| Comment Number: | 522418-02862 |
| Received: | 6/16/2006 3:36:31 PM |
| Organization: | 4-D Nature's Way |
| Commenter: | Ruth Daube |
| State: | IL |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Federal Trade Commission Office of the Secretary, Room H-135 (Annex W)600 Pennsylvania Avenue, NW Washington, DC 20580 Re: Business Opportunity Rule, R511993 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 FTC 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. The 7-day waiting period to enroll new distributors would be difficult in that most of the people who sign an application do so to purchase Shaklee products at a wholesale price. They are mostly just consumers of the products. If they later wish to build a business, all they must do is supply Shaklee Corporation with their Social Security Number of Tax Identification Number. There is no additional kit, fee or application required. The Shaklee Member Kit costs only $19.95. 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 tht Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, purcased 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 the personal information of other Shaklee distributors, wihout their knowledge or consent, to strangers. I understand tht those who signup after the rule takes effect would be told in writing "If you buy a business opportunity form the seller, your contat informtion 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 als could damage the businesses 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 cometing 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 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 year. 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. This would be quite a handicap. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation or unfair competition. It does not make sense tome 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 about 25 years, love the business because we are helping people in many different ways. The proposed rules would greatly handicap my time in doing the business. I also do the business to help my family with additional income. Without it we would be in economic difficulties! I realize FTC wants to protect consumers, but I believe this proposed new rule would have many unintended consequences. Thank you for considering my comments. Sincerely yours, Ruth Daube