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Part 3. Conduct Toward Direct Sellers

3.1 Direct Sellers' Compliance

Companies shall require their Direct Sellers, as a condition of membership in the Company's distribution system, to comply with the standards of this Code.

3.2 Recruiting

Companies shall not use misleading, deceptive or unfair recruiting practices in their interaction with prospective or existing Direct Sellers.

3.3 Business Information

Information provided by Companies to prospective or existing Direct Sellers concerning the opportunity and related rights and obligations shall be accurate and complete. Companies shall not make any factual representation to a prospective Direct Seller that cannot be verified or make any promise that cannot be fulfilled. Companies shall not present the advantages of the selling opportunity to any prospective recruit in a false or deceptive manner.

3.4 Remuneration and Accounts

Companies shall provide direct sellers with periodic accounts concerning, as applicable, sales, purchases, details of earnings, commissions, bonuses, and other relevant data, in accordance with the company's arrangement with the Direct Sellers. All financial due shall be paid and any withholdings made in a commercially reasonable manner.

3.5 Earnings Claims

Companies and Direct Sellers shall not misrepresent the actual or potential sales or earnings of their Direct Sellers. Any earnings or sales representations made shall be based upon documented facts. With great care taken to show the differences between newly recruited Direct Sellers (whose earnings may be limited) and experienced Direct Sellers. Companies that make or allow direct levels.

3.6 Relationship (Cooling Off Period)

Companies shall provide to their Direct Sellers a 30 days cooling off period which will entitle her/him to:

  • Refund of any entry fee paid upon his resigning and returning all materials/goods received by him at the time of joining.
  • He shall also be entitled to return any other product purchased by him during these 30 days period notwithstanding the 7 days limitation provided for a buyback/return of goods which are in good condition, use able, re-saleable & re-stock able.

3.7 FEES

Companies and Direct Sellers shall not require Direct Sellers or prospective Direct Sellers to assume unreasonably high entrance fees, training fees, franchise fees, fees for promotional materials or other fees related solely to the right to participate in the company's distribution system. Any fees charged to become a Direct Seller shall relate directly to the value of materials, products or services provided in return.

3.8 Termination

If requested upon termination of a Direct Seller's relationship with a Company

  • a) Companies shall buy back any unsold, re-saleable product inventory, purchased within the previous twelve months.
  • b) Refund the Direct Seller's original cost, less a handling charge to the Direct Seller of up to 10% of the net purchase price.
  • c) The Company may also deduct the cost of any benefit received by the Direct Seller based on the original purchase of the returned goods.
  • d) Whether the direct seller has the right to rejoin or cannot rejoin is at the discretion of the company.

3.9 Inventory

Companies shall not require or encourage Direct Sellers to purchase product inventory in unreasonably large amounts. Companies shall take reasonable steps to ensure that Direct Sellers who are receiving compensation for downline sales volume are either consuming or reselling the products they purchase in order to qualify to receive compensation.

3.10 Other Materials

Companies shall prohibit Direct Sellers from marketing or requiring the purchase by others of any materials that are inconsistent with company policies and procedures.

Direct Sellers who sell company approved promotional or training literature, whether in hard copy or electronic form, shall

  • (i) utilize only materials that comply with the same standards to which the Company adheres to
  • (ii) refrain from making the purchase of such sales aids a requirement of downline Direct Sellers
  • (iii) provide sales aids at a reasonable and fair price, equivalent to similar material available generally in the marketplace
  • (iv) offer a written return policy that is the same as the return policy of the company the Direct Seller represents. Companies shall take diligent, reasonable steps to ensure that sales aids produced by Direct Sellers comply with the provisions of this Code and are not misleading or deceptive.

3.11 Direct Seller Training

Companies shall provide adequate training to enable Direct Sellers to operate ethically.