Welcome to ADSEI - Association of Direct Selling Entities of India
ADSEI
Association of Direct Selling Entities of India
Direct selling Entity, and in particular ADSEI Direct selling Entity members' actions change the world . The ASSOCIATION OF DIRECT SELLING ENTITIES OF INDIA (“ADSEI”),
recognizing that Direct selling entities engaged in direct selling Business assume certain responsibilities towards Government, Consumer, Public, Direct sellers and other Direct selling Entities arising out of the Network of Direct Selling method of distribution of their products and services, hereby sets forth the basic fair and ethical principles and practices to which member entities will continue to adhere to in the conduct of their business as well as maintain the Decorum in the ASSOCIATION OF DIRECT SELLING ENTITIES OF INDIA
(“ADSEI”). Such Code of Conduct and Ethics for Direct Selling Agents (DSAs) is a non-statutory code issued by ASSOCIATION OF DIRECT SELLING ENTITIES OF INDIA
(ADSEI) for adoption and implementation by Direct selling entities while acting as a Member of ADSEI.
ASSOCIATION OF DIRECT SELLING ENTITIES OF INDIA
(ADSEI) is expected to adopt the standards of dignity, fairness and integrity. The purpose of this Code of Conduct and Ethics is to strengthen confidence in the integrity and professional standards of association executives. Abiding by this Code is essential for membership of the ADSEI.
“Consumer”
Consumer shall have the same meaning as provided under the Consumer Protection Act, 2019
“Cross line”
“Cross line” refer to Crossline sponsoring usually indicates the violator is crossing lines of sponsorship to steal another Direct seller's recruit. However, it can also mean they're soliciting someone who wasn't recruited directly by them but is somewhere in the depth of their own downline and sponsored by a downline member.
“Prospect”
Prospect means a person to whom an offer or a proposal is made by the Direct Seller to join a Direct Selling opportunity.
"Act"
means the Consumer Protection Act, 1986/ 2019
“Direct Seller”
Direct Seller means a person appointed or authorized, directly or indirectly, by a Direct Selling Entity through a legally enforceable written contract to undertake direct selling business on principal to principal basis.
“Network of Direct Selling”
Network of Direct Selling means a network of direct sellers at different levels of distribution, who may recruit or introduce or sponsor further levels of direct sellers, who they then support:
Explanation: “network of direct selling” shall mean any system of distribution or marketing adopted by a direct selling entity to undertake direct selling business and shall include the multi- level marketing method of distribution.
“Direct Selling”
Direct Selling means marketing, distribution and sale of goods or providing of services as a part of network of Direct Selling other than under a pyramid scheme,
Provided that such sale of goods or services occurs otherwise than through a “permanent retail location” to the consumers, generally in their houses or at their workplace or through explanation and demonstration of such goods and services at a particular place
“Direct Selling Entity”
Direct Selling Entity means an entity, not being engaged in a pyramid scheme, which sells or offers to sell goods or services through a direct seller.
“Goods”
Goods means goods as defined in the Sale of Goods Act, 1930 and “Service” means service as defined in the Consumer Protection Act, 1986;
“Saleable”
Saleable shall mean, with respect to goods and / or services, unused and marketable, which has not expired, and which is not seasonal, discontinued or special promotion goods and / or services;
“Cooling-off Period”
Cooling-off Period means the duration of time counted from the date when the direct seller and the direct selling entity enter into an agreement and ending with date on which the contract is to be performed and within which the direct seller may repudiate the agreement without being subject to penalty for breach of contract;
“Pyramid Scheme”
Pyramid Scheme means A multi layered network of subscribers to a scheme formed by subscribers enrolling one or more subscribers in order to receive any benefit, directly or indirectly, as a result of enrolment, action or performance of additional subscribers to the scheme. The subscribers enrolling further subscriber(s) occupy higher position and the enrolled subscriber(s) lower position, thus, with successive enrolments, they form multi-layered network of subscribers.
Provided that the above definition of a “Pyramid Scheme” shall not apply to a multi layered network of subscribers to a scheme formed by a Direct Selling Entity, which consists of subscribers enrolling one or more subscribers in order to receive any benefit, directly or indirectly, where the benefit is as a result of sale of goods or services by subscribers and the scheme/financial arrangement complies with all of the following:
Explanation 1 –
For the purposes of this proviso the term “material terms” shall means buy-back or repurchase policy, cooling-off period, warranty and refund policy.
“Money Circulation Scheme”
Money Circulation Scheme has the same meaning as defined under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
“Remuneration System”
Remuneration System means the system followed by the direct selling entity to compensate the direct seller which illustrates the mode of sharing of incentives, profits and commission, including financial and non-financial benefits, paid by the direct selling entity to the direct sellers, on a monthly or periodic or yearly basis or both, as the case may be. This system, for every Direct Selling entity, shall:
1. Uphold, promote, and respect the principles of the Code-
The future of Direct selling depends on both technical and ethical excellence. ADSEI members should adhere to the principles of the Code and contribute to improving them. ADSEI members who recognize breaches of the Code should take actions to resolve the ethical issues they recognize, including, when reasonable, expressing their
concern to the person or persons thought to be violating the Code.
2. Treat violations of the Code as inconsistent with membership in ADSEI- Each ADSEI member should encourage and support adherence by all Direct selling entities regardless of ADSEI membership. ADSEI members who recognize a breach of the Code should consider reporting the violation to the ADSEI Executive chairman, which may result in remedial action as specified in the ADSEI Bylaw Severance and Reinstatement of Membership. The remedial measures may include, but are not limited to, member censure, suspension or expulsion.
The Executive chairman may issue periodic reports on Code of
Ethics compliance including disclosure of numbers and types of complaints as well as entity-compliance efforts. The issuance of these reports will not identify individual complaints.
1. The Board of Directors of the ADSEI shall appoint an
Executive chairman (“Executive chairman”) to serve for a
fixed term to be set by the Board prior to appointment.
2. The Board shall have the authority to discharge the Executive chairman for cause only. The Board shall provide sufficient authority to enable the Executive chairman to properly discharge the responsibilities entrusted to the Executive chairman under this Code.
3. The Executive chairman will be responsible directly and solely to the Board.
4. The Executive chairman shall be a person of recognized integrity, knowledgeable about the industry, and of a stature that will command respect by the industry and from the public.
5. The Executive chairman shall appoint a staff adequate and competent to assist in the discharge of the Executive chairman’s duties.
6. During the term of office, neither the Executive chairman nor any member of the staff shall be an officer, director, employee, or substantial stockholder in any member of the
ADSEI .
7. The Executive chairman shall disclose all holdings of stock in any member entity prior to appointment and shall also disclose any subsequent purchases of such stock to the Board of Directors.
8. The Executive chairman shall have the same rights of indemnification as the Directors and Officers have under the bylaws of the ADSEI .
9. The Executive chairman shall establish, publish and implement transparent complaint handling procedures to ensure prompt resolution of all complaints.
10. The Executive chairman shall review and determine all charges against member entities, affording those entities an opportunity to be heard fully.
11. The Executive chairman shall have the power to originate any proceedings and shall at all times have the full cooperation of all member entities.
12. The Executive chairman shall have the sole authority to determine whether a violation of the Code has occurred. The Executive chairman shall answer as promptly as possible all queries relating to the Code and
its application, and, when appropriate, may suggest, for consideration by the Board of Directors, Code amendments, or other implementation procedures to make the Code more effective.
13. If, in the judgment of the Executive chairman, a complaint is beyond the Executive chairman’s scope of expertise or resources, the Executive chairman may decline to exercise jurisdiction over the complaint and may recommend to the complainant another forum in which the complaint can be addressed.
14. The Executive chairman shall undertake to maintain and improve all relations with better business bureaus and other organizations, both private and public, with a view toward improving the industry’s relations with the public and receiving information from such organizations relating
to the industry’s sales activities.
15. That all the decision of the Executive chairman shall be under supervision of the Board of THE Directors of the ADSEI and BOARD OF ADSEI shall have the power to change the order or decision at own desecration or
through received complaint/request.
1. Receiving the Complaint-
Upon receipt of a bona fide complaint from a bona fide consumer/Direct seller member
Entity/ Government/General public, the Executive chairman shall forward a copy of the complaint, to the accused member entity together with a letter notifying the entity that a preliminary investigation of a specified possible violation is being conducted and requesting the member entity’s cooperation in supplying necessary information and documentation.
If the Executive chairman has reason to believe that a member entity has violated the Code, even if a written complaint has not been received, then the Executive chairman shall provide written notice to the member entity stating the basis for the Executive chairman’s belief that a violation has occurred.
The Executive chairman shall honour request by complainants for confidential treatment of their identity. The subject matter of a complaint will not be kept confidential.
2. Cooperation with the Executive chairman
In the event a member entity refuses to cooperate with the
Executive chairman and/or refuses to supply necessary information and documentation, the Executive chairman shall serve upon the member entity, by certified mail, a notice affording the member entity an opportunity to request Board of the Directors’ Appeal panel of ADSEI to evaluate whether its membership in the ADSEI should not be terminated. In the event the member entity fails to request a review by an Appeals Review Panel, the ADSEI Board of Directors may vote to suspend or terminate the membership of the member entity.
3. Investigation and Disposition Procedure
a. The Executive chairman 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 Executive chairman determines, after the informal investigation, that there is no need for further action or that the Code violation allegation lacks merit, the investigation and administrative action shall terminate and the complaining party shall be so notified.
b. The Executive chairman may, at his discretion, remedy an
alleged Code violation through informal, oral and written communication with the accused member entity.
c. If the Executive chairman determines that there are violations of such a nature, scope or frequency that the best interests of consumers, the ADSEI require remedial action, the member entity shall be notified. The reasoning and facts that resulted in the decision as well as the nature of the remedy shall be included in the Executive chairman’s notice. The notice shall also offer the member entity an opportunity to consent to the suggested without the necessity of an appeal.
If the member entity desires to dispose of the matter in this manner, it will within 20 calendar days advise the Executive chairman, in writing. The letter to the Executive chairman may state that the member entity’s willingness to consent does not constitute an admission or belief that the Code has been violated.
4. Appeals Review Panel
If a member entity has submitted a request for review pursuant
to or an appeal of the Executive chairman’s remedial action pursuant to an Appeals Review Panel consisting of three representatives from active member entities shall be selected by the ADSEI Board of Directors within 20 calendar days.
The three member entities shall be selected in a manner that represents a cross section of the industry. When possible, none of the three shall sell a product that specifically competes with the member entity that is seeking the Appeals Review Panel (hereinafter “the Appellant”), and every effort shall be made to avoid conflicts in selecting the Panel. If for any reason, a member of the Panel cannot fulfill his or her duties, the Chairman of the Board of ADSEI can replace that person with a new appointment.
The representatives serving on the Appeals Review Panel shall during their time on the Panel have the same rights of indemnification the Directors and Officers have under the bylaws of the ADSEI .
5. Appeals Review Procedure
a. An appellant who want to appeal against the order of the
Executive chairman than he may file an appeal in format
of the application with copy of the Executive chairman’s order before the Appeals Review Panel in writing within 20
calendar days of the date of the Executive chairman’s
order.
b. Within 10 calendar days of receiving such a request, Appeals Review Panel shall inform by written notice to the Executive chairman to submit all the written submission with proof against such appeal.
c. Within 15 calendar days of that such notice, the Executive chairman shall send a copy of the Complaint and all relevant documents, including an explanation of the basis of the decision to impose remedial action, to the panelists with copies to the Appellant.
d. Upon receipt of such information, the Appellant shall have
15 calendar days to file with the Panel its reasons for arguing that remedial action should not be imposed along with any additional documents that are relevant.
e. Once the information has been received by the panelists from both the Executive chairman and the Appellant, the Panel will complete its review within 30 calendar days or as soon thereafter as practicable. If the review pertains to whether the Appellant’s membership in the ADSEI should be terminated, the Panel shall decide whether the member
entity’s failure to work with the Executive chairman justifies suspending or terminating the Appellant’s membership in the ADSEI .
f. If the review pertains to the Executive chairman’s suggested remedial action, the Panel shall decide whether the Executive chairman’s decision to impose remedial action was reasonable under all of the facts and circumstances involved and shall either confirm the Executive chairman’s decision, overrule it, or impose a lesser sanction.
g. The Panel shall be free to contact the Executive chairman, the Appellant, and any other persons who may be relevant, in writing as deemed appropriate. A decision by the Panel shall be final and shall be promptly communicated both to the Executive chairman and the Appellant.
h. The costs involved in the appeal such as costs of photocopying, telephone, fax, and mailing, shall be borne by the Appellant.
1. Conferring with Others
At no time during an investigation or the hearing of charges
against a member entity shall the Executive chairman or member of an Appeals Review Panel confer with anyone concerning the alleged violation(s) of the Code, except as provided herein and as may be necessary to conduct the investigation and hold a hearing. At no time during the investigation or the Appeals Review Panel process shall the Executive chairman or a member of the Appeals Review Panel confer with a competitor of the member entity alleged to be in violation of the Code, except when it may be necessary to call a competitor concerning the facts, in which case the competitor shall be contacted only for the purpose of discussing the facts. At no time shall a competitor participate in the Executive chairman’s or in an Appeals Review Panel’s disposition of a matter.
2. Documents
Upon request by the Executive chairman to any member entity,
all documents directly relating to an alleged violation shall be delivered to the Executive chairman. Any information that is
identified as proprietary by the producing party shall be held in confidence. Whenever the Executive chairman, either by his own determination or pursuant to a decision by an Appeals Review Panel, closes an investigation, all documents shall either be destroyed or returned, as may be deemed appropriate by the Executive chairman, except to the extent necessary for defending a legal challenge to the Executive chairman’s or Appeals Review Panel’s handling of a matter, or for submitting relevant data concerning a complaint to a local, state or federal agency. At no time during proceedings under this Code shall the Executive chairman or a member of an Appeals Review Panel either unilaterally or through the ADSEI issue a press release concerning allegations or findings of a violation of the Code unless specifically authorized to do so by the Executive Committee of ADSEI ’s Board of Directors.
1. At any time the Direct selling member entity may file
request before the ADSEI Board to resign the membership from ADSEI.
2. Resignation from ADSEI by an accused member entity
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 Executive chairman at his or her discretion, irrespective of the accused member entity’s continued membership in ADSEI or participation in the complaint resolution proceedings.
This Code may be amended by vote of two thirds of the Board
of Directors.
As Adopted on June 15, 2021