The DSAI Code of Business Conduct Direct Selling Association of Ireland code of business conduct As approved by the DSAI Council on 7 Nov 2013
The DSAI Code of Business Conduct
Direct Selling Association of Ireland code of business conduct
As approved by the DSAI Council on 7 Nov 2013
1. Scope and Definitions
This code concerns a member’s dealing with
(a) direct sellers; and
(b) other members
“the Association” and “DSAI” means the Direct Selling Association of Ireland:
“business opportunity presentation” and “presentation” mean any meeting or discussion at which a member or a direct seller describes a commercial relationship between a member and potential direct sellers;
“direct seller” means any person involved in direct selling in any capacity.
“direct selling” means the direct selling of consumer products either in the home or away from normal retail premises by which a salesperson either demonstrates the product or presents a product catalogue or collects an order or arranges for the delivery of the products or collects payment for the product or arranges for credit;
“member” means a member of the Association and includes its employees;
“product” means any goods or services;
“sponsor” means a direct seller who engages in recruiting and/or supporting other direct sellers in a member’s business;
“statutory rights” means those rights conferred by regulations made under Irish law whether or not the regulations apply to the member’s direct selling scheme.
2.1 Members and direct sellers shall not use misleading, deceptive or unfair recruiting methods.
2.2 Advertisements placed by members or direct sellers shall not make unrepresentative or exaggerated earnings claims.
2.3 At the first point of contact, verbal or face-to-face, with a prospective recruit, the recruiter shall clearly identify the name of the member.
2.4 An invitation, by whatever means, to a business opportunity presentation shall:
(a) state the name of any sponsor or direct seller involved;
(b) state the name of the member and its class of membership of the DSAI;
(c) clearly and accurately indicate the purpose of the presentation and not imply that it relates to employment or that it is anything other than an occasion to be informed about a business relationship with a member.
2.5 Any member’s recruitment advertisement over 30 words in length shall include:
(a) the member’s name; and
(b) indicate membership of the DSAI.
2.6 All recruitment material (including advertisements)and in whatever medium (e.g. printed, audio, video, electronic) over 30 words in length must:
(a) be pre-approved by the member, and
(b) clearly identify the member, giving the member’s name at least as much prominence as the name of the direct seller, or direct selling group, to whom prospects are invited to respond.
2.7 Any recruitment material used in a direct marketing campaign, whether or not involving the purchase or rental of mailing lists, must be pre-approved by the member.
2.8 In relation to its own website and the websites of its independent direct sellers, each member shall establish
(a) rules and standards, and
(b) a monitoring system to check the websites for compliance.
2.9 Fly-posting of recruitment and other material on street furniture, telephone kiosks or any other property, public or private, is banned.
2.10 All costs, whether for goods or services, charged by a member or direct seller to a prospective recruit who does not take up the opportunity offered shall be refunded. To the extent that those costs relate to the supply of non-consumable goods, the refund may be withheld unless the goods are returned within 30 days of their purchase. No refund need be made, however, in respect of any of the member’s products purchased by the prospective recruit in the capacity of a consumer.
3. Presenting Business Opportunities
3.1 Members and direct sellers shall not describe the opportunity to a prospective direct seller in a false or misleading manner.
3.2 At all presentations of any kind reference shall be made to the name of the member and its class of membership of the DSAI.
3.3 At all times:
(a) members and direct sellers shall only promote the opportunity as a business relationship with the member.
(b) no unrepresentative or exaggerated earnings claims shall be made;
(c) any earnings claims must relate to actual earnings from the opportunity by an identifiable person and be capable of verification;
(d) income claims should not imply that earnings are easily or quickly achieved.
3.4 Members and direct sellers shall not promote any business based solely on recruiting other direct sellers.
3.5 All presentations must promote the business as one where direct sellers sell products to consumers.
3.6 It is permissible for a direct seller to be rewarded (e.g. by retail mark-up or commission on sales volume) for building a network of consumers who purchase goods either from the direct seller or directly from the company. However, members and direct sellers shall not encourage anyone to purchase a product on the basis that the product cost they incur will be recovered, reimbursed or reduced if they get others to make similar purchases.
4. Investment in Business Opportunities
4.1 Members, sponsors and direct sellers shall not require or encourage any direct seller to purchase products in unreasonable amounts. Nor shall a member accept orders for purchases which it knows are for unreasonable amounts.
4.2 The appropriate investment shall take account of (among other things):
(a) the purchase of a reasonable quantity of products for self consumption or use;
(b) sales that have already been made;
(c) a reasonable amount of product for effective demonstration or display to potential consumers.
4.3 Any purchase would be for an unreasonable amount if it was a purchase of re-saleable goods which was made:
(a) prior to those goods being re-sold; and
(b) primarily to secure a higher position in the organisation for the purchaser or primarily to benefit another individual in the organisation.
4.4 A purchase would also be for an unreasonable amount, irrespective of whether the order was placed on an automatic or recurrent basis, if the purchaser had no need of the goods either for his/her own use or for re-sale.
4.5 Members 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.
5. Business Support Materials
5.1 Members shall require their direct sellers who sell promotional or training literature (sales aids) in hard copy or electronic form:
(i) to utilise only materials that are approved by the member or comply with the same standards to which the member adheres,
(ii) to refrain from making the purchase of such sales aids a requirement for downline direct sellers,
(iii) to provide such literature (and any other sales aids) at no more than a reasonable and fair price, equivalent to the price of similar material available generally in the marketplace,
(iv) to offer a written return policy that is the same as the return policy of the member, and
(v) not to require any other direct seller to purchase any sales aids or other materials that are inconsistent with the member’s policies and procedures.
5.2 Members shall take reasonable steps to ensure that sales aids and other materials produced by direct sellers are not misleading or deceptive and are sold only in compliance with the provisions of this Code.
5.3 The sale of sales aids shall not be permitted to be a profit centre for either a DSA member or any of its direct sellers.
6.1 Members’ advertisements shall be truthful and accurate and, as a general rule, shall incorporate a reference to their membership of the Association. Members’ sales and promotional literature shall be truthful and accurate and shall always contain a reference to their membership of the Association.
6.2 Members must be able to satisfy the Association that they comply with the Irish Codes of Advertising Practice and Sales Promotion where relevant and any other recognised self-regulatory codes.
7. Contract and Payments
7.1 Members shall provide every direct seller with a written contract.
7.2 Contracts shall:
(a) define a direct seller’s financial obligations and meet all statutory requirements;
(b) contain or refer to all the terms between the parties in a clear and legible format;
(c) provide for termination by either party;
(d) state whether or not it may be transferred to anyone else, and if so upon what terms;
(e) contain or refer to full details of how earnings will be calculated and paid to direct sellers;
(f) require direct sellers to observe all DSAI codes;
(g) contain details of any restrictions relating to competitive activity by direct sellers.
7.3 Members shall not require direct sellers to pay unreasonable fees for participating in a business opportunity, for training, or for promotional or other materials.
7.4 Members shall ensure that active direct sellers are provided at no charge with regular statements of account showing:
(a) full and accurate financial details of all transactions;
(b) how any deductions are calculated.
7.5 Members shall make any payments to direct sellers on time.
8. Information and Training
8.1 Members shall inform their direct sellers of their legal obligations, including those relating to income tax, social security payments and, where relevant, appropriate vehicle insurance.
8.2 Members shall provide or arrange for direct sellers to receive a reasonable standard of training in product knowledge and on how to develop their business.
8.3 Where sponsors or others provide training relating to member’s business, members shall ensure:
(a) that they approve all materials referring to the member’s business opportunity and/or its products;
(b) that direct sellers understand that they do not need to purchase training materials as a condition for obtaining advice from a sponsor;
(c) that if direct sellers pay for training material of any description the price shall be reasonable and relative to the cost.
8.4 If members or sponsors charge for training, they shall, for 14 days afterwards, offer full refunds (less the cost of any subsistence)
9. Members shall take appropriate steps to ensure the protection of all private information provided by direct sellers and to require that direct sellers take appropriate steps to ensure the protection of private information provided to them by consumers.
10. Buy-Back Provisions
10.1 When a contract is terminated by either party within 14 days of its being made, the member shall:
(a) refund all money paid by the direct seller in connection with joining the scheme, and
(b) buy back any unsold product (including training and promotional materials, business manuals and kits) returned by the direct seller within 21 days of the termination upon terms which are no less favourable than the statutory rights, if any.
10.2 When a contract is terminated by either party after 14 days of its being made, the member shall:
(a) buy back product (including training and promotional materials, business manuals and kits) purchased by the direct seller within 90 days of the date of termination upon terms no less favourable to the direct seller than the statutory rights if any; and
(b) buy back product (including training and promotional materials, business manuals and kits) purchased by the direct seller for more than 90 days but within one year of the date of termination at a price not less than 90% of the VAT-inclusive price paid by the direct seller for the purchase of those products less an amount equal to:
(i) any commissions, bonuses or other benefits (in cash or in kind) received by the direct seller in respect of those products:
(ii) any amounts due from the direct seller to the member on any account; and
(iii) a reasonable handling charge, provided that:
i) such product has not been purchased or acquired by the direct seller in breach of the contract;
ii) the direct seller returns such product to the member in an unused, commercially resaleable condition not more than 14 days after the date of termination; and
iii) the member did not clearly inform the direct seller prior to the purchase that the items were seasonal, discontinued or special promotion products which were not to be subject to the buy-back provisions of the Code.
10.3 At any time during the subsistence of a contract, if requested by a direct seller, the member will buy back any product returned by the direct seller which he purchased at any time within one year of the date of such request upon the terms set out in Rule 8.2(b) above.
11 Relations Between Members
11.1 Members shall behave ethically towards other members.
11.2 Members and direct sellers shall not denigrate any other member or direct seller.
11.3 Members, sponsors and direct sellers shall not entice or solicit direct sellers from other members or other direct selling companies.
12. International Direct Selling
12.1 Where a member carries on business, or permits the direct selling of its products, in another country, it shall do so in accordance with legislation relating to direct selling in that country and all Codes of Practice of the local Direct Selling Association (whether or not it is a member of that Association).
12.2 If there is no local Direct Selling Association, the member will ensure that all its employees and direct sellers in that country abide by the provisions of the World Federation of Direct Selling Association’s Codes.
13. Code Responsibilities
13.1 Every member and direct seller shall follow all DSAI Codes.
13.2 Only members may use the DSAI logo and state that they belong to the Association.
13.3 Every member’s chief executive is responsible for the observation of this Code by its employees and direct sellers.
13.4 Every member shall operate a system for dealing with reported breaches of this Code and keep records of complaints and of the action taken in response.
13.5 Every member shall give all their direct sellers a copy of the DSAI Codes.
14. Code Administration
14.1 DSAI Codes are supervised and administered by an independent, legally qualified Administrator appointed by the Council on behalf of the Association.
14.2 The Code Administrator will publish an annual report which includes any suggestions the Administrator has for the improvement of the Code in the light of experience.
15. Breaches of the Business Code
Any complaint about a breach of the Business Code shall be treated in the following way.
(a) The complainant may refer it:
(i) to the Chief Executive of the member, or
(ii) the Secretary General of the Association.
(b) If the complainant is dissatisfied with any solution proposed by the member, or it is referred initially to the Secretary General, the following procedure will be used:
(i) The complainant will be asked to set out details of the complaint in writing.
(ii) The Secretary General will send a copy of the written complaint to the member requesting prompt remedial action; the complainant will be kept informed at all times.
(iii) If the Secretary General is not notified within 21 days that the matter has been resolved, he shall refer it to the Code Administrator and may notify the Council of the Association.
(c) If the complainant is dissatisfied with the recommended action, or if the member fails to act as required by the Secretary General, the Secretary General shall refer the complaint to the Code Administrator.
16. Investigations by the Code Administrator
16.1 The Code Administrator will investigate any complaint referred to him, obtain evidence from the complainant, from the member and any other relevant person and make a written adjudication as quickly as possible.
16.2 The adjudication is binding on the member and any direct seller; the complainant is not bound by the adjudication.
17.1 Where a member is found to be in breach of the Business Code, the Code Administrator may require the member:
(a) to repay all money paid by the complainant;
(b) to buy back any unsold product at a price to be fixed by the Code Administrator;
(c) to replace or repair any product without charge;
(d) to pay any costs incurred by the Code Administrator for technical advice or testing;
(e) to give a written undertaking to observe the Code and to take all reasonable steps to prevent a recurrence of the breach;
(f) to pay to the complainant compensation (not exceeding 6000 euros) in respect of any financial loss;
(g) to re-instate a direct seller’s contract.
17.2 The Code Administrator may require that the member appear before the Disciplinary Committee and may make recommendations as to the action it should take.
18. Disciplinary Committee
18.1 The Disciplinary Committee shall consist of two Council Members. The Disciplinary Committee shall consider all the evidence and may call for written or oral evidence from any person, including further oral or written evidence from the Code Administrator. The Disciplinary Committee will be empowered to exercise the Association’s disciplinary powers, including that of expelling a member from the Association.
18.2 The Disciplinary Committee shall send its report to the complainant and the member and the Council of the Association. The member is bound by the adjudication, subject to his right to appeal, as set out hereunder in 18.3.
18.3 Members shall have the right of appeal to the full council of the Association, whose decision is final.