| Comment Number: | 522418-00312 |
| Received: | 6/1/2006 2:25:48 PM |
| Organization: | Dance the Dream |
| Commenter: | Jane Cox |
| State: | WA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I am writing to express my strong opposition to the proposed Business Opportunity Rule R511993. I understand that is the responsibility of the Federal Trade Commission to protect the public from "unfair and deceptive acts or practices", but the rule as proposed would make it very difficulty for me to operate my business as a Shaklee Independent Distributor. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new distributors. Most of the people who sign an application do so to purchase Shaklee products at a wholesale price. In other words, they are solely consumers of the products. If they later wish to build a business, all they have to do is supply Shaklee Corporation with a Social Security Number or Tax Identification Number. The Shaklee Member Kit costs only $19.95. This is far less than most consumer purchases, none of which require a seven-day waiting period. The seven-day waiting period is unnecessary in that Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, purcahsed 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 purchaser. There are many problems with this proposed requirement. In this day of identity theft, (I being one whose identity was stolen and after 15 years am still trying to get it straightened out) I am uncomfortable giving out the personal information of other Shaklee distributors, without their knowledge or consent, to strangers. I understand that those who sign up after the 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 not only about identity theft, but also about their privacy. People today are understandably reluctant to share their personal information with individuals they may never have met. Providing the ten references also could damage the businessses of numerous Shaklee distributors. Lower ranking distributors often are involved in more than one direct selling company. Providing a list to a potential recruit, who may already be a distributor for a competing direct selling company, may be an invitation to solicit existing distributors for such other opportunity. The ten reference requirement also is an administrative burden. In order to obtain the list of 10 prior purchasers, I will need to provide Shaklee Corporation with the prospective distributor's address, and then wait to receive the list of the 10 nearest distributors who became distributors within the past three years. Each prospective recruit will need a customized disclosure statement. This will result in a delay far longer than seven calendar 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 specific goal, 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 misrepresantation, or unfair or deceptive practices over a 10-year period. It does not matter if the company was found innocent or not liable. It does not make sense to me that I would have to disclose these lawsuits unless Shaklee Corporation, or its officers, directors or sales department employees, had been found guilty or liable. I have been a Shaklee Distributor for more than 30 years. Originally I became a Distributor because I love the products and wanted to earn some additional income from home. Now I depend on this extra income. I appreciate the work of the FTC, but this proposed new rule has many unintended consequence for direct sellers.