| Comment Number: | 522418-00660 |
| Received: | 6/3/2006 2:54:15 PM |
| Organization: | Healthnuts |
| Commenter: | Jon Lea |
| State: | IN |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
To Whom it May Concern, I am writing this letter to express my strong opposition to the proposed Business Opportunity Rule R511993. I understand that the responsibility of the Federal Trade Commission is 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. One of the most confusing and burdensome sections of the proposed rule is the 7 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 soley consumers of the products. If they later wish to build a business, all they must do is supply Shaklee Corp. with their SSN or TIN. 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 goods, none of which require a 7 day waiting period. In addition, the 7 day waiting period is unecessary in that Shaklee Corp already has a 90% buyback policy for products, including the member kit, purchased by a distributor within the last 2 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 infromation f 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."I believe that this would dissuade new people from signing up as distributors as they are concerned not onlt about identity theft, but also about their privacy. People today are understandably reluctant to share their personal information with individuals they may have never met. Providing the 10 references also could damage the businesses of numerous Shaklee Distributors. Lower ranking distributors often are involved in more than 1 direct selling company. Providing a list to a potential recruit, who may already be a distributor for a competeing direct selling company, may be an invitation to solicit existing distributors for such other opportunity. The 10 reference requirement also is an administrative burden. In order to obtain the list of 10 prior purchasers, I will need to provide Shaklee Corp with the prospective distributor's address, and then wait to receive the list of the 10 nearest distributors who became so within the past 3 years. This will result in a delay far longer than 7 calender 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 the long wait which the proposed rule will entail may make the goal unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair and deceptive practices over a 10 year period. It doesn't matter if the company was innocent or not liable. It doesn't make sense to have to disclose this information if there wasn't a guilty party in the lawsuit. Otherwise, 50 year companies like Shaklee and their distributors would be placed at a disadvantage to start up companies who have no history in litigation. Me and my wife Barb have been in Shaklee for 1 year. We started in Shaklee for the wonderful products they offer, but saw the tremendous income opportunity so we became distibutors. Now we depend on this income to support our family of 6 kids. The consequences of passing this rule will ultimately destroy the network marketing industry and therefore the economy as well. Thank you for considering my concerns. Sincerely, Jon Lea