| Comment Number: | 522418-00282 |
| Received: | 6/1/2006 12:38:48 PM |
| Organization: | |
| Commenter: | Sandra Holder |
| State: | FL |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Dear Sir or Madam: I am writing this letter to express my opposition to the proposed Business opportunity Rule R511993 I understand that it is the responsibility of the FTC to protect the public from "deceptive acts or practices", but the rule as proposed would make it extremely difficult to operate my business as a Shaklee Independent Distributor. One of the most difficult sections of the proposed rule is the seven-day waiting period. Most who sign a membership application only want to purchase Shaklee products at a wholesale price. If they decide later to build a business, all they need to provide Shaklee is a Social Security or TIN. There is no additional cost required. Shaklee's Membership Kit costs only $19.95. This is far less than most comsumer purchases, from TV's to all sorts of household appliances, none of which require a seven-day waiting period. In addition, the seven-day waiting period is unnecessary because Shaklee already has a 90% buyback policy for products, including the Member Kit, purchased by a distributor within the last two years. The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective buyer. There are many problems with this proposed requirement. In this day of identity theft, I am uncomfortable giving out the personal information of distributors, without their consent or knowledge, to strangers. I certainly would not want mine given out. I understand that those who sign up after the proposed rule takes effect would be told in writing "If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers". I believe that this would dissuade new people from signing up as distributors as they are concerned about identity theft, but also their privacy. People are reluctant to share their personal information with individuals they do not know. Providing the ten references also could damage the businesses of many Shaklee distributors. Lower ranking distributors are often involved in more than one direct selling company. Providing a list to a potential recruit, who may already be a distributor for another direct selling company, may be an invitation to solicit existing distributors for this other opportunity. The ten references requirement also is an administration burden. This is true because I will need to provide Shaklee with the prospective distributor's address, and then wait to receive the list of the ten nearest distributors. Each prospective recruit will need a customized disclose statement. This will result is a delay far longer than the seven days before any potential recruit can sign an application. In view of the fact that many people enter direct selling part-time to earn extra income for a special goal, such as holiday purchases or a family vacation, the long wait which the proposed rule will entail may make the goal unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, unfair or deceptive practices over a 10-year period. It does not matter if the company was found innocent or not liable. Today, almost all business lawsuits contain claims of misrepresentaion or unfair competition. It does not make sense to me that I would have to disclose these lawsuits unless Shaklee Corporation was found guilty or liable. Fifty-year old companies like Shaklee Corporation and their distributors would be placed at a disadvantage compared to start-up direct selling companies, which may not yet experienced litigation but which are far more likely to have legal issues surrounding their opportunities. I have been a Shaklee Distributor for 28 years. While I appreciate the work of the FTC, I believe this proposed rule has many unintended consequences and that there are less burdensome alternatives available to the agency to achieve its goals. Thank you for your time. S. Holder