| Comment Number: | 522418-00314 |
| Received: | 6/1/2006 2:31:00 PM |
| Organization: | Shaklee Distributor |
| Commenter: | Wilhelmina Dunkley |
| State: | NY |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
RE: Business Opportunity Rule, R511993 I am writing this letter to express my strong opposition to the proposed Business Opportunity Rule R511993. I understand that it 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 difficult 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 must do is supply Shaklee with their Social Security #, or Tax ID. There is no additional kit, fee or application required. The Shaklee member kit cost $19.95. This is far less than many, if not most consumer purchases from TVs to all manner of household applicances, none of which require a seven-day waiting period. In addition, the seven-day waiting period is unnecessary in that Shaklee Corporation 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 purchaser. There are many problems with this proposed requirement. In this day of identity theft, I am uncomfortable giving out 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 businesses of numerous Shaklee distributors. Lower ranking distributors. Lower ranking distibutors are involved in more than one direct selling company. Providing a list to a potential recruit, who may already be a distibutor for a competing direct selling company, may be an invitation to solicit existing distibutors 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 distibutors who became distributors within the past three years. Ease prospective recruit will need a customized disclosure statement. This will take longer than seven calendar days. The proposed rule calls for release of any infor regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a ten-year period. It does not matter if the company was found innocent or not liable. Today most business lawsuits contain claims of misrepresentation or unfair competition. It does not make sense that I would have to disclose these unless Shaklee or its officers, directors or sales dept. employees were found guilty or liable. A 50 year old company such as Shaklee would be placed at a disadvantage compared to a start-up company. I have only been a Shaklee distributor for 6 months, I did so because I love their products also I am about to retire and want to generate additional income to supplement my Soc. Security and pension. I appreciate the work of the FTC to protect consumer, This rule has many unintended consequences for direct sellers less burdensome alternatives are available to the agency to achieve its goals. W Dunkley