3. Conduct towards Direct Sellers
3.1 Direct sellers' appointment
As a condition for belonging to a company´s sales organization, companies shall require that their direct sellers adhere to this code or to ethical rules that meet its principles.
Companies and direct sellers must not use disloyal, misleading or unfair recruiting practices.
3.3 Business Information
Information provided by companies to prospective or existing direct sellers concerning the earnings opportunity and related rights and obligations shall be accurate and complete. Companies should not make any factual representation to a prospective direct seller that cannot be verified or make any promise that cannot be fulfilled. Companies shall not present the advantages of the selling opportunity to any prospective recruit in a false or deceptive manner.
3.4 Earnings claims
Companies and direct sellers shall not misrepresent the actual or potential sales or earnings of their direct sellers. Any earnings or sales representations made shall be based upon documented facts.
Companies shall provide their direct sellers with a written agreement to be signed by both the company and the direct seller, containing all essential details of the relationship between them. Companies shall inform their direct sellers of their legal obligations, including any applicable licenses, registrations and taxes.
Companies and direct sellers shall not require other direct sellers or prospective direct sellers to assume unreasonably high entrance fees, training fees, franchise fees, fees for promotional materials or other fees related solely to the right to participate in the company´s distribution system.
Upon termination of a direct seller's relationship with a company, the company shall buy back any unsold, re-saleable Product inventory, promotional material, sales aids and demonstration kits and will refund the original net cost, minus a charge of up to 10% of the net purchase price. The Company may also deduct the cost of any benefit received by the direct seller based on the original purchase of the returned goods.
Companies shall not require or encourage Direct Sellers to purchase product inventory in unreasonably large amounts. The following should be taken into account when determining the appropriate amount of product inventory: the relationship between inventory and realistic sales possibilities, the nature and competitiveness of the products and the market and the company´s product return and refund policies.
3.9 Remuneration and Accounts
Companies shall provide direct sellers with periodic accounts concerning, as applicable, sales, purchases, details of earnings, bonuses, discounts, deliveries, cancellations and other relevant data, in accordance with the company´s arrangement with the direct sellers. All monies due shall be paid and any withholdings made in a commercially reasonable manner.
3.10 Direct Seller Training
Companies shall provide adequate training to enable direct sellers to operate ethically. This will be achieved through training sessions, manuals, written guides or visual aids.