Comment Number: 522418-01258
Received: 6/7/2006 12:57:39 PM
Organization:
Commenter: Pamela Boone
State: AL
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

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 Scent-Sations Inc Independent Distributor. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new distributors.. If anyone wishes to become a Scent-Sations Distributor they simply fill out an application which is free to do. There is no additional kit or fee required. 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 Scent-Sations Inc already has a 90% buyback policy for products! 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 Scent-Sations 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 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. Providing the ten references also could damage the businesses of numerous Scent-Sations 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 will need to provide Scent-Sations 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. 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 Scent-Sations Corporation, or its officers, directors or sales department employees, had been found guilty or liable. I have been a Scent-Sations Distributor for less than one year. Originally, I became a S Distributor because I love the Company's Candles and Personal Care products and wanted to earn some additional income working from home. Now I depend upon this extra income to supplement my husband's earnings as a truck driver. He is a Disabled Army Veteran who has does not recieve benefits due to recieving a small severance pay when he was Honorably Discharged from the Army after 4 years of service. While I appreciate the work of the FTC to protect consumers, 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. One idea would be a database set up by the government and FTC and have such companies register with this database. This would require companies that wish to advertise this type of business, to provide proven results and that they are not a scam business. They would have to provide proof that they have actual consumeable products for sale and that people signing on with that company would have the ability to sell such products. Of course as with any sales company, you are not guaranteed income, if you do not sell product. The idea is right on, I as a Work at Home Mom see the scams on a daily basis. I completely understand the need to protect people. There are scams right now being run that say for example, send me 50 dollars then forward this information to everyone you know with your name on top so they all send you 50 dollars, etc. This type of scam obviously needs to be stopped. But reputable companies, such as Mia Bella, or the many others I represent, should not be punished for these scam artists. It is also possible that instead of imposing such rules on us, hard working honest companies, you could impose stronger consequences on those that DO make a living by scamming others. If you go through with this ruling, you will ruin the opportunity for mothers like myself to stay home and raise our own children, instead of having to pay a daycare provider to raise our children for us while we are working outside of the home, making meager salaries that only serve to pay the daycare provider. It will very possibly force many homes onto welfare. The extra income I earn now, helps to provide food, clothing, and extras for my children. I am untrained and uneducated. If I have to return to the outside work force, I will not make more than minimum wage, and will be forced to ask the state and federal governments for help. Right now, I recieve no benefits, and I would like to keep it that way. I sincerely appreciate you giving me the time to voice my concerns. Thank you for your time in considering my comments. Sincerely, Pamela Boone