Direct Selling Association 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.

A. Code of Conduct

1. Deceptive or Unlawful Consumer or Recruiting Practices

No member company of the Association shall engage in any deceptive, unlawful, or unethical consumer or recruiting practice. Member companies shall ensure that no statements, promises or testimonials are made which are likely to mislead consumers or prospective salespeople.

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. A consumer's order for products and services shall be fulfilled in a timely manner.

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. Identification and Privacy

Sellers shall truthfully identify themselves, their company, their products and the purposes of their solicitation to the prospective customer. Contact with the consumer shall be made in a reasonable manner and during reasonable hours to avoid intrusiveness. A demonstration or sales presentation shall discontinue upon the request of the consumer.

6. 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.

7. Inventory Purchases

A. Any member company with a marketing plan that involves selling products directly or indirectly to independent salespeople 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 inventory, in the possession of that salesperson and purchased by that salesperson for resale prior to the date of termination of the salesperson's business relationship with the company or its independent salespeople. For purposes of this Code, "reasonable commercial terms" shall include the repurchase of marketable inventory within twelve (12) months from the salesperson's date of purchase at not less than 90% of the salesperson's original net cost less appropriate set-offs and legal claims, if any. For purposes of this Code, products shall not be considered "currently marketable" if returned for repurchase after the products' commercial reasonable usable or shelflife period has passed; nor shall products be considered "currently marketable" if the company clearly discloses to salespeople prior to purchase that the products are seasonal, discontinued, or special promotion 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 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 financial benefit related to the sales of 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 if any items not otherwise covered by this section are ineligible for repurchase by the company.

8. Earnings Representations

No member company shall misrepresent the actual or potential sales or earnings of its independent salespeople. Any earnings or sales representations that are amde by member companies shall be based on documented facts.

9. Inventory Loading

A member compnay shall not require or encourage an independent salesperson to purchase inventory in an amount which unreasonably exceeds that which can be expected to be resold and/or consumed within a reasonable period of time.

10. Payment of Fees

Neither member companies nor their representatives shall ask individuals 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 direct selling business