Ethics

DSAA membership is founded on a commitment to professional standards of business practice. To maintain membership, members must strictly comply with DSAA's Code of Practice.

Internationally sponsored and locally adapted, the DSAA Code spells out what is expected of members in their dealings with those who distribute their products - independent contractors variously described as distributors, consultants or representatives. A quick, easy and cost free process exists to resolve complaints, including access to independent adjudication.

As well as applying throughout Australia, the Code covers the business dealings of members in countries that do not have a Direct Selling Association, or where a member is not a member of a Direct Selling Association in a particular country.

In applying and building on legal requirements the Code anticipates a range of consumer issues including:

  • Terms of offers made to consumers
  • Sales presentations
  • Advertising
  • Calling hours
  • Privacy
  • Earnings representations
  • Inventory repurchase.

Members are required to have systems in place to ensure their employees and independent distributors know and comply with legal and Code requirements in their dealings with consumers. Importantly, members are principally responsible for their sales force's compliance with the Code and their dealings with consumers.

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Offers

Terms of offers must be clear and unambiguous. In particular consumers must be aware of:

  • the precise nature of the offer
  • their commitment in placing an order
  • their unconditional right to cancel an agreement within ten days, and not have services commenced in that time
  • the member's exchange and refund policies, and
  • complaint and redress opportunities

Documentation

DSAA requires a member's sales documentation to include:

  • the full name, physical address and telephone number of the member and independent sales person involved in a transaction
  • a description of the product and quantity ordered
  • the full transaction cost, including any delivery charges
  • payment terms
  • agreed delivery dates
  • clear advice of a consumer's unconditional right to cancel an agreement within ten days of placing an order and if the agreement is for services, that services cannot be supplied during the "cooling-off" period.
  • instructions on cancellation and refund procedures
  • terms of any express warranty and after sales service
  • disclosure that the supplier is a DSAA member, and subscribes to DSAA's Code of Practice

Further

  • agreements must be legible and signed by the consumer
  • any alterations must be signed by the consumer and salesperson
  • a copy of the agreement must be given to the consumer at the time of making a sale if it is a contact sale, or otherwise at or before the time the goods are delivered
  • consumers cannot be placed under pressure to sign agreements

Members must advise consumers if goods will not be delivered within seven days of the agreed delivery date, and that consumers may cancel and agreement and obtain a refund if delivery does not occur within 21 days of the agreed date.

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Testimonials and Endorsements

Members must ensure the advertising or promotion of their products is neither misleading nor deceptive. This extends to the reliance of members and their independent salespersons on testimonials and endorsements. All testimonials must be capable of being substantiated and cannot be used if they:

  • are not authorised by the person quoted
  • are obsolete or no longer applicable or relevant
  • do not relate to the actual product.

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Comparisons and Fair Competition

Independent sales persons must avoid using product comparisons which are likely to mislead consumers or amount to unfair competition. This includes expressly or impliedly denigrating a member or its products, and inducing cancellation of existing arrangements with other suppliers.

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Calling Hours

Unless a consumer consents, sales persons cannot make personal or telephone contact with consumers:

  • on a Sunday or Public Holiday
  • before 9 a.m. or after 8 p.m. on a Weekday
  • before 9 a.m. or after 5 p.m. on a Saturday.

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Privacy

Sales persons must respect a consumer's right to privacy. This includes ceasing sales presentations and leaving premises immediately if requested by a consumer.

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Inventory Repurchase

Members are required to repurchase inventory that is not more than twelve months old at ninety percent of its purchase price, with perhaps some allowance for set-offs or legal claims. This repurchase policy does not apply to inventory where its shelf life has expired, or to inventory that was disclosed as being seasonal, discontinued or a special promotion. Inventory includes member-produced demonstration materials, sales aids and demonstration kits.

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Earnings Representations

Members cannot represent the actual or potential sales or earnings of their independent sales persons. Earnings and sales representations must be based on documented facts or other information considered reasonable for particular circumstances.

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Systematic Enticement

Members and independent sales persons must not engage in any systematic enticement of the sales force of other members. Members are also prohibited from condoning this behaviour by their independent sales persons.

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Complaints

DSAA has a robust complaints handling system which complements and does not compromise consumer access to established alternatives for resolution of fair trading issues. Under DSAA's system:

  • Consumer complaints are first raised with the member. Members must respond within ten days of receiving the complaint, and must keep complaint records for at least three years.
  • If the complaint is not resolved to a consumer's satisfaction, the DSAA has ten days in which to attempt to resolve the complaint.
  • If this fails, the complaint is referred for attempted resolution by DSAA's Code Administrator, with ultimate recourse to an independently constituted Consumer Complaints Resolution Panel. The Code Administrator and Panel are independent and not connected with any member. Panel decisions are binding on members, but not consumers.

DSAA is satisfied that the complaint handling systems operated by its members are serving consumer protection and quality assurance purposes. The DSAA's experience is that formal complaints in terms of member transactions are very small and are invariably resolved at member and DSAA levels. DSAA believes this level of consumer satisfaction is also reflected in other complaints handling experience throughout Australia.

Complaints by sales persons against members, or against other sales persons, may be referred to the DSAA. If DSAA fails to informally resolve the complaint, it may be referred to an independent Code Administrator. Decisions are binding on members. This process does not affect any other rights or remedies that independent sales persons may have against members or other sales persons.

Linked Documents

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