They simplify the disclosures that sellers of business opportunities must offer prospective buyers, which helps them evaluate the risks. The FTC promises the new rules will also minimise the compliance burdens on organisations offering business opportunities.

The latest regulations will assist merchandise and bulk vending operators. Although new business categories and equipment have flourished within the industry, unprincipled promoters selling inferior equipment and making unrealistic income predictions have long plagued it.

Sellers will have to disclose five key details in a one-page document:

•  More identity information, including their name, business location and phone number.

•  Supporting information for earnings claims, including the number and percentage of people who achieved that level.

•  All legal actions alleging fraud or misrepresentation taken against them, their affiliates or “key personnel”.

•  Greater details about cancellation and refund policies.

•  References’ names and contact information if they participated within the prior three years.

Misrepresentations and omissions are illegal; and all disclosures must be written in the same language as the sale.

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