| Comment Number: | 522418-01375 |
| Received: | 6/7/2006 10:46:18 PM |
| Organization: | Scent-Sations ....Mia Bella Candles dba acushlacandles |
| Commenter: | Larry Holaday |
| State: | AL |
| 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 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 Scent-Sations Inc Independent Distributor. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new distributors.. If anyone wishes to become a Scent-Sations Distributor they simply fill out an application which is free to do. There is no additional kit or fee required. This is far less than many, if not most, consumer purchases, from TVs to all manner of household appliances, none of which require a seven-day waiting period. In addition, the seven-day waiting period is unnecessary in that Scent-Sations Inc already has a 90% buyback policy for products! 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 the personal information of other Scent-Sations 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. The ten reference requirement also is an administrative burden. In order to obtain the list of 10 prior purchasers, I will need to provide Scent-Sations 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, such as holiday purchases or a family vacation, the long wait which the proposed rule will entail may make the goal unattainable. Also you have to be of legal age to enter into a contract and I think that it is up to the individual to do the due diligence in exploring an opportunity. We already have the 72 hr "cooling off" period where a person can change their mind and with the internet it is very easy to research an opportunity. The proposed rule calls for the release of any information 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, almost all business lawsuits contain claims of misrepresentation or unfair competition. I wonder if GE or Proctor & Gamble could stay in business if they had to tell every consumer about every lawsuit they were involved in.Seems to me that what is fair for one industry should be fair for all. I have been a Scent-Sations Distributor for less than 2 months. Originally, I became a Scent-sations Distributor because I did my homework on both the product and the company.Already the money we are making is part of our budget and it is nice to have money left over at the end of the month. Yes I agree there are way too many companies that promise the world and deliver nothing and we need to find ways protect people from unscrupulous companies.I do not believe that this proposed legislation is the answer. I believe that it will have opposite effect than what is intended.Ethical companies will be burdened by this legislation while companies that are problems now will just dummy up reports to show prospective partners that will satisfy the requirements. While I appreciate the work of the FTC to protect consumers, I believe this proposed new rule has many unintended consequences for direct sellers and that there are less burdensome alternatives available to the agency to achieve its goals. Thank you for your time in considering my comments. Sincerely, Larry Holaday