The Federal Trade Commission has approved changes to its Business Opportunity Rule that will ensure consumers have the information they need when considering buying a work-at-home program or any other business opportunity. The changes simplify the disclosures that business opportunity sellers must provide to prospective buyers. The new disclosures will help prospective purchasers assess the risks of buying a business opportunity, while minimizing compliance burdens on businesses.
In addition, the Final Rule, which will be 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:
- the seller's identifying information;
- 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);
- whether the seller, its affiliates or key personnel have been involved in certain legal actions (and, if yes, a separate list of those actions);
- whether the seller has a cancellation or refund policy (and, if yes, a separate document stating the material terms of such policies); and
- a list of persons who bought the business opportunity within the previous three years.
Misrepresentations and omissions are prohibited under the Rule. For sales conducted in languages other than English, all disclosures must be provided in the language in which the sale is conducted.