| Comment Number: | 522418-10853 |
| Received: | 7/16/2006 11:15:39 PM |
| Organization: | lia sophia |
| Commenter: | Katherine Klinke |
| State: | WI |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
July 16, 2006 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 lia sophia advisor. 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 lia sophia jewerly. I started this for some extra cash. I have been in the business now for 3 years and have built up a team of over 50 ladies and have found myself working it fulltime. It allows me to stay home and raise my 3 children all under the age of 5 and still bring in almost as much money as my husband. We can afford to do what we want – go on vacations, golf, and build a home. We depend on my income and I do not think these are fair to those of us selling in the direct sales industry. This is our job – just like anyone elses! We just get to work our of our homes but we still have working hours. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new lia sophia advisors. Our sales kit only costs $99. 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 lia sophia already has 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 the lia sophia opportunity 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 lia sophia is found guilty. Otherwise, lia sophia and I are put at an unfair advantage even though lia sophia has done nothing wrong. Most of this information, new potential advisors can find online if they want to anyway. Same with information on any other company out there, not just direct sales. 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 lia sophia 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, Katherine Klinke