| Comment Number: | 522418-00296 |
| Received: | 6/1/2006 1:24:09 PM |
| Organization: | |
| Commenter: | VICTORIA RIZZI |
| State: | VA |
| 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 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 Shaklee Independent Distributor. I have been a Shaklee Distributor for more than 20 years. I became a Shaklee Distributor because I love the Company's unique nutritional/personal care/household products and wanted to earn some additional income working from home. Now this income has become my livelihood. While I appreciate the work of the FTC to protect consumers, I believe the proposed new Rule, R511993, has many unintended consequences for direct sellers and that there are less burdensome alternatives available to the agency to achieve its goals. As a taxpayer, I expect more responsibility from my gov’t agencies than adding additional bureaucratic nonsense. This “Rule” will accomplish nothing other than to punish reputable mlm’s for the indiscretions of non reputable companies. The government can not protect consumers from their own greed and idiocy. Thus the motto, “Caveat Emptor”! There are more restrictions in this plan than there are protections when buying a car or a home. I want to know who is the driving force behind this legislation which makes no sense? 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. 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, without their knowledge or consent, to strangers, nor will any smart consumer allow that. As a consumer, myself, I would never allow my personal info to be disclosed under these conditions. 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." This would surely 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. Nor should they have to be concerned about such a nonsensical breach of security. 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. In order to obtain the list of 10 prior purchasers, I would 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 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. Is that your real intent, to destroy the American dream of a home based business? 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. It does not make sense to me 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. Otherwise, fifty-year old companies such as Shaklee Corporation, with unparalleled integrity, 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. It is my expectation as a US taxpayer that you will not continue to waste seriously depleted tax dollars pursuing this irresponsible and lengthy “Rule”, and will instead give more thought to how you use those tax dollars in the future. That sentiment does not depend on whether or not I am a Shaklee distributor but comes from my frustration with overall pork barrel spending. I will also be sending a copy of this to our President and to my Senators and Congress person. Sincerely, VICTORIA RIZZI