Comment Number: 522418-00283
Received: 6/1/2006 12:43:02 PM
Organization:
Commenter: Jerry Evelsizer
State: IA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Jerry and Mary Evelsizer  June 1, 2006 To the Federal Trade Commission/Office of the Secretary, Room H-135 (Annex W) 600 Pennsylvania Avenue, NW Washington, DC 20580 Re: Business Opportunity Rule, R511993 We want to express our 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 us to operate our business as Shaklee Independent Distributors. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new distributors. Most of the people who sign an application do so to purchase Shaklee products at a wholesale price. In other words, they are solely 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 or 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 that Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, purchased 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. In this day of identity theft, we will not give out the personal information of other Shaklee 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." We 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. Providing the ten references also 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 competing direct selling company, may be an invitation to solicit existing distributors for such other opportunity. The ten reference requirement also is an administrative burden. 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. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices. Fifty-year old companies such as Shaklee Corporation and their distributors would be placed at a disadvantage compared to start-up direct selling companies, which may not yet have experienced litigation but which are far more likely to have legal issues surrounding their opportunities. We have been Shaklee Distributors for more than 25 years. Originally, we became Shaklee Distributors because we love the Company's nutritional/personal care/household products and wanted to earn some additional income working from home. Now we depend upon this extra income to supplement our budget. While we appreciate the work of the FTC to protect consumers, we believe this proposed new rule has many unintended consequences for direct sellers. We believe you have the expertise to develop less burdensome alternatives to achieve those goals. Thank you for your time in considering our comments. Sincerely, Jerry and Mary Evelsizer