Comment Number: 522418-00177
Received: 6/1/2006 8:26:29 AM
Organization: Living Well-The Powell Group
Commenter: Kathy Powell
State: GA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I am strongly opposed to the proposed Business Opportunity Rule 8511993. I understand the FTC's intention to protect the public from unfair and deceptive acts or practices, but the rule as proposed would create an undue burden on me as I operate my business as a Shaklee Independent Distributor. The 7day waiting period to enroll new distributors is most confusing and burdensome because most of the new people that I sign up are solely interested in being consumers of the product, and want to purchase products at a wholesale price.They supply their SSN or EIN, and no further kit, fee or application is required. There is a new member kit provided to them for $19.95, which is a very affordable consumer purchase relative to others, and most of those do not require a 7 day waiting period. Shaklee Corporation already has a 90% buy back policy for products, including the Member Kit, purchased by a distributor within the last two years.The proposed disclosure of ten prior purchasers nearest to the prospective purchaser creates many problems for me as a distributer, not the least of which involves consumer concerns over identiy theft. I believe that many new prospects would hesitate to have their information disclosed to other buyers as this rule allows. I certainly would have been hesitant more than 10 years ago to allow my information to be shared, and even more so, today. Providing ten references could damage the businesses of many Shaklee distributors, because often lower ranking distributors may be invloved in more than one direct selling company. Providing a list of refernces to a potential recruit may be an invitation for them to solicit existing distributors for other such opportunities. the ten reference requirement would also put an undue administrative burden on my business. Our business is a home-based, part-time enterprise; 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 distributors within the past 3 years. Each prospective recruit would need a customized disclosure statement, which would result in a delay far longer than seven calendar days before any potential recruit could sign an application. Most people enter direct selling part-time to earn extra income for a specific goal, such as a holiday purchase or a family vacation,and a long wait may make that goal unattainable. The proposed rule also calls for the release of any information regarding lawsuits that allege misrepresentaion, unfair or deceptive practices over the past 10 years, whether or not the company was foud innocent or liable. Today, most business lawsuits contain claims of misrepresentation or unfair competition. It doen't make sense to me that I woudl have to disclose these lawsuits unless Shaklee Corporation or its direct agents were found guilty or liable. Companies such a Shaklee, which have been around for 50 years, would be placed at a disadvantage over start-up direct-selling companies, which may not yet have experienced litigation but which may have far greater risk for legal issues surrounding their opportunities. I have been a Shaklee distributor for over ten years.I origianlly became involved with Shaklee because I loved the nutritional and personal care products and they greatly benefited me and my family. Now my family has come to depend upon this extra income in order to supplement our budget. I appreciate the work of the FTC to protect consumers, but I believe that this propsed new rule has many unintenended consequences for direct sellers,, and theat there are less burdensome alternatives available to the agency to achieve its goals. Thank you for your time in considering my concerns.