direct sale and direct marketing act 2545 - revised 1 ¹...

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DIRECT SALE AND DIRECT MARKETING ACT, B.E. 2545 (2002)1

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BHUMIBOL ADULYADEJ, REX.

Given on the 23rdDay of April B.E.2545; Being the 57thYear of the Present Reign.

His Majesty King BhumibolAdulyadej is graciously pleased to proclaim that: Whereas it is expedient to have a law on direct sale and direct marketing, This Act contains certain provisions in relation to the restriction of rights and

liberties of a person, in respect of which section 29 in conjunction with section 50 of the Constitution of the Kingdom of Thailand so permit by the virtue of law;

Be it, therefore, enacted by the King, by and with the advice and consent of the National Assembly, as follows:

Section 1.The Act shall be called the “Direct Sale and Direct MarketingAct,

B.E. 2545 (2002)”. Section 2.2This Act shall come into force after the expiration of one hundred

and twenty days from the date of its publication in the Government Gazette. Section 3.In this Act: “direct sale” means the marketing of goods and services by way of offering

the sale directly to the a consumer at the place of residence or office of the consumer or of other persons, or at a place where the regular business is not carried on, through a direct

1 Translated by Ms. Sudkaneung Somboonwong under contract for the Office of the

Council of State of Thailand's Law for ASEAN project.- Initial version- pending review and approval.

2Published in the Government Gazette Vol. 119, Part 40 kor, , dated 30 April B.E. 2545.

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sale agent or anindependent distributor, either one level or multi-level, but not including juristic acts prescribed by the Ministerial Regulation;

“direct marketing” means the marketing of goods and services by way of communicating information for the purpose of offering sale of goods or services directly to the consumer who is in the far distance with an aim to have each consumer respond and purchase the good or service from the direct marketing business operator;

“consumer” means a purchaser or the person who is received services from anindependent distributor, a direct sale agent, a direct sale business operator or direct marketing business operator, or a person who receives an offer or invitation from anindependent distributor, a direct sale agent, a direct sale business operator or direct marketing business operator, in order to encourage purchase of goods and services.

“independent distributor” means a person to whom the ownership in goods or services is transferred from a direct sale business operator and offers the sale of goods or services directly to the consumers;

“direct sale agent” means a person who is authorised from the direct sale business operator to offer the sale of goods or services directly to the consumers;

“to purchase” includes to hire, to hire-purchase, or to acquire in any way, with consideration to be given in a form of money or other interest;

“to sell” includes to let, to be hire-purchased, or to procure in any way, with consideration to be received in a form of money or other interest, and also an offer or an invitation to rent, hire-purchase, or be procured;

“goods” mean things manufactured or produced for sale; “services” mean an acceptance to work for, a giving of right or allowing use

or granting interest in any property or undertaking with consideration to be received in a form of money or other interest, but not including an employment under labour law;

“Committee” means the Direct Sale and Direct Marketing Committee; “Committee member” means a member of the Direct Sale and Direct

Marketing Committee; “Registrar” means the Secretary-General of the Consumer Protection Board; “competent official” means a government official appointed by the Minister

to carry on an execution under this Act; “Minister” means the Minister who has charge and control of this Act.

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Section 4.The Prime Minister shall have charge and control of the execution

of this Act, and shall have the power to appoint competent officials and issue Ministerial

Regulationsfor the execution of this Act.

Such Ministerial Regulations shall come into force upon their publication in

the Government Gazette.

Section 5.For an execution of this Act, the competent official shall have the following powers and duties:

(1) issue a notice to any person to give a statement, declare facts or provide a written statement, or submit an account, record, document, or any other evidence for an investigation or as a support of a review process;

(2) enter a place of business operation of a direct sale business operator or a direct marketing business operator during his or her office hours in order to inquire facts or review documents or evidence for an investigation of the execution of this Act;

(3) collect or take a sample of goods in a reasonable amount in order to investigate or analyze without having to pay for the goods, whereby the collection or the taking away, and the return of a sample of goods according to the owner’s intention, shall comply with the rules set forth by the Committee;

The exercise of power stated in (2) of the paragraph oneshall comply with the Rules set forth by the Consumer Protection Board. Such Rules shall at least require a demonstration of innocent intention upon entering a premise, a provision of a note establishing a reason to enter a premise to the person occupying the premise, and a report of the execution to the superior.

A relevant person shall reasonably facilitatethe execution in paragraph one.

Section 6.For the execution of duties under this Act, the competent official carrying on such an execution shall produce his or her identification card.

The identification card of the competent official shall be in accordance with the form prescribed by the Committee.

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Section 7.For the execution ofthis Act, the Committee members, the Subcommittee members, the Registrar and the competent officials are deemed officers under the Criminal Code.

CHAPTER I THE DIRECT SALE AND DIRECT MARKETING COMMITTEE

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Section 8.There shall be a committee called the “Direct Sale and Direct Marketing Committee” consisting of:

(1) one Chairperson appointed by the Ministerfrom persons who have knowledge and expertise on direct sale and direct marketing;

(2) ex officio members including the Direct-General of the Department of Internal Trade, the Direct-General of the Departmentof Industrial Promotion, the Commissioner-General of the Royal Thai Police and the Secretary-General of the Food and Drug Administration;

(3) Committee members appointed by the Minister: one from representatives of associations having an objective regarding direct sale business, one from representatives of associations having an objective regarding direct marketing business, and two from representatives of associations or foundations having an objective regarding consumer protection.

(4) fourqualified members appointed by the Minister from persons who have knowledge and expertise on direct sale and direct marketing, at least one shall be a qualified member from the private sector.

The Secretary-General of the Consumer Protection Board shall be member and secretary.

For the appointment of members in (3) of paragraph one, the associations having an objective regarding direct sale or direct marketing, the associations or foundations having an objective regarding consumer protection, as the case may be, nominate qualified candidates to the Council of Ministers. The rules and procedures for the nomination shall comply with rules prescribed by the Minister.

Section 9.Chairperson shall not take a position of or be a partner or a shareholder exceeding the rate of ten percent in a partnership or a company that carries on

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a business of direct sale or direct marketing within a period of one year before or during the Chair position.

Section 10.The Committee members under section 8(1), (3) and (4) shall hold

office for a term ofthree years. The Committee members who vacate office may be reappointed but not more than two consecutive terms.

Upon the expiration of the term of office under paragraph one, if a new member has not yet been appointed, the member whose term of office has expired shall be in office to continue to perform his or her duties until a new member assumes his or her duties.

Section 11.In addition to vacating office on the expiration of term under

section 10, a member appointed by the Minister vacates office upon: (1) death; (2) resignation; (3) being bankrupt; (4) being an incompetent person or a quasi-incompetent person; (5) being imprisoned due to a final judgment to a term of imprisonment

except for an offence committed through negligence or a petty offence; (6) being dismissed by the Council of Ministers due to negligence in the

performance of the duty, dishonesty, disgraceful behavior, or incapacity; In case that the member vacates office before the term expires, the Council

of Ministers may appointanother person to replace the vacated member. The replacing member shall be in office for the unexpired term of office of the replaced qualified member.

In case that the Council of Ministers appoints an additional member during the term of the already appointed members, the person additionally appointed shall be in office for the unexpired term of office of the qualified member already appointed.

Section 12.At any Committee meeting, if the Chairperson does not attend or is not present at the meeting, the members present shall elect one among themselves to preside over the meeting.

At a meeting of the Committee, the presence of not less than one-half of members is required to constitute a quorum.

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A decision of the meeting shall be made by a majority of votes.In casting a vote, each member shall have one vote.In the case of an equality of votes, the presiding member shall have an additional vote as the casting vote.

Section 13.The Committee shall have the following powers and duties: (1) reviewing complaints from the consumers who suffer damages from the

undertaking of an independent distributor, direct sale agent, direct sale business operator, or direct marketing business operator;

(2) notifying or advertising news information regarding the goods or services that may cause damage or disgrace to the consumer. In this case, the notification or advertisement may specify the name of goods or services, independent distributor, direct sale agent, direct sale business operator, or direct marketing business operator;

(3) controlling and monitoring direct sale business operators and direct marketing business operators, including following their behaviour in operating direct sale and direct marketing;

(4) setting out rules or notifications regarding the execution under this Act; (5) reviewing an appeal against the Registrar’s order; (6) providing opinions to the Council of Ministers regarding the policy and

measures in controlling and monitoring, along with promotion and support of direct sale and direct marketing business operation, and providing opinions in various issues involving direct sale and direct marketing business operation as assigned by the Council and Ministers or the Minister;

(7) monitoring and expediting the execution within the powers and duties prescribed by law of the competent officials, government sector, and other State agencies, and also expediting any legal proceeding subject to liability under this Act;

(8) making recommendations in the issuance of the Ministerial Regulations under this Act;

(9) performing other acts as entrusted by the Council of Ministers or the Minister.

For the execution under this Act, the Committee may authorise the Consumer Protection Board to execute an act or prepare recommendations for the Committee to consider and proceed.

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Section 14.The Committee may appoint the Subcommittee in order to consider issues or execute any act on behalf of the Committee.

Section 15.Section 12 shall apply to meetings of the Subcomittee, mutatis mutandis.

Section 16.For the execution of duties under section 13 and section 14, the

Committee or Subcommittee shall have the power to order any person to provide facts, explanations, recommendations, or opinions; or submit relevant documents, evidence or other things in support of its review.

Section 17.For the execution of duties under this Act, the Committee shall

give an opportunity to the accused or the suspect who may have acted in violation of this Act to reasonably explain facts and show opinions, except in the case of necessity and emergency whereby, if neglected, a person may be grossly damaged or public interest may be adversely affected.

For any requirement or order made under this Act, the Committee shall take into account damage that may occur to consumers, independent distributors, direct sale agents, direct sale business operators and direct marketing business operators, and in case that the Committee agrees to set a condition or a temporary measure in support of enforcing compliance with the requirements or orders, it may do so.

Section 18.The Consumer Protection Board under the law on consumer

protection shall be responsible in the administrative works of the Committee and shall have the duty to accept applications to register direct sale or direct marketing business operation, monitor behaviour in operating direct sale or direct marketing businesses, and execute works in compliance with this Act.

CHAPTER II

DIRECT SALE AND DIRECT MARKETING BUSINESS OPERATION ------------------

Section19.A direct sale business operator or direct marketing business

operator shall not carry on his or her operation in a way that persuades other persons to participate in a direct sale or direct marketing network upon an agreement to give certain

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benefitscalculated from the increasing number of participants in return of finding additional participants to join the network.

Part 1 Direct Sale Business Operation

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Section 20.No person shall operate the business of direct sale, except that the business is registered under this Act.

Section 21.A direct sale business operator shall operate the business in

accordance with his or her compensation payment plan as submitted to the Registrar under section 38.

A compensation payment plan shall be as follows: (1) The plan shall not require an independent distributor or a direct sale

agent which is not an employee to accept compensation,which constitutes his or her main income, from recruiting people or recommending other independent distributors or direct sale agents which are not employees to join the network of direct sale business operation;

(2) The compensation which constitutes main income of an independent distributor or a direct sale agent which is not an employee depends on the sale of goods or services to the consumers, including the purchase for personal use or consumption.

(3) The plan shall not compel an independent distributor to purchase goods.

(4) The plan shall not induce an independent distributor to unreasonably over-purchase goods.

(5) The plan shall show an accurate, realistic, or clear method of calculating compensation payment.

(6) Other requirements that are prescribed by the Committee. Any compensation payment plan that differs from the requirements in

paragraph two shall be effective only for the part that is fair to the independent distributor or direct sale agent which is not an employee.

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Section 22.A direct sale business operator shall not charge a membership fee, a fee for training, materials for sale promotion, or other fees in connection with participation in the direct sale business operation from an independent distributor or direct sale agent which is not an employee at a rate higher than the rate prescribed by the Committee.

Section 23.The contract between an independent distributor and a direct

sale business operator shall be made in writing containing the following details, but not limited to:

(1) clear conditions regarding payment of compensation according to the compensation payment plan;

(2) clear conditions regarding an application fee, a fee for training, materials for sale promotion, or other fees;

(3) clear conditions regarding a repurchase of goods, materials for sale promotion, guideline, and materials in support of the business, by a direct sale business operator from an independent distributor, and a certain period of time during which the independent distributor may exercise such a right;

The provision in (1) and (2) of paragraph one shall also apply to the direct sale agents who are not employees.

Section 24.In offering sale of goods or services directly to the customers, the

independent distributor shall comply with the conditions and sale plan set out by the direct sale business operator.

Section 25.If the independent distributor exercises his or her right to return

the goods, materials for sale promotion, guideline, or materials in support of the business, purchased directly from the direct sale business operator, the direct sale business operator shall repurchase them at the price that the independent distributor has paid within fifteen days from the date that the independent distributor exercises his right to return the items. In case of a return upon an expiration of a contract under section 23, the direct sale business operator has a right to deduct the operating expenses not exceeding the rate prescribed by the Committee, and has a right to offset any amount due in connection with the contract under section 23 from the amount payable by the independent distributor.

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Section 26.In entering a premise in order to contact with a consumer directly at his or herplace of residence, place of business operation of the consumer or other person, or other place where his or her regular business operation is not carried on, in order to offer a sale of goods, the independent distributor or direct sale agent shall receive a permission from the consumer or the person occupying the place before entering, and shall not act in any way that causes disturbance or annoyance to the person. The independent distributor or direct sale agent shall present the national identification card and an identification card for independent distributors or direct sale agents issued by the direct sale business operator.

Part 2 Direct Marketing Business Operation

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Section 27.No person shall carry on a business of direct marketing, except the direct marketing business is registered under this Act.

Section 28.Messages in communication of information for the purpose of sale

of goods or services of a direct marketing business operator shall comply with the Ministerial Regulation.

Section 29.The provisions regarding consumer protection for the part

involving advertisement under the law on consumer protection shall apply to the communication of information in order to offer sale of goods or services of the direct marketing business operator, mutatis mutandis. The power and duty of the Consumer Protection Board shall be deemed a power and duty of the Minister. The powers and duty of the Committee on Advertisement shall be deemed a power and duty of the Committee.

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CHAPTER III CONSUMER PROTECTION

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Section 30.An independent distributor, direct sale agent or direct marketing business operator, has a duty to deliver documentsregarding the sale and purchase of goods or services to the consumer.

The documentsregarding the sale and purchase in paragraph one shall contain messages in the Thai language that can be read and understood easily. They shall specify the name of purchaser and seller, the date of purchase and delivery of goods or services, and the consumer’s right to terminate the contract. The right to terminate a contract shall be written with letters that can been seen clearer than other messages.

Section 31.The Committee shall have the power to require particular details

in the documentsregarding the sale and purchase of goods or services through direct sale or direct marketing. The essential details required shall be the price under which the consumer receives protection, and the type of goods or services.

The documentsregarding the sale and purchase in paragraph one shall include the following details, but not limited to:

(1) details in accordance with section 30; (2) due date, place and method of payment; (3) place and method of delivery of goods or services; (4) procedures regarding contract termination; (5) return method; (6) warranty; (7) exchange policy in case of damage or defect. The details required to be included in the documentregarding the sale and

purchase shall be published in the Government Gazette. Section 32.Any sale and purchase of goods or services that the independent

distributor, direct sale agent or direct marketing business operator does not provide the documents containing details prescribed in section 30 or section 31 shall be non-binding to the consumer.

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Section 33.Upon purchasing goods or services through a direct sale or direct marketing, the consumer has a right to terminate the contract by delivering a written letter stating his or her intention to terminate the contract within seven days from the date that he or she receives the goods or services to the direct sale business operator or direct marketing business operator. In case of direct sale, the consumer may also notify the involving independent distributor or direct sale agent.

The provision in paragraph one shall not apply to the type, price or kind of goods or services as prescribed in the Royal Decree.

Section 34.The consumer exercising the right to terminate the contract in

paragraph three shall elect to proceed in one of the following ways: (1) return the goods to the independent distributor, direct sale agent, or

direct sale business operator, in case of direct sale; or return the goods to the direct marketing business operator in case of direct marketing;

(2) keep the goods in a reasonable manner for a period of twenty-one days from the date that the right to terminate the contract is exercised, except that the goods is easily perishable and cannot be maintained in good condition within the specified period. In such a case, the goods shall be maintained within a period and method suitable for the condition of the goods. Upon the expiration of the specified period, the consumer may or may not keep the goods;

The consumer who elects to proceed according to (2) ofparagraph one has a duty to return the goods to the independent distributor, direct sale agent, direct sale business operator or direct marketing business operator, as the case may be, at the place of domicile of the consumer. If the direct sale business operator or direct marketing business operator requests that the consumer return the goods by post with a reverse charge within the period specified in (2) ofparagraph one, the consumer shall return the goods according to the method so requested.

If the goods is a consumption good, the consumer shall have a duty to return only the part remaining from the use taking place before the termination of contract.

The rules and method of returning the goods or services shall comply with the Ministerial Regulation.

The consumer has a right to retain the goods until he or she is refunded the amount of money paid for the goods.

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Section 35.Subject to section 34, if goods or services are damaged or lost on the consumer’s fault, or the consumer makes it impossible to return the goods or services, the consumer shall pay compensation to the independent distributor, direct sale agent, direct sale business operator, or direct marketing business operator, as the case may be, except that the damage takes place regularly from opening or mixing in order to use the goods or services

Section 36.Upon the consumer’s election to terminate the contract in

accordance with section 33, the independent distributor, direct sale agent, direct sale business operator, or direct marketing business operator shall refund the full amount of price that the consumer paid upon the purchase of such goods or services within fifteen days from the date that the letter showing an intention to terminate the contract is received.

In case that the independent distributor, direct sale agent, direct sale business operator, or direct marketing business operator fails to refund in the amount and period specified in paragraph one, the independent distributor, direct sale agent, direct sale business operator, or direct marketing business operator shall pay a fine to the consumer at a rate prescribed by the Committee.

Section 37.The terms of warranty of goods or services shall be prepared in

Thai language and clearly specify the consumer’s right of claim according to the warranty. The conditions of claim shall be easily understood.

The details regarding the terms of warranty of goods or services in paragraph one shall comply with the rules prescribed by the Committee.

CHAPTER IV REGISTRATION OF DIRECT SALE AND DIRECT MARKETING BUSINESS OPERATION

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Section 38.Any person wishing to operate a direct sale or direct marketing business shall submit an application to the Registrar in accordance with the rules and procedures prescribed by the Committee.

A direct sale business operator shall also submit a compensation payment plan along with the application in paragraph one.

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In case that there is a change in the compensation payment plan, the direct sale business operator shall notify the Registrar regarding the change before proceeding according to the changed plan.

Section 39.The application to register a direct sale or direct marketing

business operation shall comply with the form prescribed by the Committee. It shall include the following details, but not limited to:

(1) the name of the direct sale or direct marketing business operator; (2) the place of domicile of the direct sale or direct marketing business

operator; (3) type or kind of goods or services; (4) method of sale of goods or services.

CHAPTER V REGISTRAR

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Section 40.In an execution of the Registrar’s duty under this Act, the Registrar has the power to call upon a relevant person to provide information, documents or evidence as necessary in support of a consideration or investigation.

Section 41.After receiving an application to register a direct sale or direct

marketing business operation, the Registrar shall consider and investigate the following: (1) the compensation payment plan shall not be contrary to the law,

public order or good morals; (2) the quality and characteristics of goods or services shall be consistent

with the information regarding the goods or services during the time that the information is communicated to offer the sale;

(3) the contract contains accurate and complete items as prescribed by the Committee.

In case that the Registrar finds that the application is satisfied in accordance with paragraph one of section 38, and section 39, the Registrar shall proceed with the registration of the direct sale or direct marketing business operation and notify the applicant in writing within forty-five days from the date that the Registrar receives the application.

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In case that the Registrar finds that the application is unsatisfied in accordance with paragraph one of section 39, the Registrar shall order the applicant to correct or amend the application within a reasonable period. Upon the applicant’s correction or amendment to the application, the Registrar shall proceed with the registration of the direct sale or direct marketing business operation within thirty days from the date that such documents are received.

In case that the applicant fails to comply with the order to correct or amend the application within the specified period, the Registrar shall issue an order to deny a registration of the direct sale or direct marketing business operation. The Registrar shall also notify the applicant in writing regarding the denial accompanying with the reason to deny within seven days from the date that the specified period for the correction or amendment expires.

Section 42.In case that it appears to the Registrar later that any direct sale or

direct marketing business operator does not operate the business in compliance with this Act, the Registrar shall have the power to revoke a registration of direct sale or direct marketing business and notify the business operator in writing within seven days from the date of revocation of the registration.

CHAPTER VI APPEAL

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Section 43.In case that the Registrar issues an order to deny the application to register the direct sale or direct marketing business operation under section 41 or to revoke the registration of direct sale or direct marketing business operation under section 42, the applicant, the direct sale business operator, or the direct marketing business operator, as the case may be, shall have a right to appeal in writing to the Committee within thirty days from the date that the he or she receives a notice regarding the order to deny or revoke the registration from the Registrar.

The Committee’s ruling is final. Section 44.Rules and procedures, and a review process, shall comply with

the regulation prescribed by the Committee.

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CHAPTER VII PUNISHMENT -----------------

Section 45.3Any person obstructs or fails to provide convenience to a

competent officer who carries on an execution under section 5 or fails to comply with the order of the Committee or Subcommittee under section 16 shall be liable to imprisonment for a term of not exceeding one month, or to a fine not exceeding ten thousand baht or to both.

Section 46.Any person violates section 19 shall be liable to imprisonment for

a term of not exceeding five years, or to a fine not exceeding five-hundred thousand baht. Section 47.Any personviolates section20 or section 27shall be liable to

imprisonment for a term of not exceeding one year, or to a fine not exceeding one-hundred thousand baht, or to both; and to additional fine at a daily rate not exceeding ten thousand baht throughout the time of violation.

Section 48.Any personviolates paragraph one of section 21 shall be liable to

a fine not exceeding three-hundred thousand baht. Section 49.Any personviolates section22 or section 28shall be liable to

imprisonment for a term of not exceeding six months, or to a fine not exceeding fifty thousand baht, or to both.

Section 50.Any personviolates section 23 or section 25 shall be liable to a

fine not exceeding fifty thousand baht. Section 51.Any personviolates section 26, paragraph one of section 30, or

section 37, shall be liable to a fine not exceeding thirty thousand baht.

3Section 45 is amended by the Direct Sale and Direct Marketing Act (No. 2), B.E. 2550 (2007).

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Section 52.Any direct sale business operator fails to notify the Registrar regarding the change in the compensation payment plan in accordance with paragraph three of section 38shall be liable to a fine not exceeding three-hundred thousand baht.

Section 53.In the case where the offender is liable under this Act and within

five years after the term of punishment ends violates a provision under this Act again, he or she shall be liable to a term of punishment twice of the punishment prescribed for such violation.

Section 54.(Invalid).4 (The Supreme Court Ruling No. 12/2555, dated 28 March B.E. 2555, states that

section 54 of the Direct sale and Direct Marketing Act, B.E. 2545 (2002) only the part that contains a presumption that finds the managing director, director, or any person responsible for the operation of such juristic person, is liable to a criminal punishment jointly with the juristic person offender, without any act or intention on his or her partto be involved in the wrongdoing of the juristic person, is unconstitutional. Hence, paragraph two of section 39 is invalid pursuant to section 6 of the Constitution.)

Section 55.All offences under this Act, except for the case under section 46,

may be settled by the Committee by way of payment of a fine. The Committee shall have the power to authorise the Subcommittee, an investigator, or an official to settle a fine and set forth the rules in the settlement or any other conditions with which the authorised person shall comply as it sees appropriate.

Subject to the provision in paragraph one, if the investigator finds in the investigation that any person violates a provision under this Act and such a person agrees to settle by way of paying a fine, the investigator shall transfer the file to the Committee or the person authorised to settle a fine by the Committee under paragraph one within seven days from the date that the person agrees to settle.

Upon payment by the offender of the settled amount of the fine, the case shall be deemed settled under the Criminal Procedure Code.

4In the case where the offender liable under this Act is a juristic person, the managing director, director, or any person responsible for the operation of such juristic person shall also be liable for the punishment prescribed for such offence, except where such person can prove that he or she was not involved in the offending act committed by the juristic person.

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TRANSITORY PROVISIONS ----------------

Section 56.The direct sale or direct marketing business operator who has

already carried on the business operation on the date that this Act comes into force, shall register the direct sale or direct marketing business operation within one-hundred and twenty days from the date that this Act comes into force.

Countersigned by: Police Lt. Col. Thaksin Shinawatra Prime Minister

direct sale and direct marketing act 2545 - revised 1 ¹...

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