| Comment Number: | 522418-01683 |
| Received: | 6/10/2006 6:43:37 AM |
| Organization: | |
| Commenter: | Nikki Roth-Skiles |
| State: | PA |
| 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 because I am concerned about the proposed Business Opportunity Rule R511993. While I understand the responsibilities of the FTC to protect the public from “unfair and deceptive acts or practices,” I believe that this proposed rule could prevent me from becoming a serious distributor for Young Living Essential Oils. There are specific sections in the proposed rule that will make it very difficult, if not impossible, for me to sell Young Living's products. The vast majority of Young Living distributors promote the purchase of product rather than any business opportunity. I became involved with this company because I felt the products were exceptional. Through Young Living, I have developed leadership skills and cultivated many meaningful relationships. My family and I enjoy the health benefits of using these products daily. Seven-Day Waiting Period One of the most confusing sections of the proposed rule is the seven-day waiting period to enroll new distributors. Young Living's Starter Kits cost only $50.00, and each kit contains products, samples, training materials, etc., worth far more than the sale price. When a Starter Kit is purchased, the purchaser becomes a distributor and is granted special discounted pricing on all orders. No commissions or other compensation is paid on these kits, and the company just covers its production costs. Having this waiting period gives the impression that there might be something wrong with the company or the compensation plan. I think this seven-day waiting period is unnecessary because Young Living fully refunds this cost if the customer decides to send it back. Requiring a seven-day waiting period before a distributor is allowed to even place an order would be destructive to the businesses of thousands of distributors who are building a business around Young Living's products. It would also be burdensome to keep detailed records of when I spoke with every single person about Young Living, and would create lots of unnecessary paperwork to have to send these reports to company headquarters. Litigation Information The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation or unfair or deceptive practices, regardless of whether the company was found innocent or not. Today, anyone or any company can be sued for almost anything. It does not make sense to me that I would have to disclose these lawsuits unless Young Living were found guilty. Otherwise, this company and I are put at an unfair disadvantage even though the company has done nothing wrong. To release this information would be misleading to prospective distributors. References The proposed rule requires the disclosure of a minimum of ten 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, particularly 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 ten prior purchasers, I would need to send the address of the prospective purchaser to Young Living headquarters and then wait to receive the list. I think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a distributor: “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People are very concerned about their privacy and identity theft. They will be reluctant to share their personal information with individuals they may have never met. Further, Young Living simply does not sell “business opportunities” in this fashion. I believe this proposed new rule has many unintended consequences, and there are less burdensome alternatives available to achieving your goals.