| Comment Number: | 522418-00368 |
| Received: | 6/1/2006 6:24:19 PM |
| Organization: | Shaklee |
| Commenter: | Russell Maples |
| State: | ID |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I'm writing this letter to express my strong opposition to the proposed Business Opportunity Rule R511993. I understand it's the responsibility of the FTC to protect the public from "unfair and deceptive acts or practices," but this rule as proposed would be excessively burdensome and wouldn't be likely to accomplish much to protect the public. One confusing and burdensome section of the proposed rule is the 7-day waiting period to enroll distributors. Most people who sign our application do so to purchase Shaklee products at a wholesale price. In other words, they're just consumers. If they later wish to build a business, they just need to supply Shaklee with their SS# or Tax ID#. There's no additional fee required. The Member Kit costs $19.95, far less than other consumer purchases which don't require a waiting period. And the waiting period is unnecessary in that Shaklee already has a 90% buyback policy for products, including the Member Kit, purchased by a distributor within the last 2 years. By nature, a direct sales company like ours doesn't rely on the impulse buys and pressure sales of storefront retail environments. Most direct sales customers already wait a few days for their orders, and can cancel their order, or return it for a refund. Extending the wait doesn’t protect the consumer, but it might drive them to a storefront where a salesperson is waiting to play on their emotions and dig a little deeper into their wallet. The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. In this day of identity theft, I'm uncomfortable giving out the personal information of other Shaklee distributors. 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." I believe this would dissuade people from signing up, as they're concerned about identity theft and their privacy. People are understandably reluctant to share their personal information. The proposed rule calls for the release of information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a 10-year period. It doesn't matter if the company was found innocent or not liable. Today almost all business lawsuits contain claims of misrepresentation or unfair competition. It doesn't make sense to me that we'd have to disclose these lawsuits unless Shaklee Corporation, its officers, directors or employees, had been found guilty or liable. Otherwise, 50-year-old companies like Shaklee and their distributors would be at a disadvantage compared to start-up companies, which may not yet have experienced litigation but are far more likely to have genuine legal issues surrounding them. In the past year, I've come to love Shaklee and its products. I haven't seen the corporate morality, values, and integrity of Shaklee anywhere else; not at WalMart, McDonald’s, Chevrolet.... nowhere. If you feel it's so vital to protect people from themselves wouldn’t it make sense to extend it to ALL businesses? Our customers can purchase a membership for $19.95 and get a 15% discount. These same customers can purchase a Sams Club or Cosco membership with no waiting period. Should we ask Cosco to provide them 10 names of local customers so they can call them and see if they felt they got value from their Cosco Card? I’m currently in the market for a car. I’m looking at spending thousands of dollars and not one car lot has given me the names of 10 recent customers and then told me to wait a week to buy anything. When I go to WalMart they don’t have contact information for customers posted, and they don't make me give them a list of what I want and come back in 7 days to pick it up. If they did, those little items near the register would likely never sell. I appreciate the work of the FTC to protect consumers, but do not believe this rule would help.