| Comment Number: | 522418-00585 |
| Received: | 6/2/2006 7:39:45 PM |
| Organization: | Warm Spirit |
| Commenter: | Lorinda Linnen |
| State: | NY |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Lorinda Linnen June 2, 2006 Dear Sir or Madam: I am writing this letter because I am concerned about the proposed Business Opportunity Rule R511993. I believe that in its present form, it could prevent me from continuing as a Warm Spirit Consultant. I understand that part of the FTC’s responsibilities is to protect the public from “unfair and deceptive acts or practices,” yet some of the sections in the proposed rule will make it very difficult, if not impossible, for me to sell Warm Spirit products. Many of our prospective consultants and customers are still becoming familiar with our products and company name. I have been a Warm Spirit consultant 8 months now. In that time I have met so many people who are skeptical about the direct selling business because of people with dishonest business practices that have given this type of business a bad reputation. Well, I must say that our company works hard at keeping it’s integrity and building the trust of our consultants and clients by continuing honest practices. I personally became a consultant because I love the products and I wanted to earn additional income. My business still serves that purpose and more. I am meeting wonderful people and presenting an opportunity for them to better their lives. Those who take advantage of the opportunity appreciate having learned about it. Just like any business owner, I would like to control my own destiny, my income, and the opportunity I can create for my family. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new consultants. Warm Spirit sales kit costs only $99. People buy TVs, cars, and other items that cost much more and they do not have to wait seven days. This waiting period may make prospective consultants suspicious that there might be something wrong with the company or the compensation plan. Under this waiting period requirement, I will need to keep very detailed records when I first speak to someone about my company and will then need to send in many reports to my company headquarters. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. This is a very litigious country. It does not make sense to me that I would have to disclose these lawsuits unless Warm Spirit is found guilty. Otherwise, Warm Spirit and I are put at an unfair advantage even though we have done nothing wrong. Finally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. I am glad to provide references, but in this day of identity theft, I am very uncomfortable giving out the personal information of individuals (without their approval) to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses including those of competitors. In order to get the list of the 10 prior purchasers, I will need to send the address of the prospective purchaser to Warm Spirit headquarters and then wait for the list. I also think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a salesperson - “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People will be reluctant to share their personal information with individuals they may have never met. I appreciate the work that the FTC does to protect consumers, yet I believe this proposed new rule has many unintended consequences and there are less burdensome alternatives available to achieving your goals. Thank you for your time, Lorinda Linnen