as specific as
possible. Commenters should provide any available evidence, including
empirical analyses, that supports their position. Where comments
advocate a change to the Rule, please be specific in stating the unfair
or deceptive act or practice to which the change relates, provide
evidence of the pervasiveness of the act or practice, and describe the
suggested change and any potential costs or benefits the change might
create for prospective purchasers and business opportunity sellers.
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\8\ Id. (comment period closed May 10, 2022). In that matter,
No. R111003, the Commission solicited and received comments about
the following industries: multilevel marketers, for-profit schools,
and gig platforms. The Commission will consider whether to propose
one or more rules addressing the topics raised in those comments as
part of that rulemaking, where it may also address other topics
raised in that advance notice of proposed rulemaking relating to
deceptive or unfair earnings claims.
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A. General Regulatory Review Questions
1. Need: Is there a continuing need for the Rule? Why or why not?
2. Benefits and Costs to Consumers: What benefits has the Rule
provided to consumers, and does the Rule impose any significant costs
on consumers? Please quantify these benefits and costs wherever
possible.
3. Benefits and Costs to Industry Members: What benefits has the
Rule provided to businesses, and does the Rule impose any significant
costs, including costs of compliance, on businesses and in particular
small businesses? Please quantify these benefits and costs wherever
possible.
4. Impact on Information: What impact has the Rule had on the flow
of truthful information to consumers and on the flow of misleading
information to consumers?
5. Compliance: Provide any evidence concerning the degree of
industry compliance with the Rule. Does this evidence indicate that the
Rule should be modified? If so, why and how? If not, why not?
6. Possible Recommended Changes: What modifications, if any, should
the Commission make to the Rule to increase its benefits or reduce its
costs? How would these modifications affect the costs and benefits of
the Rule for consumers? How would these modifications affect the costs
and benefits of the Rule for businesses, and in particular small
businesses?
7. Unnecessary Provisions: Provide any evidence, including
empirical analyses, concerning whether any of the Rule's provisions are
no longer necessary. Explain why these provisions are unnecessary.
8. Additional Unfair or Deceptive Practices: What potentially
unfair or deceptive practices, related to business opportunities and
not covered by the current Rule, are occurring in the marketplace? Are
any such practices prevalent in the market? If so, please describe such
practices, including their impact on consumers. Provide any evidence,
such as empirical data, consumer perception studies, or consumer
reports, that demonstrates the extent of such practices. Provide any
evidence that demonstrates whether such practices cause consumer
injury, and quantify or estimate that injury if possible. With
reference to such practices, should the Rule be modified? If so, why
and how? If not, why not?
9. Rule Coverage: Should the Commission broaden the Rule to include
business or money-making opportunities not currently covered? Provide
any evidence that supports your position. What potentially unfair or
deceptive practices related to business or money-making opportunities
not covered by the Rule are occurring in the marketplace? Are any such
practices prevalent in the market? If so, please describe such
practices, including their impact on consumers. Provide any evidence,
such as empirical data, consumer perception studies, or consumer
reports, that demonstrates the extent of such practices. Provide any
evidence that demonstrates whether such practices cause consumer
injury, and quantify or estimate that injury if possible.
10. Technological or Economic Changes: What modifications, if any,
should be made to the Rule to account for current or impending changes
in technology or economic conditions? How would these modifications
affect the costs and benefits of the Rule for consumers and businesses,
and in particular small businesses?
11. Conflicts with Other Requirements: Does the Rule overlap or
conflict with other federal, state, or local laws or regulations? If
so, how? Provide any evidence that supports your position. With
reference to the asserted conflicts, should the Rule be modified? If
so, why and how? If not, why not? Are there any Rule changes necessary
to help state law enforcement agencies combat unfair or deceptive
practices in the business opportunity market?
12. Other State or Local Laws or Regulations: Are there state or
local laws or regulations that lessen competition or impede consumer
protection in the business opportunity market? Provide any evidence
that supports your position. Should the Commission, through its
advocacy work, encourage changes to these state or local laws or
regulations? If so, what changes?
B. Specific Questions Related to the Business Opportunity Rule
13. Should the Rule be expanded to more broadly include coaching or
mentoring programs,\9\ work-from-home opportunities,\10\ e-commerce
opportunities,\11\ other investment opportunities,\12\ or other types
of business or money-making opportunities not currently covered by the
Business Opportunity Rule? \13\ Why or why not?
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\9\ See, e.g., FTC v. OTA Franchise Corp., No. 8:20-cv-287 (C.D.
Cal. filed 2020); FTC v. <a href="http://Ragingbull.com">Ragingbull.com</a>, LLC, No. 1:20-cv-3538 (D.
Md. filed 2020); FTC v. Zurixx LLC, No. 2:19-cv-713 (D. Utah filed
2019); FTC v. Nudge LLC, No. 2:19-cv-867 (D. Utah filed 2019); FTC
v. Mobe Ltd., No. 6:18-cv-862 (M.D. Fla. filed 2018); FTC v. Digit.
Altitude, No. 2:18-cv-0729 (C.D. Cal. filed 2018).
\10\ See, e.g., FTC v. Moda Latina BZ Inc., No. 2:20-cv-10832
(C.D. Cal. filed 2020); FTC v. 8 Figure Dream Lifestyle LLC, No.
8:19-cv-1165 (C.D. Cal. filed 2019).
\11\ See, e.g., FTC v. Nat'l Web Design, LLC, No. 2:20-cv-846
(D. Utah filed 2020); FTC v. Advert. Strategies, LLC, No. 2:16-cv-
3353 (D. Ariz. filed 2016).
\12\ See, e.g., FTC v. Warrior Trading, No. 3:22-cv-30048 (D.
Mass. filed 2022); SEC v. Senderov, No. 19-cv-5242 (E.D. Wa. filed
2019); SEC v. Peterson, No. 19-cv-8334 (C.D. Cal. filed 2019); In re
Spectrum Concepts LLC, SEC No. 3-16358 (SEC filed 2015); In re
Pankaj Kumar Srivastava, SEC No. 3-1267 (SEC filed 2014); SEC v.
Butts, No. 13-23115 (S.D. Fla. filed 2013); SEC v. Shavers, No.
4:13-cv-416 (E.D. Tex. filed 2013).
\13\ See, e.g., FTC v. Position Gurus, LLC, No. 2:20-cv-710
(filed W.D. Wash. 2020) (marketing and other business-related
services); FTC v. Montano, No. 6:17-cv-2203 (filed M.D. Fla. 2017)
(``automatic money systems'' and ``secret codes''); FTC v. World
Patent Mktg., No. 17-cv-20848 (filed S.D. Fla. 2017) (invention
promotion); FTC v. Blue Saguaro Marketing, LLC, No. 2:16-cv-3406 (D.
Ariz. filed 2016) (grant scheme).
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a. What evidence supports such a modification?
[[Page 72431]]
b. How would this modification affect the costs the Rule imposes on
businesses and, in particular, small businesses?
c. How would this modification benefit consumers?
14. If the Rule is modified, should the Rule's disclosure
requirements be applied to any of the types of money-making
opportunities or business opportunities described in question 13,
above? Why or why not?
a. What evidence supports such a modification?
b. How would this modification affect the costs the Rule imposes on
businesses and, in particular, small businesses?
c. How would this modification benefit consumers?
15. Do any practices of business opportunities or money-making
opportunities, either currently covered or identified in question 13
above, disproportionately target or affect certain communities or
groups, including but not limited to people living in lower-income
communities, communities of color, or other historically underserved
communities? If so, why and how? Provide all evidence that supports
your answer.
16. Should any of the Rule's provisions be amended to avoid
disproportionately affecting certain groups, including but not limited
to people living in lower-income communities, communities of color, or
other historically underserved communities? If so, why and how? If not,
why not?
17. Should any of the Rule's definitions be modified in any way? If
so, how? Provide any evidence that supports your position.
18. Should Rule Sec. 437.2, which requires sellers of a business
opportunity to furnish prospective purchasers with a disclosure
document at least seven calendar days before the earlier of the time
that the prospective purchaser (a) signs any contract in connection
with the business opportunity sale or (b) makes a payment or provides
other consideration to the seller, directly or indirectly through a
third party, be modified in any way? If so, how? What are the benefits
to consumers and costs to businesses, and in particular small
businesses, from the current section or your proposed modification?
Provide all evidence that supports your answer, including any evidence
that quantifies the benefits to consumers and the costs to businesses,
and in particular small businesses.
19. Should Rule Sec. 437.3, which outlines the information that
must be included in the disclosure document and requires sellers to
update their disclosures periodically, be modified in any way? If so,
how? What are the benefits to consumers and costs to businesses, and in
particular small businesses, from the current section or your proposed
modification? Provide all evidence that supports your answer, including
any evidence that quantifies the benefits to consumers and the costs to
businesses, and in particular small businesses.
20. Should Rule Sec. 437.4, which governs earnings claims by
sellers of business opportunities, be modified in any way? If so, how?
What are the benefits to consumers and costs to businesses, and in
particular small businesses, from the current section or your proposed
modification? Provide all evidence that supports your answer, including
any evidence that quantifies the benefits to consumers, and the costs
to businesses, and in particular small businesses.
21. Should Rule Sec. 437.5, which speaks to sales conducted in
languages other than English, be modified in any way? If so, how? What
are the benefits to consumers and costs to businesses, and in
particular small businesses, from the current section or your proposed
modification? Provide all evidence that supports your answer, including
any evidence that quantifies the benefits to consumers and the costs to
businesses, and in particular small businesses.
22. Should Rule Sec. 437.6, which prohibits sellers from engaging
in a number of deceptive practices that are common in the sale of
fraudulent business opportunities, be modified in any way? If so, how?
What are the benefits to consumers and costs to businesses, and in
particular small businesses, from the current section or your proposed
modification or your proposed modification? Provide all evidence that
supports your answer, including any evidence that quantifies the
benefits to consumers and the costs to businesses, and in particular
small businesses.
23. Should Rule Sec. 437.7, which contains the Rule's record
retention requirements, be modified in any way? If so, how? What are
the benefits to consumers and costs to businesses, and in particular
small businesses, from the current section or your proposed
modification? Provide all evidence that supports your answer, including
any evidence that quantifies the benefits to consumers and the costs to
businesses, and in particular small businesses.
24. Should Rule Sec. 437.8, the franchise exemption, be modified
in any way? If so, how? What are the benefits to consumers and costs to
businesses, and in particular small businesses from the current section
or your proposed modification? Provide all evidence that supports your
answer, including any evidence that quantifies the benefits to
consumers and the costs to businesses, and in particular small
businesses.
25. Should Rule Sec. 437.9, which discusses how the Rule interacts
with state law and the effect of the Rule on existing Commission
orders, be modified in any way? If so, how? What are the benefits to
consumers and costs to businesses, and in particular small businesses,
from the current section or your proposed modification? Provide all
evidence that supports your answer, including any evidence that
quantifies the benefits to consumers and the costs to businesses, and
in particular small businesses.
IV. Instructions for Submitting Comments
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before January 24,
2023. Write ``Business Opportunity Rule ANPR, Project No. R511993,'' on
your comment. Your comment, including your name and your state, will be
placed on the public record of this proceeding, including, to the
extent practicable, on <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Because of public health measures and the agency's heightened
security screening, postal mail addressed to the Commission will be
subject to delay. We strongly encourage you to submit your comments
online through <a href="https://www.regulations.gov">https://www.regulations.gov</a>. To ensure the Commission
considers your online comment, please follow the instructions on the
web-based form.
If you file your comment on paper, write ``Business Opportunity
Rule ANPR, Project No. R511993'' on your comment and on the envelope,
and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
CC-5610 (Annex B), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website, <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for
making sure that your comment does not include any sensitive or
confidential information. In particular, your comment should not
include any sensitive personal information such as your or anyone's
Social Security number, date of birth, driver's license number or other
state identification number or foreign country equivalent, passport
number, financial account number, or credit or debit card
[[Page 72432]]
number. You are also solely responsible for making sure that your
comment does not include any sensitive health information, such as
medical records or other individually identifiable health information.
In addition, your comment should not include any ``[t]rade secret or
any commercial or financial information which . . . is privileged or
confidential''--as provided in section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule Sec. 4.10(a)(2), 16 CFR 4.10(a)(2)--including in
particular competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule Sec. 4.9(c). In
particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for
the request, and must identify the specific portions of the comment to
be withheld from the public record. See FTC Rule Sec. 4.9(c). Your
comment will be kept confidential only if the General Counsel grants
your request in accordance with the law and the public interest. Once
your comment has been posted publicly at <a href="https://www.regulations.gov">https://www.regulations.gov</a>--
as legally required by FTC Rule Sec. 4.9(b)--we cannot redact or
remove your comment unless you submit a confidentiality request that
meets the requirements for such treatment under FTC Rule Sec. 4.9(c),
and the General Counsel grants that request.
Visit the FTC website to read this request for comment and the news
release describing it. The FTC Act and other laws that the Commission
administers permit the collection of public comments to consider and
use in this proceeding as appropriate. The Commission will consider all
timely and responsive public comments that it receives on or before
January 24, 2023. For information on the Commission's privacy policy,
including routine uses permitted by the Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
By direction of the Commission.
April J. Tabor,
Secretary.
Note: The following statement will not appear in the Code of
Federal Regulations.
Statement of Chair Lina M. Khan
The Business Opportunity Rule protects Americans from false
promises of easy riches. A business opportunity may be pitched as a way
for a buyer to immediately get a business up and running. The point of
the rule is to make sure people know what they're getting into, with a
realistic sense of how much they're likely to earn. It requires sellers
to honestly disclose key information up front.
The rule has served the public well over the years.\1\ But it's
written in a way that doesn't necessarily capture some business models
and practices that have become more widespread in the decade since it
was last amended. That's why I'm glad to see that the Commission is
seeking public comment on whether to modify the Business Opportunity
Rule. This is the first review since the Commission approved amendments
to the rule in December 2011. A lot has changed since then.
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\1\ See, e.g. Press Release, Fed. Trade Comm'n, Operators of
Business Opportunity Scheme That Falsely Promised Big Earnings Will
be Banned From Offering Any Business or Investment Services, Under
FTC Settlement (July 2, 2021), <a href="https://www.ftc.gov/news-events/news/press-releases/2021/07/operators-business-opportunity-scheme-falsely-promised-big-earnings-will-be-banned-offering-any">https://www.ftc.gov/news-events/news/press-releases/2021/07/operators-business-opportunity-scheme-falsely-promised-big-earnings-will-be-banned-offering-any</a>.
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The ANPR notes several varieties of scams that may fall outside the
scope of the existing rule. These include certain kinds of business
coaching and work-from-home programs, investment programs, and e-
commerce opportunities. A classic example is someone selling an online
course that purports to teach you how to make big profits trading
stocks or cryptocurrency in your home--risk-free. These scams may not
meet the precise definition of a business opportunity under the letter
of the rule. But they can violate its spirit by luring consumers with
false promises of easy money.
Sometimes, the Commission can use other authorities to crack down
on these types of scams. But case-by-case enforcement has key
limitations--especially after the Supreme Court's AMG decision, which
took off the table one of the Commission's most effective ways of
getting money back to consumers harmed by businesses that cheat or
deceive them.\2\ Now, it's difficult for the FTC to seek refunds for
defrauded consumers unless the deception violates an existing rule.
That's one additional reason why it may be especially necessary to
update the Business Opportunity Rule. Keeping rules up-to-date and
relevant is a crucial tool in our effort to protect consumers and
honest businesses alike.
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\2\ AMG Capital Mgmt., LLC. v. FTC, 141 S. Ct. 1341 (2021).
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I am grateful to the FTC staff for their hard work on this matter
and will look forward to reviewing public comments as we determine next
steps.
[FR Doc. 2022-25587 Filed 11-23-22; 8:45 am]
BILLING CODE 6750-01-P
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