Legal Translation to Comply with Business Opportunity Rule

Legal translation services play an important role in protecting the rights of limited-English-speaking consumers. According to the Business Opportunity Rule, issued by the Federal Trade Commission (FTC) as 16 CFR Part 437, business opportunity sellers must provide prospective purchasers with material information needed to combat fraud and that would prohibit other acts or practices that are unfair or deceptive from occurring. This rule was explicitly created to help protect non-English speakers from business opportunity fraud. Thus, if a non-English-speaking client finds themselves in a potentially fraudulent business opportunity, one should look to see if the Seller provided foreign language translations of all business contracts and documentation. If not, this should be used as evidence according to this Rule.

Although these issues are covered by the FTC‘s Franchise Rule, with the Internet age many new online business opportunities fell outside of its jurisdiction (multilevel marketing, seller assisted market plans, work-at-home plans, certain distributorships and licenses).

The Business Opportunity Rule requires specific disclosures to be made, including:

  • The business opportunity seller must state whether the seller chooses to make earnings claims and, if so, then substantiation and additional disclosures are required;
  • Seller’s history of prior litigation;
  • Cancellation or refund policies;
  • Statistics on cancellation and refund requests;
  • Contact information for prior purchasers as references.

Further, the rule prohibits such deceptive practices as misrepresenting earnings, costs or characteristics of the goods or services sold, cancellation or refund policies, promised assistance, calculation and distribution of commissions/bonuses/incentives, likelihood of finding locations for the equipment or accounts for services, a business opportunity as an offer of employment, territorial exclusivity or more limited territorial protections and endorsement as references.

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