Direct Selling Association of New Zealand Code of PracticeDirect Selling Association
Code of Practice
For Direct Selling In New Zealand

Revision Adopted 3 May 2018

Issued on 28 June 20181

Direct Selling Association of New Zealand Code of Practice

Index

ClausePage

Part I Introduction
Background, objectives and obligations
Scope
Exemptions
CitationInterpretations and Glossary of Terminology

1
2
3
4
5

4
4-5
5
5
5
6-7

Part II Conduct for the Protection of Consumers
Conduct towards consumers (Sales methods and hours)
Customer Contact⇒ Identification⇒ Explanation and Demonstration⇒ Marketing Claims or literature
Order Forms
Inducements or Referral Selling
Pyramid Sales
DeliveryRight of Cancellation, cooling off and return of goods
Cost of Returning Goods
Substitute goods or services
Consumer Guarantees and After Sales Service

6
7
7
7
7
8
9
10
11
12
13
14
15

8
8
8
8
9
9
9
9
10
10
10
10
10
11

Part III Privacy and Information Protection
Limited definition of Consumer
Collection and Use of Personal Information
Access to information and right of correction
Maintenance of Lists
Use of Lists
Information Collected on Direct Sellers

16
17
18
19
20
21

12
12
12
12
12
12
12

Part IV Complaint and Dispute Handling ProceduresInternal Complaint handling procedures
Referral to external dispute resolution processes
Data Collection
Staff Training

22
23
24
25

13
13
13
14
14

Part V Direct Selling Companies Requirements
Interaction
Delivery of Product to Direct Sellers
Enticement
Identification
Denigration
Guarantees and After Sales Service
Extraterritorial Coverage

26
27
28
29
30
31
32

15
15
15
15
15
15
15
15

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Direct Selling Association of New Zealand Code of PracticeIndex Continued
Part VI Recruitment and Company Relationships to Direct Sellers
Respect of Privacy
Code of Conduct Compliance
Relationship
Inventory Loading and RepurchaseEarnings and Accounts
Earnings Claims
Fees
Other Materials
Direct Seller Training
Part VII Code Enforcement
Code Administrator
Code Administrator Appointment and Term
Monitoring
Systemic or recurring contraventions
Complaint Handling
Company’s Responsibilities
Annual Report
Reviews of the Code
Amendment
Education
Direct Selling Association of New Zealand
Meetings of the DSANZ
Funding

Clause

Page

33
34
35
36
37
38
39
40
41

16
16
16
16
16
16
17
17
17
17

42
43
44
45
46
47
48
49
50
51
52
53
54

18
18
18
18
19
19
19
19
19
19
20
20
20
20

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Direct Selling Association of New Zealand Code of PracticePart 1. Introduction
1. Background, objectives and obligations
1.1 Definition of Direct Selling
The marketing of consumer products directly to consumers generally in their homes or thehomes of others, at their workplace and other places away from permanent retail locations,
usually through explanation or demonstration of the products by a Direct Seller.
1.2 The Association, recognising that companies engaged in direct selling assume special
responsibilities towards consumers arising out of the person-to-person method of distributing
product and services in locations other than fixed retail premises, hereby sets forth the Codeof Practice with which its member companies shall comply in the conduct of their businesses.
1.3 It is a condition of membership of the DSANZ that this Code is strictly observed.
1.4 Companies of the DSANZ pledge to adopt and enforce a code of conduct that incorporates atminimum provisions of this Code as a condition of admission and continuing membership in the
DSANZ. Companies also pledge to publicize this Code, its general terms as they apply toConsumers and Direct Sellers, and information about where Consumers and Direct Sellers may
obtain a copy of this Code.
1.5 This document incorporates all of the World Direct Selling Code of Conduct guidance principles
adopted in October 2017 covering the activities of companies and individuals engaged in Direct
Selling.
1.6 The Objectives of this Code are to achieve the following outcomes• Advertising and Promotion which is not misleading or deceptive• Sales conduct that respects the rights and privileges of the individual customer in theprivacy of his or her own home
• Product demonstrations that give full explanation and cease on request• Disclosure of the Direct Salespersons full identity and address details and why they areapproaching the consumer• Apply a minimum 10 days or 5 working days (whichever is the longer) cooling off period• Advise fully the terms of payment at the time the product is ordered• Provision of comprehensive complaints and disputes procedures• Mechanisms to ensure that the Code is administered ongoing and reviewed periodically.
1.7 Direct Sellers are not bound directly by this Code, but as a condition of membership in the
Company’s distribution system, shall be required to by the Company with whom they areaffiliated to adhere to rules of conduct of this Code.

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Direct Selling Association of New Zealand Code of Practice

1.8 Self – Regulation – This Code is not law, but its obligations require a level of ethical behaviour
from Companies and Direct Sellers which conforms with or exceeds applicable legal
requirements. Non-observance of this Code does not create any civil law responsibility or
liability. With termination of its membership in DSANZ, a Company is no longer bound by thisCode. However, the provisions of this Code remain applicable to events or transactions that
occurred during the time a Company was a member of DSANZ.
1.9 Local Regulations – Companies and Direct Sellers must comply with all requirements of law inany country in which they do business. Therefore, this Code does not restate all legal
obligations; compliance by Companies and Direct Sellers with laws that pertain to Direct Sellingis a condition of acceptance by or continuing membership of the DSANZ.
1.10 Extraterritorial Effect – Every national DSA pledges that it will require each member as acondition to admission and continuing membership in the DSA to comply with the WFDSA World
Code of Conduct for Direct Selling with regard to direct selling activities outside of its homecountry, unless those activities are under the jurisdiction of Codes of Conduct of anotherCountry’s WFDSA affiliated DSA to which the member also belongs.
Should a company be subject of a Code Complaint in a country in which it is not a member, thecompany must accept jurisdiction of the Code Administrator in its home country (or if thecompany is not a member in its home country, any country in which it is a DSA member), andshall bear reasonable costs incurred by the home country Code Administrator associated withresolution of the complaint. Moreover, the Code Administrator of the home country may
coordinate with the Code Administrator (if one exists) of the complainant’s country and, inevaluating the alleged Code complaint, apply, in order of priority,i.
the standards of the Code of Ethics in the country which the complaint is filed, orii. the standards of the Code of Ethics in the subject company’s home country, or,iii. at a minimum, the standards set forth in the WFDSA Code of Ethics.
2. Scope
a)

b)

c)

d)

The Code contains sections entitled “Conduct for the Protection of Consumers,” “Conduct
Between Companies and Direct Sellers” and “Conduct Between Companies.” These three
sections address the varying interactions across the spectrum of direct sales.
The Code is designed to assist in the satisfaction and protection of Consumers, promote faircompetition within the framework of free enterprise and enhance the public image of Direct
Selling
This Code covers all Direct Selling Association of New Zealand (DSANZ) members, their staff,
contractors, distributors, agents and salespersons, including full and associate members while
engaged in Direct Selling, for the sale of either products or services.
A member of the DSANZ may terminate their membership and their obligation to adhere to theCode by resigning formally from the DSANZ giving fourteen days notice. This however does notnegate the obligation by the member to fulfil obligations incurred while a member under the
code.

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Direct Selling Association of New Zealand Code of Practicee)Obligations to comply with the Code shall not cease until the last obligation to do anything
required by the Code has been performed.

3. Exemptions
The following sales or goods and services are exempt from the Code.
a)

Commercial sales of products or services bought exclusively for use in a commercial operation
for which recourse may be achieved under the Contract and Commercial Law Act 2017 or the
Fair Trading Act 1986.

b)

Sales of foodstuffs shall be exempt from the cooling off period where the use by date will have
expired within that period, and:i.
the product is delivered to the customer at the time of sale; andii. the customer’s attention is specifically drawn to the expiry before becoming committed
to the sale; andiii. the value is below $100 New Zealandc)

Non-DSANZ member’s sales.

4. Citation
This Code may be cited as the Direct Selling Code of Practice.

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Direct Selling Association of New Zealand Code of Practice

5. Interpretations and Glossary of Terminology

Direct Selling
DSA

The marketing of consumer products directly to consumers generally intheir homes or the homes of others, at their workplace and other places
away from permanent retail locations, usually through explanation ordemonstration of the products by a Direct Seller
Direct Selling Association being a national association of Direct Selling

DSANZ

Direct Selling Association of New Zealand Inc.

WFDSAWorld Federation of Direct Selling Associations

Company

Direct Seller

Product
Selling

Network Marketing/MLM

Party Selling

Order Form

Recruiting
Code
Code Administrator
MemberSalesperson
Inventory
Consumer

A Direct Selling company is a business entity that utilises(i) utilises a Direct Selling distribution system to market its Products and(ii) is a member of the DSANZA person or entity that is entitled to buy and/or sell the Products/Servicesof a Company and that may be entitled to recruit other Direct Sellers. Direct
Sellers predominately market consumer products directly to Consumers
away from a permanent, fixed retail location, usually through the
explanation or demonstration of products and services. A Direct Seller may
be an independent Commercial Agent, independent Contractor,
independent dealer or distributor, employed or self employed
representative, or any other similar sales representative of a Company
Tangible and intangible consumer goods and services
Selling includes contacting potential customers, presenting anddemonstrating products, taking of orders, delivery of goods and thecollection of payment.
Selling by products and services by more than one level of Direct Sellers withelements of the sale reward being given upward to the originator(s) of the
Direct Seller and not being a Pyramid Scheme as defined by the Fair Trading
Act 1986
Selling, through explanation and demonstration products to a group ofprospective customers by a direct seller usually in the home of a hostesswho invites other persons for this purpose.
A printed or written document confirming details of a Consumer order andproviding a sales receipt to the Consumer. In the case of Internet purchases,
a form containing all terms of the offer and purchase provided in a printable
or downloadable format.
Any activity conducted for the purpose of assisting a person to become adirect seller
This document in its entirety
An independent person appointed by the DSANZ to monitor a company’sobservance of the DSA’s Code and to resolve complaints under the CodeAs per Company but may also include an associate or supplier member.
As per Direct Seller description
Any products, sales materials, aids and kits required by Direct Sellers for the
purposes of their business.
Any person who purchases and consumes products or services from a Direct
Seller or a Company.

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Direct Selling Association of New Zealand Code of PracticePart II - CONDUCT FOR THE PROTECTION OF CONSUMERS
6. Conduct toward Consumers
a)
b)
c)
d)
e)
f)

g)

Direct sellers shall conduct their business in a manner respectful of the rights and privileges of
the individual in the privacy of his/her own home.
No Direct Seller shall use physical force, harassment or coercion in connection with the supply
or possible supply of goods or services or the payment for goods or services.
Direct sellers shall not use misleading, deceptive or unfair sales practices. Ref: Fair Trading Act
1986 Sections 9, 10, 11,12A, 13, 14, or 17 (Other sections may also apply in some circumstances)
Direct Sellers shall comply with sections 36K-36R of the Fair Trading Act 1986 when making
uninvited direct sales
A Direct Seller shall discontinue a demonstration, or sales presentation or telephone call
immediately upon the request of the Consumer.
Direct Sellers shall make personal or telephone contact with Consumers only in a reasonable
manner and during reasonable hours to avoid intrusiveness. Direct Sellers and Companies shalltake appropriate steps to ensure the protection of all private information provided by aConsumer, a potential Consumer, or a Direct Seller. Ref Part III of this CodeDirect Sellers shall not abuse the trust of individual consumers and shall respect the lack ofcommercial experience of consumers. Direct Sellers shall not abuse the trust of individual
consumers, to exploit a consumer’s age, disability, illness, lack of understanding, literacy or
unfamiliarity with a language.

7. Customer Contact
Identification
At the initiation of a sales presentation, Direct Sellers shall, without request, truthfully andclearly identify themselves; the identity of their Company; the nature of their Products; and the
purpose of their solicitation to the prospective Consumer.
b) On request Direct Sellers shall give their own contact address and/or the name, address andtelephone number and/or email address of the company represented.
a)Explanation and Demonstration
All direct sellers shall offer Consumers;a) Accurate and complete Product explanations and demonstration regarding price, and if
applicable, credit terms; terms of payment; quality; performance characteristics; quantity andavailability of their products or services.
b) To the extent claims are made with respect to product efficacy, Direct Sellers shall make only
those verbal or written product claims that are authorised by the Company.
c) Full details of the DSANZ or legal cooling off period, whichever is the longer, return rights andpolicy, term of guarantee, after sales service and delivery dates as provided in clauses, 10, 12
and 13 in this document.
d) Answer all questions with accurate and understandable answers to all questions from
Consumers.

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Direct Selling Association of New Zealand Code of PracticeMarketing Claims or Literature
All Companies or direct sellers representing member companies of the DSANZ shall not directly or
through literature:
a)
b)
c)
d)
e)
f)
g)

h)

Make false or misleading comparisons about price or quality
Quote scientific or technical data in support of a claim unless the data can be readily
substantiatedUse any testimonials or endorsement that is unauthorised, untrue, obsolete or otherwise
inapplicable, unrelated to the offer or used in any way to mislead the Consumer.
Promise outcomes where those outcomes have no safe scientific, medical or performance basis.
Overstate security or health risks associated with the use or non-use of any product
Describe goods or samples as “free” unless the goods or samples are supplied at no cost or no
extra cost to the consumer other than actual postage/carriage when specified.
Companies and Direct Sellers shall not use comparisons which are misleading. Points ofcomparison shall be based on facts which can be substantiated. Companies and Direct Sellers
shall not unfairly denigrate any Company, business or Product, directly or by implication.
Companies and Direct Sellers shall not take unfair advantage of the goodwill attached to thetrade name and symbol of another Company, business or Product.
Use photos or illustrations that are deceptive

Promotional literature shall contain the name and address or telephone number of the Company
and may include the telephone number of the Direct Seller.
8. Order Forms
A written Order Form shall be delivered of made available to the Consumer at or prior to the time of
the initial sale. In the case of a sale made via mail, telephone, the Internet, or similar non face to facemeans, a copy of the Order Form shall have been previously provided, or shall be included in theinitial order, or shall be provided in printable or downloadable form via the Internet.
For clarity, Direct Sellers undertaking an uninvited direct sale must provide to the consumer a copyof the agreement within 5 working days from which the agreement was entered into. Ref Section
36L Fair Trading Act 1986.
The Order Form shall:a) Clearly identify the company and the direct seller/salesperson.
b) Contain the full name, permanent address and telephone number of the direct seller
and/or the member company.

9Direct Selling Association of New Zealand Code of Practice

The Order form or accompanying literature provided with the product (except where the sale isgoverned by legislation such as the Fair Trading Act 1986 where this right must be expressed in termsof the prescribed method in the legislation.)
•
•
•
•
•
•
•
•
•
•
•

Show all material terms of the sale in a clearly legible form such as:
Total price including GST and delivery costs forming any part of the sale
Terms of sale
Delivery timing
Terms of guarantee or warrantee/Additional guarantees (Ref section 15)
Return rights (Company and/or DSANZ rights)
Cooling off period
Details and Limitations of after sales service
Remedial action available to the Consumer
Information on complaints and dispute handlingTerms of Payment

9. Inducements or Referral Selling
Companies and Direct Sellers shall not induce a person to purchase goods or services based upon
the representation that a Consumer can reduce or recover the purchase price by referring
prospective customers to the Direct Sellers for similar purchases, if such reductions or recovery arecontingent upon some uncertain future event. Also Ref: Section 20 Fair Trading Act 1986
10. Pyramid Sales
No Direct Seller or member company of the DSANZ shall promote, operate or be involved in any kindof ‘pyramid selling scheme’.
A ‘pyramid selling scheme’ being defined as;a) That which provides for the supply of goods or services or both for reward; andb) That, to many participants in the scheme, constitutes primarily an opportunity to sell an
investment opportunity rather than an opportunity to supply goods or services andc) That is or is likely to be unfair to many of the participants in the scheme in that:• The financial rewards of many of those participants are dependent on the recruitmentof additional participants (whether or not at successively lower levels) and• The number of additional participants in the scheme that must be recruited to
produce reasonable financial rewards to participants in the scheme is not attainable
or is not likely to be attainable by many of the participants in the scheme:
Also Ref: Section 24 Fair Trading Act 1986

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Direct Selling Association of New Zealand Code of Practice

11. Delivery
Direct Sellers will deliver the customer’s order in a timely fashion and will advise the customer
accurately of normal delivery times prior to the order being placed.
If the delivery cannot be achieved in a timely fashion, the customer will be offered the opportunity
to cancel the order.
12. Right of Cancellation, Cooling-off and Return of Goods
a)

b)

c)
d)

Companies and Direct Sellers shall offer Consumers a minimum ‘cooling off’ period of 10 daysor 5 working days (whichever is the longer) during which they may cancel an order irrespectiveof whether a deposit or payment in full has been paid or delivery of goods has taken place,provided that subject to fair wear and tear any goods are returned in the same condition as
when delivered. This period shall apply from the date of delivery of the goods or from after thedate on which the consumer receives a copy of the direct selling agreement, whichever is thelater. The ‘cooling-off’ period shall be clearly stated and shall apply equally to direct sales anddistance sales (i.e. telephone, mail or online orders).
Any deposit and/or initial payment paid prior to delivery shall be refundable upon thecancellation of the order or, in the case of credit transactions, in accordance with any statutory
requirements.
Companies and direct sellers offering an unconditional right of return shall provide it in writing.
When direct sales are made on credit, direct sellers shall comply with legal obligations under
the Credit Contracts and Consumer Finance Act 2003. This include meeting all lender
responsibilities and supporting the lender to comply with these.

13. Cost of Returned Goods
a)b)

Goods returned under clause 12 are to be uplifted by the direct seller for return to the member
company at the direct sellers cost. However should the customer return the goods directly tothe company at their own cost the company may reimburse this cost at their discretion.
Where free-post or similar arrangements are offered by members this will be included in thesales documentation.

14. Substitute Goods or Servicesa)b)

When direct sellers cannot supply exactly the same goods or service as specified by a consumer
then they may supply substitute goods or services of similar kind, quality and price subject tothe consumer’s acceptance under the Guarantee provisions of the member company.
In all such situations the consumer shall have the right of refund in full at their discretion.

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Direct Selling Association of New Zealand Code of Practice

15. Consumer Guarantees and After Sales Service
a)

b)
c)

Every member company of the DSANZ shall have a written guarantee relating to all its products
or services. Such guarantees shall be directed towards consumer satisfaction and shall clearly
set out the guarantee term and the remedial action available to consumers.
Information provided with member company’s products or services shall include full
instructions for proper use and adequate warnings relating to safety whenever necessary
All products will comply with all relevant information and labelling requirements and otherStandards requirements under New Zealand law.

12

Direct Selling Association of New Zealand Code of PracticePart III - Privacy and Information Protection
16. Limited Definition of Consumer
In this Part, ‘consumer’ refers only to an individual.
17. Collection and Use of Personal Informationa)At or before the time personal information is collected from a consumer, the member company
or their representative must disclose the primary purpose for collecting the personal
information if that purpose is not obvious.

An example of primary purpose would be the fulfilment of customer orders.
b)

c)
d)

Member companies or their representatives will disclose any other secondary purpose incollecting the information and where necessary obtain written approval by the consumer foruse of the information outside of the primary purpose of collection.
Contact details capture will conform to the Unsolicited Electronic Messages Act 2007 whereappropriate
Use of email, texting or any other form of electronic communication to consumers shall comply
with the Unsolicited Electronic Messages Act 2007 with the prescribed opt out being offered to
the Consumer.

18. Access to Information and Right of Correction
a)
b)
c)

Consumers may request a member company provide details of all of his or her personal
information that is held by the company.
Where the consumer’s information is held exclusively by the company’s independent
contractors, the company will direct such requests to the independent contractors.
All requests for details shall be actioned within 5 working days.

19. Maintenance of Lists
On notification by the consumer, member companies and their representatives will:a. Amend incorrect records to the correct records as stated by the consumer;
b. Remove or mark the consumer’s record for no further contact if requested;
20. Use of Lists
Member companies or their direct sellers will not use, sell or pass on the information gathered forany purpose other than normal Direct Selling Activities as undertaken by and for the respective
company for which that information list was compiled.

13Direct Selling Association of New Zealand Code of Practice

21. Information Collected on Direct Sellers
Information gathered by the Company on representatives, distributors, agents and salespeople as
independent contractors shall be treated as information held on sole traders and businesses and not
subject to the Privacy Act 1993 in accordance with exceptions granted in that Act.
All information gathered on representatives, distributors, agents and salespeople as independent
contractors shall be only used for member company’s normal direct selling activities.

14

Direct Selling Association of New Zealand Code of PracticePart IV - Complaint and Dispute Handling Procedures
22. Internal Complaint Handling Procedures
a)
b)

c)

d)
e)
f)

Any consumer complaint directed against a member company of the DSANZ shall be dealt withpromptly, fully, and fairly by that company with the objective of ensuring consumer satisfaction.
Each member company shall have in place procedures for dealing with complaints fromconsumers with a designated complaints person (s) having a full understanding of the complainthandling procedure.
Each member company shall produce information material in plain language explaining:• how a customer can gain access to the procedure• how the procedure works• the timeframes within which the procedure will be carried out• the customer’s right to access the Code Administrator or the legal system if dissatisfied
with the Company’s decision or the way it has been reached
Each member company shall provide for resolution of complaints in a timely fashion.
The procedures required under clause 35.b shall be available to all consumers whose custom
has been solicited by direct selling either directly from the company or its representatives.
If in the event that the complaint is not resolved to the customer’s satisfaction, the member
company will inform the customer of their right to have their complaint referred to the external
dispute resolution process or to have their complaint resolved in the Disputes Tribunal.

23. Referral to External Dispute Resolution Processes
Any consumer complaint directed against a member company of the DSANZ shall be dealt withpromptly, fully, and fairly by that company with the objective of ensuring consumer satisfaction.
In the event that the complaint is not remedied to the satisfaction of the consumer by the member
company, recourse is available through the Code Administrator, at no cost to the consumer or direct
seller, whichever is applicable, using the following procedure.
a)b)

The DSANZ will acknowledge all complaints within 5 working days of receipt and pass thecomplaint to the company for action within 2 working days of receipt.
Where the complaint is not resolved within 7 working days by the member company, then the
DSANZ in consultation with the consumer shall refer the complaint to the Code Administrator
unless resolution is deemed likely within a further 7 working days.

The complaint will referred to the Code Administrator after this point unless specifically requestedby the consumer not to proceed.
c)Where complaints are to be heard by the Code Administrator all relevant material is to besupplied by the DSANZ to the Code Administrator within 5 working days of notification of thecomplaints failure to be resolved and in accordance with clause 37.b

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Direct Selling Association of New Zealand Code of Practiced)

The Code Administrator shall make appropriate decisions as quickly as possible while giving fullconsideration to the complaint and the company’s submission.

Information on how to make a complaint shall be contained in a Code brochure to be held at the
Direct Selling Association of New Zealand and circulated to all Citizens Advice Bureaux and relevant
Consumer Agencies.
A full copy of the Code shall be published at the Association’s Internet Web site and a full copy madeavailable on request to the Association.
There shall be no cost to the consumer in any complaint lodged under the Code of Practicecomplaints procedure.
24. Data Collection
All parties to the Code shall maintain appropriate data collection procedures and shall report to the
DSANZ annually on the number, type and outcome of consumer complaints relating to the Codemade to them.
The DSANZ will be responsible for requesting this information at the time other statisticalinformation is gathered.
The DSANZ shall annually write a report on the number, type and outcome of consumer complaints
relating to the Code made to them and make this information publicly available.
25. Staff Training
All parties to the Code shall ensure that their staff, representatives, agents, salespeople orindependent contractors are aware of the Code and their obligations under it.

16

Direct Selling Association of New Zealand Code of PracticePart V - Direct Selling Companies Requirements (Conduct between Companies)
26. Interaction
Member companies of the DSANZ shall conduct their activities in the spirit of fair competition
towards other members
27. Delivery of Product to Direct Sellers
Member companies shall deliver products with all reasonable speed and with the exception of Force
Majorie, advise of any delays in the normal delivery period.
28. Enticement
Member Companies and Direct Sellers shall not systematically entice or solicit any Direct Sellers ofanother Company
29. Identification
In approach to consumers, member companies shall, so far as is practicable, identify themselves as
members of the Association.
Member company’s shall ensure that any printed matter issued by a member company of the DSANZ
to consumers shall contain its full name and geographical address of its head office or branch office,or other identification, enabling consumers to contact the company readily.
30. Denigration
Companies shall not unfairly denigrate nor allow their Direct Sellers to unfairly denigrate another
Company’s Products, its sales and marketing plan or any other feature of another Company.
31. Guarantees and After Sales Servicea)Every member company of the DSANZ shall have a written guarantee relating to all its products
or services. Such guarantees shall be directed towards consumer satisfaction and shall clearly
set out the guarantee term and the remedial action available to consumers.

b)

Information provided with member company’s products or services shall include full
instructions for proper use and adequate warnings relating to safety whenever appropriate.

c)

All products will comply with all relevant information and labelling requirements and otherStandards required under New Zealand law.

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Direct Selling Association of New Zealand Code of Practice

32. Extraterritorial Coverage
Each member agrees as a condition to admission and continuing membership in the DSA will comply
with the WFDSA World Code of Ethics for Direct Selling with regard to direct selling activities outsideof New Zealand.
This applies unless those activities are under the jurisdiction of Codes of Conduct of anothercountry's DSA to which the member also belongs.
The provisions set out under 1.10 of this code shall apply.

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Direct Selling Association of New Zealand Code of PracticePart VI Recruitment and Company Relationships to Direct Sellers
33. Respect of Privacy
Companies and Direct Sellers shall contact Direct Sellers only in a reasonable manner and during
reasonable hours to avoid intrusiveness. Direct Sellers and Companies shall take appropriate steps
to ensure the protection of all private information provided by a Consumer, a potential Consumer,
or a Direct Seller, in accordance with the Privacy Act as it applies to privacy and data protection.
34. Code of Conduct Compliance
Member companies of the DSANZ shall require their direct sellers as a condition of membership in
the company’s distribution system, to comply with the standards of this Code.
35. Relationship
Member companies shall provide to their direct sellers either a written agreement to be signed byboth the Company and the Direct Seller or a downloadable electronic statement containing all
essential details of the relationship between the direct seller and the company. Companies shallinform their direct sellers of their legal obligations under New Zealand law including tax obligation,
relevant consumer protection, privacy and use of information legislation.
36. Inventory Loading and Repurchase
Companies shall not require or encourage Direct Sellers to purchase Product inventory inunreasonably large amounts. Companies shall take clear and reasonable steps to ensure that Direct
Sellers who are receiving compensation for downline sales volume are either consuming or reselling
the Products they purchase in order to qualify to receive compensation.
If requested upon cessation of a Direct Seller’s relationship with a Company, Companies shall buy
back any unsold, re-saleable Product inventory, promotional material, sales aids and kits, purchased
within the previous twelve months and refund the Direct Seller’s original cost, less a handling charge
to the Direct Seller of up to 10% of the net purchase price. The Company may also deduct the costof any benefit received by the Direct Seller based on the original purchase of the returned goods.
This inventory repurchase policy must be clearly communicated to Direct Sellers.
It shall be considered an unfair and deceptive recruiting practice for a company or salesperson torequire or encourage an independent salesperson to purchase unreasonable amounts of inventoryor sales aids.
The Code Administrator may employ any appropriate remedy to ensure any individual salesperson
shall not incur significant financial loss as a result of such prohibited behaviour.

19Direct Selling Association of New Zealand Code of Practice

The Code Administrator, upon finding a member company has engaged in false, misleading or
deceptive recruiting practices, may employ any appropriate remedy to ensure any complainant shallnot incur significant financial loss as a result of such prohibited behaviour, including but not limited
to requiring such member company to repurchase any and all inventory, promotional materials,
sales aids and/or kits which a complainant has purchased.
37. Earnings and Accounts
Companies shall provide direct sellers with periodic accounts concerning, as applicable, sales,purchases, details of earnings, commissions, bonuses, discounts, deliveries, cancellations and otherrelevant data in accordance with the company’s arrangements with the direct seller.
All monies due shall be paid and any withholdings made in a commercially reasonable manner.
Earnings paid to Direct Sellers shall be derived from sales of products or services to consumers.
Earnings of Direct Sellers may be based on the sales and personal consumption by the Direct Sellers
and their downlines.
Direct Sellers shall not receive earnings for recruiting other Direct Sellers into a sales system; exceptthat companies may provide Direct Sellers with minimal incentives which are in accordance withNew Zealand law.
38. Earnings Claims
1)Companies and Direct Sellers shall not misrepresent the actual or potential sales or earnings oftheir Direct Sellers.

2)

Earnings representations and sales figures must be:a) truthful, accurate, and presented in a manner that is not false, deceptive or misleading,andb) based upon documented and substantiated facts in the relevant market.

3)

Potential direct sellers musta) be informed that actual earnings and sales will vary from person to person and will
depend upon the skills of the seller, the time and effort put in and other factors and;b) be provided with sufficient information to enable a reasonable evaluation of theopportunity to earn income.

39. Fees
Companies and Direct Sellers shall not require Direct Sellers or prospective Direct Sellers to pay morethan reasonable fees (according to local market) for any of the following: entrance fees, training
fees, franchise fees, fees for promotional materials or other fees related solely to the right to becomeor remain a participant in the company’s distribution system.

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Direct Selling Association of New Zealand Code of Practice

Any fees charged to become a Direct Seller shall relate directly to the value of materials, products orservices provided in return.
No company shall require product purchases as part of the application process unless included in
the starter kit. However, where not prohibited by law, mandatory purchase of a starter kit ispermitted.
Any required fees charged to become or remain a Direct Seller including any required additional
service offered by the company ( e.g. on-line training , e-commerce or other internet solutions,shipment costs ) shall be fully refundable (less any commission earned by the Direct Seller ) in theevent the Direct Seller terminates his/her distributorship within 30 days of payment.
The refundable fees are limited to those paid by the Direct Seller in the 30 days prior to the
distributor termination.”
Any commissions paid on fees charged to become or stay a Direct Seller, which are, in effect,
remuneration for recruiting Direct Sellers into a sales system, shall be prohibited.
40. Other Materials
Companies shall prohibit Direct Sellers from marketing to other Direct Sellers any materials that are
not approved by the Company and that are inconsistent with Company policies and procedures
Further Direct Sellers who sell company approved legally allowed promotional or training literature,whether in hard copy, electronic or any other form, shall;
a)
b)
c)
d)

e)

Offer only materials that comply with the same standards to which the Company adheres
Refrain from making the purchase of such sales aids a requirement of other Direct Sellers
Provide sales aids at a reasonable and fair cost, without any significant profit to the direct
seller, equivalent to similar material available generally in the marketplace andOffer a written return policy that is no less favourable to the Direct Seller than the return
policy of the Company the Direct Seller represents. Companies shall take diligent,reasonable steps to ensure that sales aids and similar materials produced by Direct Sellers
comply with the provisions of this Code and are not misleading or deceptive.
Compensation received by Direct Sellers for sales of training and promotional materials
to become or stay a Direct Seller which is, in effect, remuneration for recruiting Direct
Sellers into a sales system, shall be prohibited.

41. Direct Seller Training
Companies shall provide adequate training to enable Direct Sellers to operate ethically.

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Direct Selling Association of New Zealand Code of PracticePart VII Code Enforcement
42. Code Administratora) The Code will be administrated by a Code Administrator appointed from within New Zealand.
b) The Code Administrator is an independent person of recognised integrity appointed to determine
whether a contravention of the Code has occurred and has the power to direct the member company
to remedy any complaint and if applicable apply suitable actions and sanctions.
c) The Code Administrator will ensure that in no circumstances will this Code provide for lower
standards than set in legislation.
d) All costs associated with the Code Administrator shall be borne by the DSANZe) The functions of the Code Administrator include:
•
•
•
•
•
•

monitoring and reporting on the Code’s operation;
investigating systematic and recurring problems
undertaking full investigation of any complaint referred by the DSANZ
directing a binding resolution to complaints heard
directing suitable action or sanctions for contraventions of the CodeEnsure the prompt resolution of all complaintsf) Remedies – The Code Administrator may require the cancellation of orders, return of Products,
purchased, refund of payments or other appropriate actions, including warnings to Direct
Sellers or Companies, cancellation or Termination of Direct Sellers’ contracts or otherrelationships with the Company, and warnings to Companies
43. Code Administrator Appointment and Terma) The appointment of the Code Administrator shall be made by a two thirds majority of the DSANZBoard for a term not exceeding three years.
b) At the expiration of a three year term a Code Administrator may be appointed for a further threeyear term.
c) By the same majority as clause 44.b, the DSANZ Board Members may reduce the term or rescind
the appointment.
d) The Code Administrator shall not be appointed from within the Direct Selling industry but shallbe a person of recognised integrity, with good knowledge of legislation, normal commercial
practice and a general understanding of direct selling.

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Direct Selling Association of New Zealand Code of Practicee) On the resignation or death of a Code Administrator, the President of the DSANZ will assume theinterim role of Code Administrator until a permanent replacement is appointed.
f) The DSANZ Board shall endeavour to appoint a suitable permanent replacement within 30 daysof the resignations effect, death or termination of a Code Administrator.
44. Monitoringa) The DSANZ shall monitor compliance with the Code and shall advise the Board of potential
breaches or non-compliance.
b) The DSANZ Board may refer any agreed breaches to the Code Administrator or in minor cases
direct compliance by the member to remove the breach.
c) The DSANZ shall maintain and facilitate the operation of the independent dispute resolution
mechanisms that handle complaints under this code.
45. Systemic or Recurring Contravention'sa) The Code Administrator may investigate complaints indicating systemic or recurring
contravention’s of the Code. After such an investigation, the Code Administrator’s directions areto be forwarded to the Board of the DSANZ for action.
b) The Board may take such actions deemed necessary as prescribed in the Association’sConstitution, and may make recommendations to government for further action to eliminate orminimise the problem.
46. Complaint Handling
The DSA and Code Administrator shall establish, publicize and implement complaint handlingprocedures to ensure prompt resolution of all complaints. Companies shall also establish, publicize
and implement complaint handling procedures under their individual complaint handling processes
to ensure prompt resolution of all complaints.
47. Company’s Responsibilities
The primary responsibility for compliance of the Company and its Direct Sellers with the Code shallrest with each Company. In case of any breach of this Code, Companies shall make every reasonable
effort to satisfy the complainant.

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Direct Selling Association of New Zealand Code of Practice

48. Annual Report
The DSANZ shall publish an annual report on the operation of the Code and present it to its Annual
General Meeting and make copies of this report available publicly. The report shall include:
•
•
•
•
•
•

performance of the Code against developed performance indicators
the number, nature, and outcomes of complaints made under external dispute proceduresa summary of the number, nature and outcomes of complaints as reported by parties to theCodedetails of any investigation undertaken Systemic or Recurring Contraventions, and the resultsof such investigation
the names of all parties to the Codeany other general issues the DSANZ wishes to comment on

49. Reviews of the Codea)

The Code will be reviewed at periodic intervals which may be initiated by reviews of the World
Code of Ethics, request by government, consumer organisations or by a majority of the DSANZBoard of Executivesb)

Reviews will be conducted by the DSANZ in consultation with relevant government, industry
and consumer organisations.

50. Amendment
The Code can be amended at any time by the DSANZ Board with the Approval of the DSANZ at a
general meeting and after consultation with relevant government, industry and consumer
organisations.
51. Educationa)

The DSANZ shall undertake appropriate activities to ensure that consumers and industry areaware of the Code and understand its obligations.

b)

The DSANZ shall undertake appropriate activities to ensure members comply with the Code andshall make the Code available to non-members on request.

c)

The DSANZ shall undertake active promotion to non-members to join the DSANZ and adopt the
Code.

d)

All Companies are required to publicize the DSANZ’s Code of Ethics to their Direct Sellers andConsumers

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Direct Selling Association of New Zealand Code of Practice

52. The Direct Selling Association of New Zealand
The Direct Selling Association of New Zealand Incorporated (DSANZ) is an incorporated society interms of the Incorporated Societies Act 1908 and was incorporated on 18 May 1987 in Wellington
New Zealand.
A copy of the DSANZ Constitution is available on request from the DSANZ or through the Registrarof Incorporated Societies Wellington.
The annual accounts of the DSANZ are filed annually in accordance with the Incorporated Societies
Act 1908 and may be viewed at the Registrar of Incorporated Societies in Wellington.
The DSANZ is located at;Level 3, 145 Khyber Pass Road,
Grafton, Auckland 1023
Telephone: (09) 3670913
Facsimile: (09) 3670914
Email: dsanz@dsanz.co.nz
Website: http://www.dsanz.co.nz

Correspondence should be addressed to;
The Executive Director
Direct Selling Association of New Zealand
Private Bag 92066, Victoria Street West
Auckland 1142

The DSANZ Board comprises of:• President• Vice President• Immediate Past President• Up to 8 Executive Committee Members
The Board is appointed annually at an Annual General Meeting of the DSANZ.
53. Meetings
The DSANZ shall determine appropriate requirements for meetings and inclusion of Code of Practiceissues.
54. Funding
The DSANZ shall determine appropriate funding arrangements for the operation of the Code and theCode Administrator.
No consumer shall be required to meet any cost associated with the Code administration.

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