Comment Number: 522418-01916
Received: 6/12/2006 7:46:09 PM
Organization:
Commenter: Louise Rees
State: IL
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Dear Sir or Madam: I am writing in strong opposition to the proposed Business Opportunity Rule R511993. I understand that the Federal Trade Commission has an obligation to protect the public from "unfair and deceptive acts or practices" but that rule, as stated, would make it extremely difficult for our family to operate our business as Shaklee Independent Distributors. A particularly difficult section of the proposed rule is the 7-day waiting period to enroll new distributors. Most of those who sign a Shaklee application are consumers of the product. Some may later wish to build a business and at that time they must supply their Social Security Number or Tax Identification number. No additional kit, fee or application is required. The Shaklee Member Kit costs only $19.95, far less than most consumer purchases, whether TVs, applicances, or sound equipment, etc., none of which require a waiting period. In addition, Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, if purchased within the last 2 years. This is a built-in "waiting period". The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. Because of the dangers of identify theft, I would not want to be forced to give out the personal information of other Shaklee distributors without information or consent. I understand that those who sign up after the proposed rule would take effect would be told in wirting"If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers". This causes concern not only about identify theft, but also about privacy issues. Providing 10 references could also damage the businesses of Shaklee distributors. Lower ranking distributors often are involved in more than one direct selling company. Providing a list to a potential recruit may be an invitation to solicit existing distributors for such other opportunities. The 10-reference requirement is also 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 wait to receive the list of distributors who signed applications within the past 3 years. This will result in delays far longer than 7 calendar days before anyone can sign an application. Many people enter direct selling to earn extra income for a specific goal such as holiday purchases or vacations. This wait would make the goal unattainable. The proposed rule also calls for the release of any information regarding lawsuits that allege misrepresentation or unfair and deceptive practices over a 10-year period. It does not matter that the company was found innocent or not liable. In these days of "junk" lawsuits, 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. Fifty-one year old companies such as Shaklee would be at a disadvantage compared to start-up companies, which have not yet experienced litigation but are far more likely to have legal issues surrounding their opportuntiies than a tried and true company. My husband and I have been Shaklee Distributors for more than 27 years. I first fell in love with the Shaklee nutritional and household products and later wanted to earn additional money to supplement our family income. Now we are close to retirement and depend upon this extra income for our livelihood. This new rule would cause a real hardship for us. Thank you for considering my comments. Sincerely, Louise E. Rees