| Comment Number: | 522418-02450 |
| Received: | 6/15/2006 9:11:40 PM |
| Organization: | Business Builders, LLC |
| Commenter: | Michael Zimmer |
| State: | CT |
| 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 this letter because I am concerned about the proposed Business Opportunity Rule R511993. I believe that in its present form, it could prevent me from continuing as a Nu Skin Enterprises distributor. I understand that part of the FTC’s responsibilities is to protect the public from “unfair and deceptive acts or practices,” yet some of the sections in the proposed rule will make it very difficult, if not impossible, for me to sell NSE products. I have been with NSE for over 4 years now and this is the third time I have been involved with direct sales companies. I have remained in this industry for two reasons: It is wonderful to be able to help people start and run a business of their own; reputable direct sales companies offer superior products and services at competitive prices. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new consultants. NSE’s sales kit is discounted from wholesale and only cost $199. People buy TVs, cars, and other items that cost much more and they do not have to wait seven days. This waiting period gives the impression that there might be something wrong with the company or the compensation plan. I also think this seven-day waiting period is unnecessary, because NSE already has a 100% buyback policy within 30 days and a 90% buyback policy for all products including sales kits purchased by a salesperson within the last twelve months. Under this waiting period requirement, I will need to keep very detailed records when I first speak to someone about NSE and will then need to send in many reports to my company headquarters. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. Today, anyone or any company can be sued for almost anything. It does not make sense to me that I would have to disclose these lawsuits unless NSE is found guilty. Otherwise, NSE and I are put at an unfair disadvantage even though NSE has done nothing wrong. Finally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. I am glad to provide references, but in this day of identity theft, I am very uncomfortable giving out the personal information of individuals (without their approval) to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses including those of competitors. In order to get the list of the 10 prior purchasers, I will need to send the address of the prospective purchaser to NSE’s headquarters and then wait for the list. I also think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a salesperson - “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People are very concerned about their privacy and identity theft. They will be reluctant to share their personal information with individuals they may have never met. I appreciate the work that the FTC does to protect consumers, yet I believe this proposed new rule has many unintended consequences and there are less burdensome alternatives available to achieving your goals. Thank you for your time in considering my comments. Respectfully, Michael J. Zimmer