Basically, the FTC is proposing new rules for multi-level marketers, which is the category that I believe Mary Kay falls into.
In April, citing hundreds of fraud investigations, the F.T.C. proposed new rules for multilevel marketing companies and related businesses. They would require companies to tell potential recruits how many sales representatives have failed to earn more than their start-up costs and how many customers have filed lawsuits for deceptive practices.
The proposal, which may be modified and could take as long as two years before approval, also requires a weeklong waiting period between approaching new sales representatives and sealing the deal.
If Mary Kay reps had to tell potential new recruits that they are not likely to earn their money back should they choose to buy a full inventory, you'd get a lot less people buying full inventories at the start of their Mary Kay careers, whether they were going to be long or short careers. And that would definitely take a few pink Cadillacs off the road. Ouch.
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