What are the changes on multi-level sale in the Draft Law on Protection of Consumer Rights Amended in Vietnam?
What is multi-level sale by the Draft Law on Protection of Consumer Rights Amended in Vietnam?
According to Point b, Clause 3, Article 36 of Draft Law on Protection of Consumer Rights Amended (Draft 2), multi-level selling is a sale activity through a network of participants consisting of many levels and branches, in which participants are enjoyed commissions, bonuses and other economic benefits from the results of their own sales and those of others in the network.
How are contract to participate in multi-level selling regulated?
According to Article 45 of Draft Law on Protection of Consumer Rights Amended (Draft 2), contract to participate in multi-level selling as follows:
- Multi-level selling organizations and individuals participating in multi-level selling must enter into written contracts.
- The contract for participation in multi-level sale must include the following basic contents:
+ Name of multi-level selling organization, legal representative, contact information of multi-level selling organization;
+ Full name, date of birth, permanent address (or registered residence for foreigners), place of residence (permanent residence or temporary residence in case of not residing at the place of permanent residence), phone number , bank account number, identity card number or citizen identification number or passport number of multi-level sale participants; work permit number in case the multi-level sale participant is a foreigner;
+ Full name and code of the introducer (sponsor);
+ Information about business products by multi-level method;
+ Rights and obligations of the parties, ensuring compliance with the provisions of this Law and relevant laws;
+ Regulations on payment by bank transfer for commissions and bonuses;
+ Regulations on product acquisition;
+ Cases of termination of the contract to participate in multi-level selling and the obligations arising therefrom;
Contract dispute resolution mechanism.
- A contract for participation in multi-level sale must satisfy the conditions on form specified in Article 22 of this Law.
What are the responsibilities of multi-level selling organizations and individuals?
According to Article 44 of the the Draft Law on Protection of Consumer Rights Amended (Draft 2), the responsibilities of multi-level sale organizations and individuals are specified as follows:
Responsibilities of a multi-level sales organization:
+ Publicly posting operational documents at the head office, branches, representative offices and business locations of the multi-level selling organization;
+ Properly complying with operating rules and bonus payment plans;
+ Issuing invoices for each sales transaction;
+ Buying back products at the request of individuals participating in multi-level sales within 30 days from the date of receipt of goods;
+ Supervising activities of individuals participating in multi-level sales;
+ Being responsible for multi-level sale activities of multi-level sale participants;
+ Only selling products in the form of multi-level.
- Responsibilities of individuals participating in multi-level selling
+ Present your membership card before introducing or marketing or selling;
+ Comply with the contract of participation in multi-level sales and operating rules;
+ Not to take advantage of their positions, powers, social and professional positions to encourage, request, entice or entice others to participate in the multi-level sales network or buy business products by Multilevel.
- Illegal multi-level selling acts:
+ Requiring other people to deposit or pay a certain amount of money to sign a contract to participate in multi-level selling;
+ Requiring other people to buy a certain number of products in order to sign a contract to participate in multi-level selling;
+ Allowing multi-level sale participants to receive money or other economic benefits from referring other people to participate in multi-level selling activities, but not from the purchase and sale of products of such introduced persons;
+ Refusing to pay without justifiable reasons commissions, bonuses or other economic benefits to which multi-level sale participants are entitled;
+ Providing false information about the compensation plan, about the benefits of joining the multi-level sales network;
+ Providing false and misleading information about the features and uses of products or activities of the multi-level selling organization through reporters, trainers at conferences, seminars, training or information through documents of the multi-level selling organization;
+ Maintaining more than one multi-level sale participation contract, multi-level business location, multi-level business code or other equivalent forms for the same multi-level sale participant;
+ Other illegal acts of multi-level selling as prescribed by the Government.
Download the Draft Law on Consumer Protection here.
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