8. What types of practices adopted by multi-level marketing businesses and participants are prohibited by the Multi-level Marketing Supervision Act?
According to Article 19 of the Multi-level Marketing Supervision Act, the following types of practices adopted by multi-level marketing businesses and participants are prohibited:
- Requesting that participants pay fees obviously incompatible with the corresponding expenses needed for training, workshops, get-togethers, meetings, promotions or activities under any other titles
- Demanding that participants pay obviously inappropriate guarantees, breach-of-contract fines or expenses
- Forcing participants to purchase good quantities that are impossible to sell within a short period under normal circumstances; situations in which agreements are established for participants to make payments after selling the goods are not included
- Giving certain individuals special offers that are in violation of established sales plans or structures and causing damage to the interests of other participants
- Using inappropriate methods to push participants to make purchases or give them the right to set up sales networks at multiple levels
- Imposing obviously unfair obligations on participants
As for participants, they may not engage in practices other than the type described in Item (D).
In addition to the prohibited practices specified above, all other sales practices adopted by multi-level marketing businesses and participants must comply with related regulations set forth in the Multi-level Marketing Supervision Act.
Relevant article(s) of law: Multi-level Marketing Supervision Act, Article 19
Updated at：2016-02-22 16:40:50