| Comment Number: | 522418-08097 |
| Received: | 7/12/2006 11:53:10 AM |
| Organization: | Independent Distributor of Shaklee Products |
| Commenter: | Dick Hoffman |
| State: | TX |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I STRONGLY OPPOSE the proposed Business Opportunity Rule R511993. In trying to protect the public from unfair and deceptive acts or practices, the FTC must not forget the law of unintended consequences. The proposed rule is so overly protective that its main consequence would be to destroy opportunities for low- and moderate-income individuals and families to become entrepreneurs. The proposed rule reads as if it were written by lobbyists for traditional retailers (such as WalMart and its ilk) to scare people away from the competition of network marketing. As a result, many mothers would miss an opportunity to stay at home with their children and still contribute to the family's finances. Many people would have no chance to transition from jobs they hate to businesses they love. Many retirees would be more dependent on the government because they would have no chance to earn extra income at their own pace. A burdensome section of the proposed rule is the 7-day waiting period to enroll new distributors. Most of the people who sign a Shaklee application are consumers of the products. If they later wish to build a business, all they must do is supply their SSN or Tax ID Number. No additional kit, fee or application is required. The Shaklee Member Kit costs only $19.95. This is far less than most consumer purchases, from TVs to all manner of household appliances, none of which require a waiting period. The waiting period is also unnecessary in that Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, purchased by a distributor within the last 2 years. Re the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. In this day of identity theft, giving out the personal information of other Shaklee distributors, without their knowledge or consent, is wrong. I understand that those who sign up after the rule takes effect would be told of this in writing. This would dissuade new people from signing up as distributors as they are concerned not only about identity theft, but also about their privacy. Providing the 10 references also could 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, 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 10 reference requirement is an administrative burden. To obtain the list of 10 prior purchasers, I will need to provide Shaklee Corporation with the prospective distributor's address, and 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 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 a family vacation. The wait which the proposed rule creates 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 10-year period. 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-year old companies such as Shaklee would be at a disadvantage compared to start-up companies, which may not yet have experienced litigation but are far more likely to have legal issues surrounding their opportunities. The proposed rule would be punitive to a company that has spent 50 years contributing to the health and well-being of this nation. I became a Shaklee Distributor because I love the products. Now that I am of retirement age, my family depends upon this extra income. Dick Hoffman