|Received:||6/4/2006 7:15:02 PM|
|Organization:||Shaklee Independent Distributor|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I am 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 the rule as proposed would make it very difficult for me to operate my business as a Shaklee Independent Distributor. One of the most burdensome sections of the proposed rule is the 7-day waiting period to enroll distributors. Most people who sign an application do so to buy our products wholesale; they are solely consumers. If they later wish to build a business, all they must do is supply Shaklee Corporation with their Social Security Number or Tax ID Number. There is no additional kit, fee or application required. The Shaklee Member Kit costs only $19.95, far less than most consumer purchases, from TVs to household appliances, none of which require a 7-day wait. In addition, the 7-day wait is unnecessary in that Shaklee Corporation has a 90% buyback policy for products, including the Member Kit, purchased by a distributor in the last 2 years. The proposed rule requires disclosure of 10 prior purchasers near the prospective purchaser. There are many problems with this requirement. In this day of identity theft, I am uncomfortable giving out other Shaklee distributors' personal information, 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 due to concerns about identity theft and privacy. People today are understandably reluctant to share their personal information with strangers. Providing the 10 references also could damage numerous Shaklee distributors' businesses. Lower ranking distributors can be involved in more than one direct selling company. Giving a list to a recruit, who may already be a distributor for a competing direct selling company, may be an invitation to solicit existing distributors for other such opportunities. A 10 reference requirement is an administrative burden. To get the list of 10 prior purchasers, I will need to give Shaklee Corp. the prospective distributor's address, and then wait to receive the list of the 10 nearest distributors who became distributors within the past 3 years. Each prospective recruit will need a customized disclosure statement. This will cause a delay longer than 7 days. Because 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 the proposed rule entails may make the goal unattainable. The rule calls for release of information about lawsuits alleging misrepresentation or unfair or deceptive practices over a 10-year period, even if the company was found innocent or not liable. Most business lawsuits have claims of misrepresentation or unfair competition. It does not make sense to me that I would have to disclose such lawsuits unless Shaklee Corp., or its officers, directors or sales employees, had been found guilty or liable. Otherwise, 50-year old companies such as Shaklee Corp. 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. I have been a Shaklee Distributor for 16 years. Originally, I became a Distributor because I love the Company's nutritional/personal care/household products and wanted to earn some additional income working from home. The extra income is a big help to our family. I believe this proposed new rule has many unintended consequences for direct sellers and that there are less burdensome alternatives available to the agency to achieve its goals.