DSA Saudi Arabia Code of Practice


Applying with a membership with the DSA Saudi Arabia is voluntary decision and all future members must undergo a level of scrutiny during the first 6 [six] months before Full Membership is granted. Applicants must go through a rigorous check and all new applicants will be offered Provisional Member before being granted Full Membership at the discretion of the Executive Board. Members displaying Provisional Membership must adhere equally to the Code of Practice and it is therefore a strong ethical tick when a company is a member of the DSA in Saudi Arabia.

Executive Summary

The Direct Selling Association of Saudi Arabia (DSA) Code of Practice provides a clear framework of operational ethics and standards for Direct Selling companies and Direct Sellers (distributors) in Saudi Arabia. This Code of Practice clearly defines expectations of performance and ethical standards required by the companies in their dealing with Direct sellers and the Direct sellers’ dealing with consumers or end users of the product or service. The Code of Practice set out are to be regarded as a minimum requirement which may be exceeded by individual companies in their operating practices.

Through this Code of Practice, the DSA seeks to ensure that industry standards and professional practices for customers are clearly understood and delivered by all involved. This Code of Practice aims to ensure that our member companies’ and their independent distributors’ ethical standards and operating principles are relevant and appropriate in Saudi Arabia and are consistent with the objectives of the World Federation of Direct Selling Associations (WFDSA) and its global member associations.
In order to become a member of the DSA and maintain that membership, Direct Selling companies are required to demonstrate adherence to the requirements set out here. In most cases requirements stated in this document exceed local legal requirements. DSA Code of Practice is not the same as the local law and companies and Direct Sellers operating in Saudi Arabia are also required to fully comply with local laws and regulations.

Target Audience

This document contains guidance on the interaction between the following parties residing and operating in Saudi Arabia

  1. DSA member Companies and their existing and prospective sales representatives
  2. DSA member Companies and their sales representatives and Consumers of the Company’s Products
  3. Member Companies as they compete in the marketplace, and
  4. Individual Complainants, the DSA Code Administrator, and DSA member Companies. 


Parties Promise

Companies
Companies pledge to adopt and enforce a code of conduct that incorporates the substance of the provisions of this Code as a condition of admission and continuing membership in the DSA. Companies also pledge to publicize this Code, its general terms as they apply to Consumers and Direct Sellers, and information about where Consumers and Direct Sellers may obtain a copy of this Code.

Direct Sellers
Direct Sellers are not bound directly by this Code, but, as a condition of membership in the Company’s distribution system, shall be required by the Company with whom they are affiliated to adhere to rules of conduct meeting the standards of this Code.

DSA
DSA pledges that it will require each member Company – as a condition to admission and continuing membership in the DSA – to comply with the WFDSA World Codes of Conduct for Direct Selling with regard to direct selling activities outside of its home country, unless those activities are under the jurisdiction of Codes of Conduct of another country’s DSA to which the member also belongs.

Protecting Consumers

Direct Sellers Obligations

Direct sellers are obliged to conform to the following: They must

  • operate within the laws and regulations of Saudi Arabia and be cognizant of local culture and norms
  • not use false, misleading, deceptive or unfair sales practices including but not limited to:
    • standard, quality, value or grade
    • any supporting testimonial
    • any sponsorship or approval
    • the performance of the product
    • it’s place of origin
    • a need for a product
    • any guarantee or warranty of the product, or
    • any rebate, gift or other item associated with it’s supply
  • truthfully and clearly identify themselves, their Company, the nature of their Products, and the purpose of their solicitation to the prospective Consumer.
  • offer Consumers accurate and complete Product explanations and demonstrations regarding price and, if applicable, credit terms
    • terms of payment
    • a cooling-off period, including return policies
    • terms of guarantee
    • after-sales service, and
    • delivery dates
  • give accurate and understandable answers to all questions from Consumers
  • make only those verbal or written product claims, with respect to product efficacy, that are authorized by the Company
  • refrain from inducing 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 are contingent upon some uncertain, future event,
  • not misrepresent the actual or potential sales or earnings of themselves
  • if requested, the Direct Seller must cease the presentation and leave the person’s presence.


Delay

If a product is not delivered:

  • within seven days after an agreed date, the consumer must be advised of the delay.
  • within twenty one days after an agreed date, the consumer may cancel the agreement to purchase without cost.


Companies Obligations

Ordering and Delivering

A (paper or digital) Order Form (or receipt) shall be delivered or made available to the Consumer at or prior to the time of the initial sale. The Order Form must clearly

  • identify the Company and the Direct Seller and their respective contact information, and
  • include all material terms of the sale, terms of a guarantee or a warranty, and limitation of after-sales service.

Companies must fulfill Consumer orders in a timely manner.

Promotional Activities

Promotional material, advertisements, testimonials, and mailings shall not contain Product descriptions, claims, photos or illustrations that are deceptive or misleading. Promotional literature shall contain the name and address or telephone number of the Company and may include the telephone number of the Direct Seller.

Return of Goods

Whether or not it is a legal requirement, Companies shall offer a cooling-off period permitting the customer to withdraw from the order within a specified, reasonable period of time. The cooling-off period must be clearly stated. Companies and Direct Sellers offering a right of return, whether conditioned upon certain events or whether unconditioned, shall provide it in writing.

Protecting Direct Sellers

First and foremost, Companies must require their Direct Sellers, as a condition of membership in the Company’s distribution system, to comply with the standards of this Code.

Furthermore, Companies must:

  • not use misleading, deceptive or unfair recruiting practices in their interaction with prospective or existing Direct Sellers
  • provide accurate and complete information to prospective or existing Direct Sellers concerning the opportunity and related rights and obligations
  • not make any factual representation to a prospective Direct Seller that cannot be verified or make any promise that cannot be fulfilled
  • not present the advantages of the selling opportunity to any prospect in a false or deceptive manner
  • provide Direct sellers with periodic accounts concerning, as applicable, sales, purchases, details of earnings, commissions, bonuses, discounts, deliveries, cancellations, and other relevant data, in accordance with the company’s arrangement with the Direct Sellers
  • pay all the monies due and any withholding made in a commercially reasonable manner
  • not misrepresent the actual or potential sales or earnings of their Direct Sellers
  • provide to their Direct Sellers either a written agreement to be signed by both the Company and the Direct Seller or a written statement, containing all essential details of the relationship between the Direct Seller and the Company
  • inform their Direct Sellers of their legal obligations, including any applicable licenses, registrations and taxes
  • not require Direct Sellers or prospective Direct Sellers 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 company’s distribution system. Any fees charged to become a Direct Seller shall relate directly to the value of materials, products, or services provided in return
  • not require or encourage Direct Sellers to purchase Product inventory in unreasonably large amounts
  • take 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
  • prohibit Direct Sellers from marketing or requiring the purchase by others of any materials that are inconsistent with Company policies and procedures
  • provide adequate training to enable Direct Sellers to operate and behave ethically at all times and with an understanding of the importance of professionalism, and
  • take diligent, reasonable steps to ensure that sales aids produced by Direct Sellers comply with the provisions of this Code and are not misleading or deceptive.


Conduct Between Companies

Member Companies of DSA must adhere to the following:

  • conduct their activities in the spirit of fair competition towards other members
  • refrain from systematically entice or solicit Direct Sellers of another Company, and
  • avoid to 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.


Code Enforcement

Companies’ Responsibilities
The primary responsibility for compliance of the Company and its Direct Sellers with the Code shall rest with each Company. In case of any breach of this Code, Companies shall make every reasonable effort to satisfy the complainant.

Code Administrator
DSA shall appoint an independent person or body as Code Administrator. The Code Administrator shall monitor Companies’ observance of this Code by appropriate actions and shall be responsible for complaint handling and a set of rules outlining the process of complaint resolution. The Code Administrator shall settle any unresolved complaints of Consumers based on breaches of this Code.

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 other relationships with the Company, and warnings to Companies.

Complaint Handling
DSA and the Code Administrator shall establish, publicize and implement complaint handling procedures 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.

Publication
All Companies are required to publicize DSA’s Code of Practice to their Direct Sellers and consumers.

Note: This document is adopted from the World Federation of Direct Selling Association (WFDSA) Code of Ethics document, printed October 2008.