codigo de etica 4life
TRANSCRIPT
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Code of Ethics
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A. Code o ConduCt
1. dcpiv r uaw Csr
r Rcriig Pracics
a. No member company o the Asso-
ciation or independent sales
person or a member companyshall engage in any deceptive,
alse, unethical or unlawul
consumer or recruiting practice.
Member companies shall
ensure that no statements,
promises or testimonials are
made that are likely to mislead
consumers or prospectiveindependent salespeople.
b. Member companies and their
independent salespeople must
comply with all requirements
o law. While this Code does
not restate all legal obligations,compliance with all pertinent
laws by member companies and
their independent salespeople is
a condition o acceptance by and
continuing membership in DSA.
1. Tis secion does no bring proselyizing
or salesorce raiding dispues under he
Codes jurisdicion, unless such dispues
involve allegaions o decepive, unehical or
unlawul recruiing pracices or behaviors
aimed a poenial salespeople. In hose
cases, he secion applies. As used in his
secion, unehical means violaive o he
U.S. DSA Code o Ehics
Te DSA Code Adminisraor has he
auhoriy o make a deerminaion o
wha is a decepive, unlawul or unehical
consumer or recruiing pracice under he
Code using prevailing legal sandards as a
guide. Compliance wih any paricular law,
regulaion or DSA Code o Ehics provision
is no a deense o such a deerminaion by
he DSA Code Adminisraor ha a pracice
is decepive, unlawul or unehical. For
example, in a sale o a consumer, compli-ance wih he Federal rade Commission
Cooling-O Rule does no bar he DSA
Code Adminisraor om making a deer-
minaion ha a paricular sales pracice is
decepive, unlawul or unehical and ha a
reund or compensaion is required.
Code of Ethics
Explanaory provisions in ialics.
PReAmble
The Direct Selling Association, recognizing that companies engaged in direct
selling assume certain responsibilities toward customers arising out o the
personal-contact method o distribution o their products and services,
hereby sets orth the basic air and ethical principles and practices to which
member companies o the Association will continue to adhere in the conduct
o their business.
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c. Member companies shall conduct
their activities towards other
members in compliance with this
Code and all pertinent laws.
d. Inormation provided by member
companies and their independent
salespeople to prospective or
current independent salespeople
concerning the opportunity and
related rights and obligations
shall be accurate and complete.
Member companies and their
independent salespeople shall not
make any actual representation
to prospective independent sales-
people that cannot be veried or
make any promise that cannot be
ullled. Member companies andtheir independent salespeople
shall not present any selling
opportunity to any prospective
independent salesperson in a
alse, deceptive or misleading
manner.
e. Member companies and their
independent salespeople shall
not induce a person to purchase
products or services based
upon the representation that a
consumer can recover all or part
o the purchase price by reerring
prospective consumers, i suchreductions or recovery are viola-
tive o applicable reerral sales
laws.
. Member companies shall provide
to their independent salespeople
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either a written agreement to
be signed by both the member
company and the independent
salesperson, or a written state-ment containing the essential
details o the relationship between
the independent salesperson and
the member company. Member
companies shall inorm their inde-
pendent salespeople o their legal
obligations, including their respon-
sibility to handle any applicable
licenses, registrations and taxes.
g. Member companies shall provide
their independent salespeople with
periodic accounts including, as
applicable, sales, purchases, details
o earnings, commissions, bonuses,discounts, deliveries, cancellations
and other relevant data, in accor-
dance with the member companys
arrangement with the independent
salesperson. All monies due shall be
paid and any withholdings made in
a commercially reasonable manner.
h. Independent salespeople shall
respect any lack o commercial
experience o consumers. Indepen-
dent salespeople shall not abuse
the trust o individual consumers,
or exploit a consumers age, illness,
handicap, lack o understanding orunamiliarity with a language.
2. Prcs, Srvics a
Pria marias
a. The oer o products or services
or sale by member companies o
1.&2. Tese secions cover communicaions
abou your own company or anoher
company. For example, a disribuor
or company A makes misleading
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the Association shall be accurate
and truthul as to price, grade,
quality, make, value, perormance,
quantity, currency o model andavailability. A consumers order
or products and services shall be
ullled in a timely manner.
b. Member companies shall not
make misleading comparisons
o another companys direct
selling opportunity, products or
services. Any comparison must
be based on acts that can be
objectively substantiated. Member
companies shall not denigrate
any other member company,
business, product or service
directly or by implication in aalse or misleading manner and
shall not take unair advantage o
the goodwill attached to the trade
name and symbol o any company,
business, product or service.
c. Promotional literature, advertise-
ments and mailings shall not
contain product descriptions,
claims, photos or illustrations that
are alse, deceptive or misleading.
(Promotional literature shall
contain the name and address or
telephone number o the member
company and may include thetelephone number o the individual
independent salesperson).
d. Independent salespeople shall
oer consumers accurate
inormation regarding: price,
saemens abou company B and/or
is producs o consumers or prospecive
salespeople.
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credit terms; terms o payment;
a cooling-o period, including
return policies; terms o guarantee;
ater-sales service; and deliverydates. Independent salespeople
shall give understandable and
accurate answers to questions
rom consumers. To the extent
claims are made with respect
to products, independent
salespeople shall make only those
product claims authorized by the
member company.
3. trs Sa
a. A written order or receipt shall
be delivered to the consumer at
or prior to the time o the initial
sale. In the case o a sale madethrough the mail, telephone,
Internet, or other non ace-to-
ace means, a copy o the order
orm shall have been previously
provided, be included in the initial
order, or be provided in printable
or downloadable orm through
the Internet. The order orm
must set orth clearly, legibly and
unambiguously:
i. Terms and conditions o sale,
including the total amount the
consumer will be required to
pay, including all interest, service
charges and ees, and other costsand expenses as required by
ederal and state law;
ii. Identity o the member company
and the independent salesperson,
and contain the ull name,
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permanent address and telephone
number o the member company
or the independent salesperson,
and all material terms o the sale;and
iii. Terms o a guarantee or a
warranty, details and any limita-
tions o ater-sales service, the
name and address o the guar-
antor, the length o the guarantee,
and the remedial action availableto the consumer. Alternatively,
this inormation may be provided
with other accompanying litera-
ture provided with the product or
service.
b. Member companies and their
salespeople shall oer a written,clearly stated cooling o period
permitting the consumer to
withdraw rom a purchase order
within a minimum o three days
rom the date o the purchase
transaction and receive a ull
reund o the purchase price.
c. Member companies and their
independent salespeople oering
a right o return, whether or not
conditioned upon certain events,
shall provide it in writing.
4. Warrais a Garas
The terms o any warranty or
guarantee oered by the seller in
connection with the sale shall be
urnished to the buyer in a manner
that ully conorms to ederal and
state warranty and guarantee laws
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and regulations. The manuacturer,
distributor and/or seller shall ully
and promptly perorm in accordance
with the terms o all warranties andguarantees oered to consumers.
5. Iicai a Privacy
a. At the beginning o sales
presentations independent
salespeople shall truthully and
clearly identiy themselves, their
company, the nature o their
companys products or services,
and the reason or the solicitation.
Contact with the consumer
shall be made in a polite manner
and during reasonable hours.
A demonstration or sales
presentation shall stop upon theconsumers request.
b. Member companies and
independent salespeople shall
take appropriate steps to
saeguard the protection o all
private inormation provided by a
consumer, a prospective consumer,
or other independent salespeople.
6. Pyrai Scs
For the purpose o this Code, pyramid
or endless chain schemes shall be
considered consumer transactions
actionable under this Code. TheCode Administrator shall determine
whether such pyramid or endless
chain schemes constitute a viola-
tion o this Code in accordance with
applicable ederal, state and/or local
law or regulation.
6. Te deniion o an illegal pyramid is
based upon exising sandards o law as
reeced in In he mater o Amway, 93
FC 618 (1979) and he ani-pyramid
laws o Kenucky, Louisiana, Monana,Oklahoma, and exas. In accordance
wih hese laws, member companies shall
remunerae direc sellers primarily on
he basis o sales o producs, including
services, purchased by any person
or acual use or consumpion. Such
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7. Ivry Prcass
a. Any member company with a
marketing plan that involves
selling products directly or indi-
rectly to independent salespeople
shall clearly state, in its recruitingliterature, sales manual, or
contract with the independent
salespeople, that the company
will repurchase on reasonable
commercial terms currently
marketable inventory, in the
possession o that salespersonand purchased by that sales-
person or resale prior to the date
o termination o the salesper-
sons business relationship with
the company or its independent
salespeople. For purposes o this
Code, reasonable commercial
terms shall include the repur-chase o marketable inventory
within twelve (12) months
rom the salespersons date o
purchase at not less than 90
percent o the salespersons orig-
inal net cost less appropriate set
os and legal claims, i any. Forpurposes o this Code, products
shall not be considered currently
marketable i returned or
repurchase ater the products
commercially reasonable usable
or shel lie period has passed;
remuneraion may include compensaion
based on sales o individual direc sellers
or heir own acual use or consumpion.
7a. Te purpose o he buyback is o elimi-nae he poenial harm o invenory
loading; i.e., he pracice o loading
up salespeople wih invenory hey are
unable or unlikely o be able o sell oruse wihin a reasonable ime period.
Invenory loading has hisorically been
accomplished by giving sellers nan-
cial incenives or sales wihou regard
o ulimae sales o or use by acual
consumers. Te repurchase provisions
o he Code are mean o deer invenory
loading and o proec disribuors om
nancial harm which migh resul om
invenory loading.
Invenory is considered o include boh
angible and inangible produc; i.e., boh
goods and services. Curren marke-
abiliy o invenory shall be deermined
on he basis o he specic condiion o heproduc. Facors o be considered by he
Code Adminisraor when deermining
curren markeabiliy are condiion o
he goods and wheher or no he prod-
ucs have been used or opened.
Changes in markeplace demand,
produc ormulaion, or labeling areno sucien grounds or a claim by he
company ha a produc is no longer
markeable. Nor does he ingesible
naure o cerain producs limi per se he
curren markeabiliy o hose producs.
Governmen regulaion which may
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nor shall products be considered
currently marketable i the
company clearly discloses to
salespeople prior to purchasethat the products are seasonal,
discontinued or special promo-
tion products and are not subject
to the repurchase obligation.
b. Any member company with a
marketing plan which requires
independent salespeople to
purchase company-produced
promotional materials, sales aids
or kits shall clearly state, in its
recruiting literature, sales manual
or contract with the independent
arguably resric or limi he ulimae
resalabiliy o a produc does no limi is
curren markeabiliy or purposes o
he Code.Sae saues mandae ha cerain
buyback provisions required by law mus
be described in a direc sellers conrac.
While acknowledging ha he conrac
is probably he mos eecive place or
such inormaion, he DSA Code allows
or placemen o he provision in eiherrecruiing lieraure or conrac. Te
DSA Code is mean o emphasize ha
he disclosure mus be in wriing and
be clearly saed. Wherever disclosed,
he buyback requiremen shall be
consrued as a conracual obligaion o
he company.
A company shall no place any unreason-
able (e.g., procedural) impedimens in
he way o salespeople seeking o sell back
producs o he company.
Te buyback process should be as
ecien as possible and designed o acil-
iae buyback o producs. Te buybackprovisions apply o all erminaing
disribuors who oherwise qualiy or
such repurchase, including disribu-
ors who are no new o a paricular
company, or hose who have lef a
company o sell or anoher company.
7b. 1998 amendmens made i clear ha
sales aids, kis and promoional mae-
rials, while no invenory or necessarily
inended or resale, are subjec o he
repurchase requiremen i a company
requires heir purchase or i here is a
nancial incenive associaed wih heir
sale. I was recognized ha loading o
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salespeople, that the company
will repurchase these items on
reasonable commercial terms.
Any member company with a
marketing plan which provides
its independent salespeople with
any nancial benet related to
the sales o company-produced
promotional materials, sales aids
or kits shall clearly state, in its
recruiting literature, sales manual
or contract with the independent
salespeople, that the company
will repurchase, on reasonable
commercial terms, currently
marketable company-produced
promotional materials, sales aids
or kits.
A member company shall clearly
state in its recruiting literature,
sales manual or contract with the
independent salespeople i any
items not otherwise covered by
this Section are ineligible or repur-
chase by the company.
8. earigs Rprsais
No member company shall misrep-
resent the actual or potential sales
or earnings o its independent
salespeople. Any earnings or sales
representations that are made bymember companies shall be based
on documented acts.
hese iems can cause he same harm o
plan paricipans as loading o invenory.
Wih respec o he nal paragraph
o Secion 7b., disclosure o an iemseligibiliy or ineligibiliy or he buyback
is key. Provided ha repurchase is no
required by his Code provision, or
hose iems a company chooses no o
repurchase, he company should clearly
and conspicuously disclose o he buyer
ha he iems are no subjec o herepurchase requiremen. Under such
disclosure, a reusal o ake an iem
back will no consiue a violaion
providing he member is acing in good
aih and no atemping o evade he
repurchase requiremen.
8. Tere is ample legal preceden in he
orm o FC decisions o aord guidance
on he subjec o earnings represena-
ions. While no conrolling, hese
precedens should be used by he Code
Adminisraor in making deermina-ions as o he subsaniaion o company
earnings claims.
Te Codes simple prohibiion o
misrepresenaions was inended, in
par, o avoid unduly encumbering
sar-up companies ha have litle or
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9. Ivry laig
A member company shall not
require or encourage an independent
salesperson to purchase inventoryin an amount which unreasonably
exceeds that which can be expected
to be resold and/or consumed
within a reasonable period o time.
Member companies shall take
reasonable steps to ensure that
independent salespeople receiving
compensation or downline sales
volume are consuming, using or
reselling the products and services
they purchase in order to qualiy to
receive compensation.
10. Pay s
Neither member companies nor theirindependent salespeople shall ask
individuals to assume unreasonably
high entrance ees, training ees,
ranchise ees, ees or promotional
materials or other ees related
solely to the right to participate in
no acual earnings hisory wih heir
compensaion plan or esablished
companies ha are esing or launching
new compensaion plans. Te prohibi-ion approach is mean o require ha
companies in hese circumsances need
only ensure ha heir promoional
lieraure and public saemens clearly
indicae ha he compensaion plan is
new and ha any chars, illusraions
and saed examples o income under
he plan are poenial in naure and no
based upon he acual perormance o
any individual(s).
9. See, Code Explanaory 7a. regarding
invenory loading.
10. High enrance ees can be an elemen o
pyramid schemes, in which individualsare encouraged o expend large upon
coss, wihou receiving produc o like
value. Tese ees hen become he mecha-
nism driving he pyramid and placing
paricipans a risk o nancial harm.
Some sae laws have requiremens ha
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the direct selling business. Any ees
charged to become an independent
salesperson shall relate directly to
the value o materials, products orservices provided in return.
11. traiig a marias
a. Member companies shall provide
adequate training to enable
independent salespeople to
operate ethically.
b. Member companies shall prohibit
their independent salespeople
rom marketing or requiring
the purchase by others o any
materials that are inconsistent
with the member companys
policies and procedures.
c. Independent salespeople selling
member company-approved
promotional or training materials,
whether in hard copy or electronic
orm, shall:
ees be reurned similar o he repurchase
provisions delineaed in Code 7a. Te
Code eliminaes he harm o large ees
by prohibiing unreasonably high ees.Te Code Adminisraor is empowered
o deermine when a ee is unreason-
ably high. For example, i a reund is
oered or only a porion o an enrance
ee, o cover wha could be described
as invenory, and here is nohing else
given or received or he balance o he
enrance ee, such as a raining program,
ha porion o he enrance ee may be
deemed o be unreasonably high by he
Code Adminisraor. Tis Code secion
reinorces he provision in Code Par B.
Responsibiliies and Duies requiring
companies o address he Code viola-
ions o heir independen conracorsalesorce.
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i. Use only materials that comply
with the same standards used by
the member company,
ii. Not make the purchase o suchmaterials a requirement o other
independent salespeople,
iii. Provide such materials at not
more than the price at which
similar material is available
generally in the marketplace, and
iv. Oer a written return policy
that is the same as the return
policy o the member company
the independent salesperson
represents.
d. Member companies shall take
diligent, reasonable steps toensure that promotional or
training materials produced by
their independent salespeople
comply with the provisions o this
Code and are not alse, misleading
or deceptive.
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b. ReSPonSIbIlItIeS And dutIeS
1. Prp Ivsigai a n Ip Cracr ds
a. Member companies shall establish, publicize and implement complaint
handling procedures to ensure prompt resolution o all complaints.b. In the event any consumer shall complain that the salesperson or repre-
sentative oering or sale the products or services o a member company
has engaged in any improper course o conduct pertaining to the sales
presentation o its goods or services, the member company shall promptly
investigate the complaint and shall take such steps as it may nd appro-
priate and necessary under the circumstances to cause the redress o any
wrongs which its investigation discloses to have been committed.c. Member companies will be considered responsible or Code violations by
their solicitors and representatives where the Administrator nds, ater
considering all the acts, that a violation o the Code has occurred. For the
purposes o this Code, in the interest o ostering consumer protection,
companies shall voluntarily not raise the independent contractor status o
salespersons distributing their products or services under its trademark or
trade name as a deense against Code violation allegations and such action
shall not be construed to be a waiver o the companies right to raise suchdeense under any other circumstance.
d. The members subscribing to this Code recognize that its success will require
diligence in creating an awareness among their employees and/or the inde-
pendent wholesalers and retailers marketing the members products or
services o the members obligations under the Code. No subscribing party
shall in any way attempt to persuade, induce or coerce another party to
breach this Code, and the subscribers hereto agree that the inducing o thebreach o this Code is considered a violation o the Code.
e. Individual salespeople are not bound directly by this Code, but as a condi-
tion o participation in a member companys distribution system, shall be
required by the member company with whom they are aliated to adhere
to rules o conduct meeting the standards o this Code.
. This Code is not law but its obligations require a level o ethical behavior
rom member companies and independent salespeople that is consistent
with applicable legal requirements. Failure to comply with this Code doesnot create any civil law responsibility or liability. When a company leaves
the DSA membership, a company is no longer bound by this Code. However,
the provisions o this Code remain applicable to events or transactions that
occurred during the time a company was a member o DSA.
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2. Rqir Picai
a. All member companies are required to submit to DSA, along with its appli-
cation or membership or in the case o existing members along with their
next dues payment, a proposed program as to how the company plans onpublicizing DSAs Code o Ethics to its sales people and consumers. The plan
shall contain, at a minimum, one o the ollowing:
i. an inclusion on the member companys website o DSAs Code o Ethics
with a step-by-step explanation as to how to le a complaint; or
ii. a link rom the member companys website to DSAs Code o Ethics with
a clear, bold aced statement as to how to make the connection; or
iii. an inclusion o the member companys Code o Ethics, or its complainant
process, on its website, or with an explanation o how a complainant
may appeal to the DSA Code Administrator in the event the complainant
is not satised with the resolution under the company code, or the
companys complaint process, with a reerence to the website o DSAs
Code o Ethics.
b. All member companies, ater submission o their program, are required
to state annually, along with paying their dues, that the program remains
eective or indicate any change.
3. C Rspsiiiy ocr
Each member company and pending member company is required to desig-
nate a DSA Code Responsibility Ocer. The Code Responsibility Ocer is
responsible or acilitating compliance with the Code by their company and
responding to inquiries by the DSA Code Administrator. He or she will also
serve as the primary contact at the member company or communicating
the principles o the DSA Code o Ethics to their independent sales people,
company employees, customers and the general public.
4. exrarriria efc
Each member company shall comply with the World Federation o Direct
Selling Associations Code o Conduct with regard to direct selling activities
outside o the United States to the extent that the WFDSA Code is not incon-
sistent with U.S. law, unless those activities all under the jurisdiction o thecode o conduct o another countrys DSA to which the member company
also belongs.
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C. AdmInIStRAtIon
1. Irprai a exci
The Board o Directors o the Direct Selling Association shall appoint a
Code Administrator to serve or a xed term to be set by the Board prior to
appointment. The Board shall have the authority to discharge the Adminis-
trator or cause only. The Board shall provide sucient authority to enable
the Administrator to properly discharge the responsibilities entrusted to the
Administrator under this Code.
The Administrator will be responsible directly and solely to the Board. The
Board o Directors will establish all regulations necessary to administer the
provisions o this Code.
2. C Aiisrar
a. The Administrator shall be a person o recognized integrity, knowledgeable
in the industry, and o a stature that will command respect by the industry
and rom the public. He shall appoint a sta adequate and competent to
assist him in the discharge o his duties. During his term o oce, neither
the Administrator nor any member o his sta shall be an ocer, director,
employee, or substantial stockholder in any member or aliate o the
DSA. The Administrator shall disclose all holdings o stock in any member
company prior to appointment and shall also disclose any subsequent
purchases o such stock to the Board o Directors. The Administrator shall
also have the same rights o indemnication as the Directors and Ocers
have under the bylaws o the Direct Selling Association.
b. The Administrator shall establish, publish and implement transparent
complaint handling procedures to ensure prompt resolution o allcomplaints.
c.The Administrator, in accordance with the regulations established by the
Board o Directors as provided herein, shall hear and determine all charges
against members subscribing hereto, aording such members or persons
an opportunity to be heard ully. The Administrator shall have the power to
originate any proceedings, and shall at all times have the ull cooperation
o all members.
3. Prcr
a. The Administrator shall determine whether a violation o the Code has
occurred in accordance with the regulations promulgated hereunder. The
Administrator shall answer as promptly as possible all queries posed by
members relating to the Code and its application, and, when appropriate,
may suggest, or consideration by the Board o Directors, new regulations,
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denitions, or other implementations to make the Code more eective.
b. I, in the judgment o the Code Administrator, a complaint is beyond the
Administrators scope o expertise or resources, the Code Administrator
may decline to exercise jurisdiction in the matter and may, in his or herdiscretion, recommend to the complainant another orum in which the
complaint can be addressed.
c. The Administrator shall undertake through his oce to maintain and
improve all relations with better business bureaus and other organizations,
both private and public, with a view toward improving the industrys rela-
tions with the public and receiving inormation rom such organizations
relating to the industrys sales activities.
d. ReGulAtIonS oR enoRCement o dSA Code o ethICS
1. Rcip Cpai
Upon receipt o a complaint rom a bona de consumer or where the Admin-
istrator has reason to believe that a member has violated the Code o Ethics,
the Administrator shall orward a copy o the complaint, i any, to the accused
member together with a letter notiying the member that a preliminary
investigation o a specied possible violation pursuant to Section 3 is beingconducted and requesting the members cooperation in supplying necessary
inormation, documentation and explanatory comment. I a written complaint
is not the basis o the Administrators investigation, then the Administrator
shall provide written notice as to the basis o his reason to believe that a viola-
tion has occurred. Further, the Code Administrator shall honor any requests
or condential treatment o the identity o the complaining party made by
that party.2. Cprai wi C Aiisrar
In the event a member reuses to cooperate with the Administrator and
reuses to supply necessary inormation, documentation and explanatory
comment, the Administrator shall serve upon the member, by registered
mail, a notice aording the member an opportunity to appear beore the
Appeals Review Panel on a certain date to show cause why its membership
in the Direct Selling Association should not be terminated. In the event themember reuses to cooperate with the Administrator or to request a review
by the Appeals Review Panel, the DSA Board o Directors, or a designated part
thereo, may vote to terminate the membership o the member.
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3. Ira Ivsigai a dispsii Prcr
a.The Administrator shall conduct a preliminary investigation, making such
investigative contacts as are necessary to reach an inormed decision as
to the alleged Code violation. I the Administrator determines, ater theinormal investigation, that there is no need or urther action or that the
Code violation allegation lacks merit, urther investigation and administra-
tive action on the matter shall terminate and the complaining party shall
be so notied.
b. The Administrator may, at his discretion, remedy an alleged Code viola-
tion through inormal, oral and written communication with the accused
member company.
c.I the Administrator determines that the allegation has sucient merit, in
that the apparent violations are o such a nature, scope or requency so as
to require remedial action pursuant to Part E and that the best interests
o consumers, the association and the direct selling industry require reme-
dial action, he shall notiy the member o his decision, the reasoning and
acts which produced it, and the nature o the remedy he believes should be
eected. The Administrators notice shall oer the member an opportunity
to voluntarily consent to accept the suggested remedies without the neces-sity o a Section 4 hearing. I the member desires to dispose o the matter
in this inormal manner it will, within 20 days, advise the Administrator, in
writing, o its willingness to consent. The letter to the Administrator may
state that the members willingness to consent does not constitute an
admission or belie that the Code has been violated.
4. Appas Rviw Pa
An Appeals Review Panel consisting o ve representatives rom active
member companies shall be selected by the Executive Committee o DSAs
Board o Directors. Each member shall serve or a term o three years. The ve
members shall be selected in a manner that represents a cross-section o the
industry. When an appeal is made by a member company, the Chairman o the
DSA Board o Directors shall select three o the ve members o the Appeals
Review Panel to constitute a three-person panel to review the appeal, and
shall name one o them Chairman o that panel. When possible, no companyo the three shall sell a product that specically competes with the Appel-
lant, and every eort shall be made to avoid conficts in selecting the panel.
I or any reason, a member o the panel cannot ulll his or her duties or ll
out a term or any reason, the Chairman o the Board o DSA can replace that
person with a new appointment or the remainder o the unullled term with
the concurrence o the Executive Committee.
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5. Appas Rviw Prcr
a.I a member company objects to the imposition o a remedial action by the
Administrator, it shall have a right to request a review o the Administra-
tors decision by the Appeals Review Panel. A member company must makesuch a request in writing submitted to the Administrator within 14 days o
being notied o the remedial action by the Administrator. Within 10 days
o receiving such a request, the Administrator shall notiy the Chairman o
the Board o DSA who, at that time, shall select the three-person panel in
accordance with Section 4 above. That selection shall take place within 30
days o the members request or the review.
b. As soon as the panel has been selected, the Administrator shall inorm
the Appellant o the names o the panelists, including the name o the
chairman o the panel. Within 14 days o that notication, the Administrator
shall send a copy o the Complaint and all relevant documents, including
an explanation o the basis o the decision to impose remedial action, to
the panelists with copies to the Appellant. Upon receipt o such inorma-
tion, the Appellant shall have 14 days to le with the panel its reasons or
arguing that remedial action should not be imposed along with any addi-
tional documents that are relevant. Copies o that inormation should alsobe sent to the Administrator.
c. Once the inormation has been received by the panelists rom both the
Administrator and the member company, the panel will complete its
review within 30 days or as soon thereater as practicable. The panel shall
decide whether the Administrators decision to impose remedial action
was reasonable under all o the acts and circumstances involved and shall
either conrm the Administrators decision, overrule it or impose a lesser
sanction under Part E. The panel shall be ree to contact the Administrator
and the Appellant and any other persons who may be relevant witnesses to
the Complaint, ormally or inormally as deemed appropriate. A decision by
the panel shall be nal and shall be promptly communicated both to the
Administrator and the Appellant. The costs involved in the appeal such as
costs o photocopying, telephone, ax and mailing, shall be borne by the
Appellant.
6. Cs eics mr Cpais
a. Apprva y Aiisrar:
i. I a complaint is against a member company that has a code o ethics,
which has been registered with the DSA Code o Ethics Administrator,
and the Administrator has issued an opinion that the company code is
compatible with DSAs Code o Ethics, the Complainant must rst exhaust
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all remedies under the company code o ethics beore ling a complaint
with DSAs Code Administrator. I the Complainant has exhausted those
remedies and is o the opinion that the companys disposition o the
Complaint was unsatisactory the Complainant can appeal the compa-nys decision to the DSA Code Administrator. The Complainant must rst
notiy the company o the intent to appeal to DSA. The Complainant
must also orward all relevant documentation rom the company code
proceeding to DSAs Administrator.
ii. Ater receiving such an appeal, the Administrator shall coner with the
company to obtain any additional inormation concerning the matter
as well as an explanation or the companys decision. The Adminis-
trator shall decide whether the companys resolution o the complaint
was reasonable under all o the acts and circumstances involved. I the
Administrator decides in the negative, the Administrator shall work
with the company in an eort to resolve the matter satisactorily to all
parties. I the Administrator nds that the member company will not
cooperate in that eort, the Administrator can impose remedial action
in accordance with DSAs Code o Ethics. The Complainant shall bear all
costs o an appeal rom a decision under a company code, including suchcosts as photocopying, telephone, ax and mailing charges.
b. Araiv erc Prcss: In certain instances, a member
company may provide a process whereby complaints can be addressed
and which provide an equally acceptable vehicle or complaint resolution.
In such instancesprovided the process has been ormally reviewed and
approved by the DSA Code Administratorthe member companys process
may be substituted or, and the member company relieved o, adherence to
the provision o Section D. Regulations or Enorcement o the DSA Code
o Ethics. In order or a member companys enorcement process to be
approved as an alternative to Section D, the process must contain all the
ollowing elements:
i. The company has adopted an investigation and review process that
substantially mirrors that presented in Section D and contains at more
than one level the ormal review o complaints regarding its salesper-
sons or representatives;ii. The company has adopted an appeal process to the steps outlined in
Paragraph 1 above that includes review by a neutral and competent third
party, as approved by the DSA Code o Ethics Administrator;
iii.The company oers a satisaction guarantee or the equivalent on product
sales to consumers who are not salespersons or representatives o the
member company; and
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iv.The company advises its salespersons or representatives o the dispute
resolution process in a suciently transparent manner including notices
on its website and in appropriate literature.
c. I a member company meets the above requirements o paragraph b., DSAwill indicate on its website that the member companys Code o Ethics is
an approved alternative taking precedence over the DSAs Code o Ethics
Section D. Regulations or Enorcement o the DSA Code o Ethics.
d.Those companies that are on the Company Code Alternative list will be
exempt rom the required publication provisions o Section B.2 o the Code
and will not have to show on their websites or in separate literature that
complaints against the company should be led with the DSA Code o Ethics
Administrator. The DSA Code o Ethics website will indicate, however, that
all member companies are subject to all other provisions o the DSA Code
o Ethics. Further, i the DSA Code o Ethics Administrator nds that any
company on the Alternative list has ailed to comply with the requirements
or such a listing the Administrator may remove that company rom the
list.
e. PoWeRS o the AdmInIStRAtoR
1. Ris
I, pursuant to the hearing provided or in Part D Section 3, the Administrator
determines that the accused member has committed a Code o Ethics viola-
tion or violations, the Administrator is hereby empowered to impose the
ollowing remedies, either individually or concurrently, upon the accused
member:
a. Require complete restitution to the complainant o monies paid or
the accused members products, which were the subject o the Code
complaint;
b. Require the replacement or repair o any accused members product, the
sale o which was the source o the Code complaint;
c. Require the payment o a voluntary contribution to a special assessment
und which shall be used or purposes o publicizing and disseminating the
Code and related inormation. The contribution may range up to $1,000 perviolation o the Code.
d. Require the accused member to submit to the Administrator a written
commitment to abide by the DSA Code o Ethics in uture transactions and
to exercise due diligence to assure there will be no recurrence o the prac-
tice leading to the subject Code complaint.
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e. Require the cancellation o orders, return o products purchased, cancel-
lation or termination o the contractual relationship with the independent
salesperson or other remedies.
2. Cas Cs
I the Administrator determines that there has been compliance with all
imposed remedies in a particular case, he shall close the matter.
3. Rsa Cpy
I a member reuses to voluntarily comply with any remedy imposed by the
Administrator, and has not requested a review by the Appeals Review Panel,
the DSA Board o Directors, or designated part thereo, may conclude that themember should be suspended or terminated rom membership in the Asso-
ciation. In that event the Administrator shall notiy the member o such a
decision by registered mail and shall remind the member o its right to have
the Administrators original decision reviewed by the Appeals Review Panel in
accordance with Part D Section 5 (Appeals Review Procedure) o this Code.
4. Appa r Risa Ar Sspsi r triaiI the suspension or termination is not appealed, or i it is conrmed by the
Appeals Review Panel, a suspended member, ater at least ninety days, and
a terminated member, ater at least one year, may request the opportunity
to have its suspension or termination reviewed by the Appeals Review Panel,
which may in its discretion reinstate membership.
5. Rrra Sa r ra Agcy
In the event a member is suspended or terminated, and continues to reuse tocomply with any remedy imposed by the Administrator within 30 days ater
suspension or termination, the Administrator may then consult with indepen-
dent legal counsel to determine whether the acts that have been ascertained
amount to a violation o state or ederal law. I it is determined that such a
violation may have occurred, the Administrator shall so notiy the accused
member by certied or registered mail, return receipt requested, and i appro-
priate action has not been taken by the accused member, and communicatedto the Administrator ater 15 days ollowing such notice, the Administrator
may submit the relevant data concerning the complaint to the appropriate
ederal or local agency.
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. ReStRICtIonS
1. Crrig wi ors
At no time during an investigation or the hearing o charges against a member
shall the Administrator or member o the Appeals Review Panel coner withanyone at any time concerning any alleged violation o the Code, except as
provided herein and as may be necessary to conduct the investigation and hold
a hearing. Any inormation ascertained during an investigation or hearing shall
be treated as condential, except in cases where the accused member has
been determined to have violated ederal, state or local statutes. At no time
during the investigation or the hearing o charges shall the Administrator or a
member o the Appeals Review Panel coner with a competitor o the memberalleged to be in violation o the Code, except when it may be necessary to call
a competitor concerning the acts, in which case the competitor shall be used
only or the purpose o discussing the acts. At no time shall a competitor
participate in the Administrators or in the Appeals Review Panels disposition
o a complaint.
2. dcs
Upon request by the Administrator to any member, all documents directly
relating to an alleged violation shall be delivered to the Administrator. Any
such inormation obtained by the Administrator shall be held in condence
in accord with the terms o these regulations and the Code. Whenever the
Administrator, either by his own determination or pursuant to a decision by
the Appeals Review Panel, terminates an action which was begun under the
Code, a record o the member accused shall be wiped clean and all docu-
ments, memoranda or other written material shall either be destroyed or
returned, as may be deemed appropriate by the Administrator, except tothe extent necessary or deending a legal challenge to the Administrators
or Appeals Review Panels handling o a matter, or or submitting relevant
data concerning a complaint to a local, state or ederal agency. At no time
during proceedings under this Code regulation or under the Code shall the
Administrator or member o the Appeals Review Panel either unilaterally or
through the DSA issue a press release concerning allegations or ndings o a
violation o the Code unless specically authorized to do so by the Executive
Committee o DSAs Board o Directors.
3. Pig mrs dSA
Nothing in Part F shall prevent the Administrator rom notiying, at his discre-
tion, DSA sta members o any alleged violations o the Code that have come
to his attention and which may have a bearing on a DSA pending members
qualications or active membership.
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G. ReSIGnAtIon
Resignation rom the Association by an accused company prior to comple-
tion o any proceedings constituted under this Code shall not be grounds or
termination o said proceedings, and a determination as to the Code violationshall be rendered by the Administrator at his or her discretion, irrespective o
the accused companys continued membership in the Association or partici-
pation in the complaint resolution proceedings.
h. AmendmentS
This Code may be amended by vote o two thirds o the Board o Directors.
As AdoptedJune 15, 1970
As Amendedby Board o Directors through
June 5, 2010
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