You are hereCode of Ethics (1988)
Code of Ethics (1988)
Disclaimer: Please note the codes in our collection might not necessarily be the most recent versions. Please contact the individual organizations or their websites to verify if a more recent or updated code of ethics is available. CSEP does not hold copyright on any of the codes of ethics in our collection. Any permission to use the codes must be sought from the individual organizations directly.
Code of Ethics
The Direct Selling Association, recognizing that companies engaged in direct selling assume certain responsibilities toward consumers arising out of the personal-contact method of distribution of their products and services, hereby sets forth the basic fair and ethical principles and practices to which member companies of the association will continue to adhere in the conduct of their business.
The Direct Selling Association is the national trade association of the leading firms that manufacture and distribute goods and services sold directly to consumers. The Association's mission is "to protect, serve and promote the effectiveness of member companies and the independent business people marketing their products and to assure the highest level of business ethics and service to consumers." The cornerstone of the Association's commitment to ethical business practices and consumer service is its Code of Ethics. Every member company pledges to abide by the Code's standards and procedures as a condition of admission and continuing membership in the Association. Consumers can rely on the extra protection provided by the Code when they purchase products or services from a salesperson associated with a member company of the Direct Selling Association. For a current list of Association members, contact DSA, 1776 K St., N.W., Washington, DC 200061(202) 293-5760.
A. CODE OF CONDUCT
1. Deceptive or Unlawful consumer Practices
No member company of the Association shall engage in any deceptive or unlawful consumer practice.
2. Products or Services
The offer of products or services for sale by member companies of the Association shall be accurate and truthful as to price, grade, quality, make, value, performance, quantity, currency of model, and availability.
3. Terms of Sale
A written order or receipt shall be delivered to the customer at the time of sale, which sets forth in language that is clear and free of ambiguity:
A. All the terms and conditions of sale, with specification of the total amount the customer will be required to pay, including all interest, service charges and fees, and other costs and expenses as required by federal and state law;
B. The name and address of the salesperson or the member firm represented.
4. Warranties and Guarantees
The terms of any warranty or guarantee offered by the seller in connection with the sale shall be furnished to the buyer in a manner that fully conforms to federal and state warranty and guarantee laws and regulations. The manufacturer, distributor and/or seller shall fully and promptly perform in accordance with the terms of all warranties and guarantees offered to consumers.
5. Pyramid Schemes
For the purpose of this Code, pyramid or endless chain
schemes shall be considered consumer transactions actionable under this Code. The Code Administrator shall determine whether such pyramid or endless chain schemes constitute a violation of this Code in accordance with applicable federal, state and/or local law or regulation.
B. RESPONSIBILITIES AND DUTIES
In the event any consumer shall complain that the salesperson or representative offering for sale the products or services of a member company has engaged in any improper course of conduct pertaining to the sales presentation of its goods or services, the member company shall promptly investigate the complaint and shall take such steps as it may find appropriate and necessary under the circumstances to cause the redress of any wrongs which its investigation discloses to have been committed.
Member companies will be considered responsible for Code violations by their solicitors and representatives where the Administrator finds, after considering all the I-acts, that a violation of the Code has occurred and the member has either authorized such practice found to be violative, condoned it, or in any other way supported it. A member shall be considered responsible for a Code violation by its solicitors or representatives, although it had no knowledge of such violation, if the Administrator finds that the member was culpably negligent by failing to establish procedures whereby the member would be kept informed of the activity of its solicitors and representatives. For the purposes of this Code, in the interest of fostering consumer protection, companies shall voluntarily not raise the independent contractor status of salespersons distributing their products or services under its trademark or trade name as a defense against Code violation allegations and such action shall not be construed to be a waiver of the companies' right to raise such defense under an,,, other circumstances.
The members subscribing to this Code recognize that its success will require diligence in creating an awareness among their employees and/or the independent wholesalers and retailers marketing 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 of the breach of this Code is considered a violation of the Code.
1. Interpretation and Execution
The Board of Directors of the Direct Selling Association shall appoint a Code Administrator to serve for a fixed to be set by the Board prior to appointment. The Bo have the authority to discharge the Administrator for only. The Board shall provide sufficient authority to c the Administrator to properly discharge the responsible entrusted to the Administrator under this Code. The Administrator will be responsible directly and solely to the Board. The Board of Directors will establish all regulation necessary to administer the provisions of this Code.
2. Code Administrator
The Administrator shall be a person of recognize integrity, knowledgeable in the industry, and of a stature that will command respect by the industry, and from the public shall appoint a staff adequate and competent to assist the discharge of his duties. During his term of office, neither the Administrator nor any member of his staff shall be an officer, director, employee, or substantial stockholder in any member or affiliate of the DSA. The Administrator shall disclose all holdings of stock in any member companies, prior to appointment and shall also disclose any subsequent purchases of such stock to the Board of Directors. The Administrator shall also have the same rights of indemnification as the Directors and Officers have under the bylaws of the Direct Selling Association.
The Administrator, in accordance with the regulation established by the Board of Directors as provided herein, shall hear and determine all charges against members subscribing hereto, affording such members or persons an opportunity be heard fully. The Administrator shall the power to originate any proceedings, and shall at all times have the full cooperation of all members.
The Administrator shall determine whether a violation of 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 the Code and its application, and , when appropriate, may suggest, for consideration by the Board of Directors, new regulations, definitions, or other implementations to make the Code more effective.
The Administrator shall undertake through his office to maintain and improve all relations with better business bureaus and other organizations, both private and public, with view toward improving the industry's relations with the public and receiving information from such organizations relating to the industry's sales activities.
D. REGULATIONS FOR ENFORCEMENT OF DSA CODE OF ETHICS
1. Receipt of Complaint
Under receipt of a complaint from a bona fide consumer or where the Administrator has reason to believe that a member has violated the Code of Ethics, the Administrator shall forward a copy of the complaint, if any, to the accused member together with a letter notifying the member that a preliminary investigation of a specified possible violation pursuant to Section 3 is being conducted and requesting the member's cooperation in supplying necessary information, documentation and explanatory comment. If a written complaint is not the basis of the Administrators investigation, then the Administrator shall provide written notice as to the basis of this reason to believe that a violation has occurred. Further, the code Administrator shall honor any requests for confidential treatment of the identity of the complaining party made by that party.
2. Cooperation with the Code Administrator
In the event a member refuses to cooperate with the Administrator and refuses to supply necessary information, documentation and explanatory comment, the Administrator shall serve upon the member, by registered mail, a notice affording the member -,tn opportunity to appear before the Board of Directors on a date certain to show cause why its membership in the Direct Selling Association should not be terminated. In the event the member refuses to appear before the Board or refuses to comply with the Board's decision, the Board may terminate the offender's membership without further notice or proceedings.
3. informal investigation and Disposition Procedure
The Administrator shall conduct a preliminary investigation, making such investigative contacts as are necessary to reach an informed decision as to the alleged Code violation.
If the Administrator determines, after the informal investigation that there is no need for further action or that the Code violation allegation lack-,s merit, further investigation and administrative action on the matter shall terminate and the complaining party shall be so notified.
The Administrator may, in his discretion, remedy an alleged Code violation through informal. oral and written communication with the accused member company.
If the Administrator determines that the allegation has sufficient merit. in that the apparent violations are of such a nature, scope or frequency so as to require remedial action pursuant to Part E and that the best interests of consumers, the Association and the direct selling industry require remedial action, he shall notify the member of his decision, the reasoning and facts which produced it, and the nature of the remedy he believes should be effected. The Administrator's notice shall offer the member an opportunity to volute consent to accept the suggested remedies without the necessity of a Section 4 hearing. If the member desires to dispose of the matter in this informal manner it will, within 2 advise the Administrator, in writing, of its willingness t sent. The letter to the Administrator may state that the member's willingness to consent does not constitute an admission or belief that the Code has been violated.
4. Formal Hearing Procedure
If a hearing is requested by an accused member or,, opinion of the Administrator, the informal procedure provided for in Part D 3 above does not provide adequate remedy for the consumer, or, if in his opinion, the alleged violations of the Code are of such a nature, scope or frequency as to support a reasonable belief by the Administrator evidentiary hearing is necessary to determine whether the allegations of Code misconduct warrant the implementation of the remedial sanctions of Part E, the Administrator may call for a formal hearing. The purpose of such a it is to gather evidence and take testimony surrounding Code of Ethics complaint.
The Administrator shall notify, in writing, the accused member of his intent to hold a hearing, and shall specify such notification the nature and substance of the consumer complaint to be heard at the hearing. The Administrator shall make reasonable attempts to arrange a mutually convenient place and time for the hearing to occur. Such notification shall precede bv at least twenty days any proposed date for an evidentiary hearing concerning the allegations of the Ethics misconduct. Hearings may be rescheduled for cause shown.
The accused member shall have the right to submit data deemed relevant to the proceeding, to appear in or through counsel, and rebut the charges against it. Both parties shall have the right to call witnesses, and the accused party shall have the right to call and confront the complaining party, providing the calling party shall bear any costs involved in calling the complaining party or any witness. Both parties shall also have the right to cross-examine any witnesses who are called. The Administrator shall determine, on evidence presented by the company and evidence submitted by the complainant, whether a Code violation has occurred. The decision by the Administrator shall be issued no later than ten days from the date of the hearing and forthwith sent to the accused member, the President and the Chairman of the Board of DSA, and the complainant. The decision will include the remedial measures, if any, that the Administrator has invoked pursuant to Part E. The member shall then have ten days from date of receipt to comment to the Administrator, in writing, on the findings contained in the decision, or to request a special arbitration procedure a scribed in Part E.
E. POWERS OF THE ADMINISTRATOR
If, pursuant to the hearing provided for in Part D 4, the Administrator determines that the accused member has committed a Code of Ethics violation or violations, the Administrator is hereby empowered to impose the following remedies, either individually or concurrently, upon the accused member:
(1)request complete restitution to the consumer of monies paid for the accused member's, products which were the subject of the Code complaint;
(2) request the replacement or repair of any accused member's product, the sale of which was the source of the Code complaints
(3) request the payment of a voluntary contribution to a special assessment fund which shall be used for purposes of publicizing and disseminating the Code and related information. The contribution may range up to $500 per violation of the Code.
(4) request the accused member to submit to the Administrator a written commitment to abide by the DSA Code of Ethics in future transactions and to exercise due diligence to assure there will be no recurrence of the practice leading to the subject Code complaint.
If the Administrator determines that there has been compliance with all imposed remedies in a particular case, he shall terminate the matter.
In the event that a member refuses to voluntarily comply with any remedy imposed by the4 Administrator within thirty days, the Administrator may then consult with independent legal counsel to determine whether the facts that have been ascertained amount to a violation of state or federal law. If the Administrator believes that a violation of state or federal law has occurred, he shall so notify the accused member by certified or registered mail, return receipt requested, and after ten days following such notice the Administrator shall submit the relevant data concerning the complaint to the appropriate federal or local agency.
F. APPEAL TO OUTSIDE ARBITRATOR
Following a final decision by the Administrator that a Code violation has occurred, the accused member may appeal the decision by the Administrator to an independent arbitrator. The request by the accused member must be in a written statement to the Administrator no later than ten days after receipt to the Administrator's final decision. Upon receipt of such request, the Administrator shall set a date for an arbitration hearing within a reasonable period of time not to exceed 60 days from the date of the request. If such an appeal is filed, any sanctions imposed under Section E shall be stayed until the conclusion of arbitration. The choice of said arbitrator shall be made by the accused company from a list provided by an existing arbitration organization such as the American Association of Arbitrators. All attendant costs of such an arbitration, including witness fees and travel expenses, but not including any expenses related to the time or travel of the Administrator and DSA staff, shall be borne by the requesting member.
The arbitrator shall receive, at least five days prior to the hearing date, submissions from the Administrator and the accused member outlining their respective positions concerning the allegations of Code violations. The accused member shall be given fifteen days' notice of the date of the hearing. At the hearing, the accused member shall have an opportunity to be represented by counsel, to refute the charges against it, and to hear the evidence and confront and cross-examine witnesses against it. The member will further have the opportunity to present witnesses for its position, which witnesses also shall be subject to confrontation and cross-examination by the Administrator. All witnesses and the Administrator shall be subject to questioning by the arbitrator. The Administrator also may be represented by counsel.
A transcript will be made of the hearing at the request and expense of the accused member, or at the expense of the Association if the Administrator determines that a transcript is necessary to protect the integrity of the Association and/or the rights of the complaining witnesses. If a transcript is so requested, or if the Administrator determines that a record of the hearing is necessary, a tape recording of the hearing may be made in lieu of a transcript if all parties agree.
The decision of the arbitrator is final and is binding upon both the Administrator and the member. The Arbitrator shall, within ten days of the hearing, issue his decision in writing to the Administrator, the accused company and the President and Chairman of the Board of DSA.
(1) At no time during an investigation or the hearing of charges against a member shall the Administrator or outside arbitrator confer with anyone at any time concerning any alleged violation of the Code, except as provided herein and as may be necessary to conduct the investigation and hold a hearing. Any information ascertained during an investigation or hearing shall be treated as confidential, except in cases where the accused member has been determined to have violated federal, state or local statutes. At no time during the investigation or the hearing of charges shall the Administrator or outside arbitrator confer with a competitor of the member alleged to be in violation of the Code, except when it may be necessary to call a competitor as a witness to the facts, in which case the competitor shall be used only for the purpose of testifying as to the facts. At no time shall a competitor participate in the Administrator's or in the outside arbitrator's disposition of a complaint.
(2) Upon request by the Administrator to any member, all documents directly relating to an alleged violation shall be delivered to the Administrator. Any such information obtained by the Administrator shall be held in confidence in accord with the terms of these regulations and the Code. Whenever the Administrator, either by his own determination or pursuant to a decision by an outside arbitrator, terminates an action which was begun under the Code, a record of the member accused shall be wiped clean and all documents, memoranda or other written material shall either be destroyed or returned, as may be deemed appropriate by the Administrator, except to the extent necessary for submitting relevant data concerning a complaint to a local, state, or federal agency. At no time during proceedings under this Code regulation or under the Code shall the Administrator or outside arbitrator either unilaterally or through the DSA issue a press release concerning allegations or findings of a violation of the Code unless specifically authorized to do so by the Board of Directors.
Resignation from the Association by an accused company prior to completion of any proceedings constituted under this Code shall not be grounds for termination of said proceedings, and a determination as to the Code violation shall be rendered by the Administrator and/or arbitrator, irrespective of the accused company's continued membership in the Association or participation in the complaint resolution proceedings.
This Code may be amended by vote of two-thirds of the Board of Directors. As Adopted June 15, 1970 As Amended by Board of Directors through December 5, 1988
The DSA Code Administrator is appointed by the Board of Directors to receive complaints against member companies from consumers, conduct investigations and determine in each case whether a violation bas occurred and what remedy, if any, is appropriate. The Administrator is chosen on the basis of his knowledge of the industry, stature in the consumer affairs and business communities and reputation for competence and integrity. All investigations by the Code Administrator are completely confidential.
DSA Code Administrator 1776 K Street NW Suite 600 Washington, DC 20006 (202) 293-5760