Section 4 – Responsibilities and Obligations of all IBOs
Amway IBOs exercise a significant degree of autonomy over the way in which they operate their Amway businesses, but IBOs also bear responsibility under consumer protection legislation in each State and federally for fair and ethical conduct, not only with customers, but also with other IBOs.
This section effectively restates those legislative responsibilities in the context of the Amway business but goes further to outline the responsibility of IBOs to educate their sponsored IBOs, to avoid misrepresentation of the business, to protect confidential information and to responsibly monitor the conduct of non-Amway book, CD, DVD and seminar programs. The section also permits Amway to gain access to an IBO’s Amway records to monitor performance of these important responsibilities.Amway IBOs exercise a significant degree of autonomy over the way in which they operate their Amway businesses, but IBOs also bear responsibility under consumer protection legislation in each State and federally for fair and ethical conduct, not only with customers, but also with other IBOs.Amway IBOs exercise a significant degree of autonomy over the way in which they operate their Amway businesses, but IBOs also bear responsibility under consumer protection legislation in each State and federally for fair and ethical conduct, not only with customers, but also with other IBOs.
This section effectively restates those legislative responsibilities in the context of the Amway business but goes further to outline the responsibility of IBOs to educate their sponsored IBOs, to avoid misrepresentation of the business, to protect confidential information and to responsibly monitor the conduct of non-Amway book, CD, DVD and seminar programs. The section also permits Amway to gain access to an IBO’s Amway records to monitor performance of these important responsibilities.
Importantly, this section also seeks to protect the Amway businesses of existing IBOs by prohibiting IBOs from conducting any other multilevel marketing business in a way which may breach their contractual obligations, particularly with regard to the misuse of confidential information.
4.1 Abide by the Rules of Conduct and Amway Business Policies: At all times, IBOs must adhere strictly to the guidelines, procedures and policies stated in the Amway Rules of Conduct, or other Amway Business Publications in addition to the Amway Sales and Marketing Plan, and, in each case, any amendments made to those Amway publications from time to time. All IBOs must act in good faith and fair dealing under the terms of the IBO Contract.
4.1.1 Cooperation with Amway: IBOs shall at all times full and promptly work with and cooperate with Amway employees, including cooperating in any investigation undertaken by Amway into activities that are potentially in contravention of his or her IB or the IB of another IBO.
4.1.2 Amway issued directions: IBOs will at all times fully and promptly comply with all directions issued by Amway from time to time and work with and corporate with Amway employees.
4.2 Cross Group Buying or Selling/Supplying: No IBO shall engage in cross-group buying or selling/supplying. “Cross group buying and selling/supplying” occurs when a IBO sells or supplies Amway distributed or supplied products and/or services to another IBO who is not personally sponsored and downline of those sponsored, down to the next Platinum.
4.2.1 An IBO must only purchase Amway products and services and Amway BSM through his/her own LOS, or through Amway.
4.2.2 An IBO must not sell or supply Amway products and services to another IBO who is not personally sponsored and downline of those sponsored, down to the next Platinum.
4.3 Retail Stores: No IBO shall permit Amway products or services or Amway business aids to be sold or displayed in retail establishments or locations including, but not limited to schools, fairs, fetes, clubs, canteens, ships or military stores or any other venues which Amway considers to be a retail location; nor shall he or she permit any Amway products or services to appear in such locations even if the products or services are not for sale. No promotional material related to Amway products or services or Amway literature shall be displayed in retail establishments.
4.3.1 An IBO who works in or owns a retail store must operate his or her IB separate and apart from the retail store. Such IBO must secure customers for his/her Amway business in the same manner as an IBO who has no connection with a retail store and otherwise abide by this Rule 4.3. Other types of retail establishments, which are not technically stores, such as barber shops, beauty shops, or professional offices, etc., likewise may not be used to display Amway products, information about Amway services, or promotional material related to Amway products or services or Amway literature, subject to Rule 4.3.2.
4.3.2 Exceptions to the Retail Stores Rule: Notwithstanding Rule 4.3:
a) IBOs who are medical or allied health professional, nutritionists, dieticians, personal trainers or professional engaged in the practice of alternative medicine, who promote NUTRIWAY® vitamins and supplements, may recommend and/ or market these products through their professional practices subject to the rules and regulations of relevant professional associations and to Rule 4.3.3.
b) IBOs promoting ARTISTRY® products who have completed a government accredited beauty training program and are engaged in the provision of beauty therapy services on a professional basis may recommend and/or market ARTISTRY® products through their professional salons subject to Rule 4.3.3
c) IBOs promoting/selling selected XS™ Energy products, specifically drinks and chips, at retail locations may only use the promotional materials provided and approved by Amway, must ensure that the product is not displayed and that the contents are dispensed prior to the customer taking possession.
d) IBOs promoting SATINIQUE® products who have completed a government accredited hair care or hair dressing program and are engaged in the provision of hair dressing services on a professional basis may recommend and/or market SATINIQUE® products through their professional salons subject to Rule 4.3.3
4.3.3 The activities in Rule 4.3.2 may only be undertaken where the environment is one-on-one, the product is not displayed or promoted in a public area and where the following statement (or its substantial equivalent) is made: ‘These products are available exclusively through IBOs contracted to Amway throughout Australia/New Zealand. If you are already being supplied by another IBO and you wish to purchase these products you should purchase them from your existing IBO. If you are not an existing IBO customer or an IBO, I will be happy to supply these products’.
4.3.4 Re-sale: No IBO shall supply Amway products or services or Amway-distributed products or services to persons who wish to acquire such items for the purpose of resale.
4.4 Booth and Events: An IBO may request permission to attend selected events, including expos and shows, and be able to promote specified Amway product for the duration of the chosen event. This requires a written request and approval from Amway and is only available for specified products at related events. Refer to Amway’s Booth and Events Guidelines available on Amway’s Primary Website, as amended from time to time, for event requirements and a Booths and Events application form.
4.5 Truthful and Accurate: No IBO shall:
4.5.1 Make any offer to sell any Amway products or services which are not accurate and truthful as to price, grade, quality, performance, and availability;
4.5.2 In any way act so as to represent Amway, the Amway business or Amway products or services in a false or misleading manner or contrary to the directives, explanations and descriptions issued or made by Amway from time to time;
4.5.3 Make exaggerated or unwarranted product claims not authorised by Amway with regards to Amway’s products, services or products or services distributed by Amway;
4.5.4 In any way whatsoever, represent Amway incorrectly with regard to prices, quality, standards, grades, contents, style or model, use, composition, place of origin or availability of Amway’s products, services or products or services distributed by Amway;
4.5.5 State that Amway’s products, services or products or services distributed by Amway are sponsored, backed, approved, or present any features as regards to performance characteristics, accessories, uses or benefits that they do not have; or
4.5.6 Act or present in any way whatsoever Amway, its products or the products Amway distributes, in a fraudulent manner or promote or pass off products or services that do not belong to Amway as if they did.
4.6 Repackaging: An IBO may not repackage products, change the content of products, place additional words, labels or other materials on products or otherwise change or alter any of the packaging labels of Amway products or services, including the registration pack as supplied by Amway.
4.7 Written Sales Receipt: An IBO who takes and/or delivers an order shall deliver to the customer at the time of sale, a written and dated order or receipt which shall: (a) describe the product(s) sold, (b) state the price and date charged, and (c) give the name, address, and telephone number of the selling IBO.
4.8 Right to Payment: No IBO shall demand or assert a right to payment from another IBO, Member, Client or any other person for unsolicited goods or services.
4.9 Satisfaction Guarantee: Whenever a customer requests Satisfaction Guarantee service within the stated guarantee period, as per Amway’s Satisfaction Guarantee guidelines and after a bona fide assessment of the reasonableness of the request, an IBO shall offer the individual his or her choice of a: (a) full refund of the purchase price; (b) exchange for the same or a like product; or (c) full credit for exchange with another item.
4.9.1. IBOs shall advise Amway of any complaint regarding the Satisfaction Guarantee from a customer and provide copies of all correspondence and details of all conversations regarding the complaint as requested.
4.9.2. IBOs are not authorised to make any type of offer or compromise or render Amway liable for any complaint or product return.
4.9.3. IBOs will be held strictly liable for claims they make which exceed the terms of the Satisfaction Guarantee and shall indemnify and hold Amway harmless for claims made to that effect.
4.10 Compliance with Applicable Laws, Regulations and Codes: IBOs shall comply with all Country, Federal, State and local laws, ordinances, regulations and codes that apply to the operation of their IB wherever their business may be conducted. This includes, without limitation, all applicable Country, Federal and State consumer protection, anti-discrimination, equal opportunity and human rights laws. IBOs must not conduct any activity that could jeopardise the reputation of the IBO and/or Amway. Upon request, IBOs shall forthrightly provide any information requested about an IBO’s activities or any other activities known by the IBO (even with respect to other IBOs). In all such communications with Amway, the IBO shall act with absolute candor and good faith. IBOs shall indemnify Amway from and against all actions, claims, demands, prosecutions, fines, penalties and the costs thereof (including Amway’s actual legal costs) which might be made or brought against Amway in respect or arising out of any breach of any such laws, ordinances and regulations by the IBO.
4.11 Deceptive or Unlawful Trade Practices: No IBO shall engage in any deceptive or unlawful trade practice.
4.12 Unlawful Business Enterprises or Activities: No IBO shall operate any illegal or unlawful business enterprise, engage or participate in any illegal or unlawful business activity.
4.13 Professionalism; Disrepute: An IBO shall at all times conduct himself or herself in a courteous and considerate manner and shall not engage in any high-pressure tactics, but shall make a fair presentation of Amway products or services, or the Amway Sales and Marketing Plan, when and where appropriate. IBOs shall not make any representation or engage in or conduct any activity or do any other act, matter or thing which may bring either them or Amway or IBOs generally or any supplier of Amway distributed goods or services in disrepute.
4.14 IBO Relationship: The relationship between Amway and the IBO shall be that of wholesaler and retailer. No IBO shall represent that he or she has any employment relationship with Amway or any of its affiliated companies and/or other IBO, nor shall any IBO misrepresent the nature of the principal-independent contractor relationship between Amway and its IBOs. An IBO shall indemnify Amway from and against all actions, damages, claims, demands, prosecutions, fines, penalties and the costs thereof (including Amway’s actual legal costs) which might be made or brought or south against or suffered by Amway in respect of or arising out of any such misrepresentation or other conduct.
4.14.1. IBOs shall not give a false representation as to the nature of the relationship between Amway and its IBOs, or make any representation, except in accordance with the explanation given in Amway Business Policies or other official literature of Amway. An IBO is required to indemnify Amway for the cost, damage or prejudice stemming from such false representation, including any legal fees Amway may have incurred.
4.14.2. IBOs shall not imply that they are employees of Amway, nor shall they refer to themselves as “employees”, “agents,” “partners,” “joint ventures,” “master and servant,” “managers,” or “company representatives”, nor shall they use such terminology or descriptive phrases on their Stationery or other printed materials.
4.14.3. IBOs may not use their business cards to create the impression that they are in an employment relationship with Amway.
4.14.4. Amway and IBO hereby acknowledge and agree that:
a) IBOs are independent contractors and not employees of Amway;
b) the IBO is under no obligation to solicitor orders for the retail sale of Amway Products or applications for appointment as IBOs contracted to Amway;
c) the IBO is under no obligation to spend a specified time or any set hours conducting his/her IB;
d) the IBO is responsible for bearing all costs and expenses incurred in the conduct of his/her IB; and
e) the IBO is under no obligation to attend Amway meetings or other Amway functions although attendance at Amway meetings and Amway functions is encouraged.
4.15 Franchises and Territories: No IBO shall represent to anyone that there are exclusive franchises or territories available under the Amway Sales and Marketing Plan.
4.16 Protection of Confidential Information (Other Selling or Sponsorship Activities):
4.16.1 An IBO shall not, during of his/her contract with Amway, and for a period of 6 months after ceasing to be an IBO:
a) supply or sell to other IBOs, persons who have applied to become IBOs or persons who the IBO or other IBOs (to the knowledge of the IBO) have approached with a view to applying to become IBOs;
b) induce other IBOs, or any Prospects, to supply, sell or acquire; or
c) be directly or indirectly engaged or interested in, or permit or allow any servants or agents to be engaged or interests in; the supply or sale or the promotion of the supply or sale to other IBOs or Prospects of products or services which are sold or supplied by or through another multilevel marketing company or business.
4.16.2 The restrictions imposed by Rule 4.16.1 are separate, distinct, independent and severable, and in the event that any one or more of them is wholly or in part invalid, then the remaining restriction or restrictions shall nevertheless be valid or effective.
4.16.3 BSM distribution: Nothing in Rule 4.16 will service to prohibit arrangements solely for the distribution of BSM which are distributed pursuant to Section 7
4.16.4 Investments: An IBO will not induce or attempt to induce another IBO (or any person who has applied to become an IBO) whom he/she has not personally sponsored, to sell, supply or buy products, investments, investment services or investment programs not produced or supplier by Amway.
4.16.5 Alternative business: An IBO will not sell or supply or be directly or indirectly engaged or interested in the sale or supply of products not produced or supplied by Amway to any IBO (or any person who has applied to become an IBO) whom he/she has not personally sponsored, unless:
a) that other IBO or applicant approached the first IBO in the ordinary course of the first IBO’s business, to supply goods or services of a kind which the first IBO supplies in the ordinary course of his/her normal business trade or profession; and
b) at the time of the approach, the first IBO did not know or have reasonable cause for suspecting that the person making the approach was an IBO or a person who had applied to become an IBO.
4.17 BSMs must be presented as optional: No IBO shall state or in any way imply or represent that IBOs must acquire or subscribe to BSM generally or books, tapes, CDs, DVDs or other instructional, training or motivational material and/or to attend seminars, rallies, or meetings in order to join the Amway business or to succeed or fully or significantly succeed as an IBO contracted to Amway;
4.18 Amway Employees at IBO Meetings: Amway employees shall be entitled to attend and speak at all meetings of IBOs and IBO functions wherever held of conducted. This includes any held by the Line of Sponsorship/Affiliation.
4.19 Interference in another IB; Inducement: It is a breach of the Rules of Conduct or the Amway Business Policies for a IBO to:
4.19.1 Interfere or attempt to interfere with another IBO’s IB;
4.19.2 Induce or attempt to induce another IBO or client to change his/her Line of Sponsorship, to transfer or abandon his/her IB, or to sponsor or not sponsor a particular Prospect;
4.19.3 To induce or attempt to induce another IBO to deny training, education, motivation or other support to a downline IBO; or
4.19.4 To induce or attempt to induce another IBO to breach any Rules of Conduct or the Amway Business Policies.
4.20 Exporting Amway’s Products: No IBO may export or import, or sell to others who import or export, Amway’s products from any other country in which Amway has established operations, into any country regardless of whether or not Amway is doing business in that country. IBOs will supply Amway Products only in Australia and/or New Zealand and for a sale price in Australian or New Zealand dollars.
4.21 Retail Effort Rule: Amway pays Bonuses/Rebates under the Amway Sales and Marketing Plan based on sales to end consumers. For an IBO to be entitled to Bonuses/Rebates and/or qualification under the Amway Sales and Marketing Plan, that IBO’s purchases must be consumed or sold to end consumers within a reasonable period as determined by Amway. Amway reserves the right to deny all qualifications, awards and rewards if in Amway’s judgment, the IBO’s purchases are not in compliance to this rule.
4.21.1 Amway does not require stock keeping or purchase of inventory. IBOs may not purchase or counsel other IBOs to purchase product for any purpose other than the provision of such product to end consumers.
4.21.2 All IBOs must achieve, in the qualifying month, minimum sales and customer volume as specified by Amway from time to time in Amway publications.
4.22.1 Advertising: An IBO shall not publish or broadcast any advertisement in any manner whatsoever, including advertisements on e-commerce and social media websites, for the AMWAY business or products or the opportunity to become an IBO regardless of whether the Amway or Amway brand names is used or not
4.22.2 Mass mailing: An IBO may not present the Amway Sales and Marketing Plan or solicit participation in the Amway Sales and Marketing Plan or for the sale of product, through any broadcast communication methods including mass mailings, telemarketing, telephone canvassing campaigns, letter box drops, national or international advertising, radio, television, facsimile services, computer communication networks including the Internet, or any other means by which personal contact with a Prospect is not present.
4.23 Unsolicited E-mail Messages: No IBO shall send, transmit, or otherwise communicate any unsolicited electronic mail messages (“spam”) in whatever format to persons with whom the IBO does not have a pre-existing personal or business relationship and who has not consented to receiving such emails from the IBO. This includes, but is not limited to, sending e-mails, postings in news groups, mass SMS (Short Messaging System) messages, purchasing mailing lists, “safe lists”, or other lists of individuals or entities with which the IBO does not have a relationship.
4.24 Fundraising: No IBO shall use Amway products in conjunction with any type of fundraising activity. Fundraising includes but is not limited to the solicitation for the purchase of Amway products or services based on the representation that all, or some, of the gains, proceeds, Bonuses/Rebates, or profits generated by such sale will benefit a particular group, organisation or cause.
4.25 Amway Sales and Marketing Plan Manipulation: No IBO shall manipulate the Amway Sales and Marketing Plan or award volume in any way which results in the payment of Bonuses/Rebates or other awards and recognition that have not been earned in accordance with the terms of the Amway Sales and Marketing Plan and/or any Amway publication. In this regard, the strategic and artificial structuring of an Amway Line of Sponsorship for the purpose of depth building, whether or not there are relationships between those who are sponsored and those who sponsor, is considered to be manipulation and an unacceptable business practice. Amway at its sole discretion will determine what constitutes manipulation of the Amway Sales and Marketing Plan.
4.26 Personal/Business Information Update: All IBOs are responsible for communicating any updates or changes to their personal information (e.g., name, address, and telephone numbers, etc.) or business information (e.g., change of business status, etc.) to Amway.
4.26.1 An IBO shall provide Amway with the required details to be electronically paid any bonus due to them. Where an IBO fails to provide Amway with the required details, Amway may, after reasonable attempts to contact the IBO, pay such outstanding bonuses at its discretion
4.27 Confidentiality: In addition to the provisions contained in Section 9 of the Rules of Conduct, pertaining to the use of the Amway trade name, trademarks and copyrighted materials, Amway’s Confidential Information including, by way of example and not limitation, Line of Sponsorship information (i.e., information compiled by Amway that discloses or relates to all or part of the specific arrangement of sponsorship within the Amway business, including, without limitation, IBO lists, sponsorship trees, and all IBOs or Amway business information generated there from, in its present and future forms), business information, manufacturing and product development, business plans, and IBO sales, earnings and other financial information, etc., constitute commercially advantageous, unique, and proprietary trade secret and business secrets of Amway which it keeps proprietary and confidential and treats as a trade secret and business secret.
4.27.1 Amway is the exclusive owner of all Confidential Information, which is derived, compiled, configured, and maintained by Amway. The IBO acknowledges all Confidential Information is owned by Amway through the considerable expenditure of time effort and resources.
4.27.3 All IBOs shall maintain Confidential Information in strictest confidence, and shall take all reasonable steps and appropriate measures to safeguard Confidential Information and maintain the confidentiality.
4.27.4 A IBO shall not compile, organise, access, create lists of, or otherwise use or disclose Confidential Information except as authorised by Amway. An IBO shall not disclose Confidential Information to any third party, or use Proprietary Information in connection with any other businesses.
4.27.5 Use or disclosure of Confidential Information, other than as authorised by Amway, shall cause significant and irreparable harm to Amway, and Amway may claim appropriate, compensation for damages as well as demand a IBO refrain from the harmful conduct as well as seek any other remedies under applicable laws.
4.27.6 In case of disclosure of the Confidential Information, voluntary or not, by an IBO to any third person, the IBO should immediately notify Amway about that fact and take the necessary measures in order to
a) prevent further disclosure by such third party and (b) oblige such third party to sign a confidentiality and non-disclosure agreement for the benefit of Amway and under no less stringent terms that those provided within this Rule 4.27.
4.27.7 An IBO shall promptly return any and all Confidential Information or any copy of same to Amway upon resignation, expiration, failure to renew, denial of extension or termination of his or her IB and shall refrain from any further use.
4.27.8 The confidentiality obligations set out in this Rule 4.27 shall survive during the term of the IBO Contract as well as after the date of its expiration or termination by any cause.
4.28 Privacy Law; Consumer Law:
4.29 Presentation Rules: The content of the presentations which include or support the promotion of the retailing of Amway products and services, or the Amway Sales and Marketing Plan, must otherwise be in accordance with the following:
4.29.1 IBOs shall not:
a) exaggerate income representations by relating it to or incorporating it with other income and suggesting that it is the result of building the Amway business;
b) substitute group or non-Amway organisational identity for the Amway business. The Amway business must always be clearly identified without any ambiguity to the participants during the course of the presentation;
c) advocate, imply or give the impression that success can be achieved through promoting personal consumption with no requirement to sell or promote inappropriate product usage and/or claims;
d) promote one’s Line of Sponsorship, affiliation or group in any manner that will give rise to or likely to give rise to resentment by or cause any detriment to others;
e) misrepresent whether directly or indirectly and by whatever means the relationship of the IBO to Amway, for example, suggesting or implying that Amway is “just a supplier” or “distributor”, or that the IBO represents a business opportunity of which “Amway is a part of”, or that the IBO “outsources” administrative support to Amway, etc.;
f) promote any other business opportunity other than the Amway Business or solicit any participants to attend meetings for the purpose of presenting another business opportunity at any time; or,
g) use the meeting as a platform to promote or advocate religious, political and/or personal social beliefs.
4.29.2 Personal reflections on the following are not appropriate:
a) social and cultural issues;
b) preferences regarding specific political views, parties, candidates or elected officials.
4.29.3 Discussions must only relate to ethics and positive attitudes that will assist and encourage the IBO’s and Amway’s products, services and business.
4.29.4 Income representations, whether direct or implied, must reflect a realistic income potential from participation in the Amway Sales and Marketing Plan.
4.30 Activity outside the Australia and New Zealand Market or Activity outside the Market where the IBO is registered: IBOs who engage, directly or indirectly, in any activity related to the Amway business in a jurisdiction outside of Australia/New Zealand must do so in a manner that complies with the letter and spirit of the applicable laws, regulations, and rules, policies and procedures of the Amway affiliate in that jurisdiction, regardless of whether they are registered IBOs in that jurisdiction. Failure to do so shall be a breach of the IBO Contract.
4.31 Zero Tolerance Rule: It is a breach of the Rules or the Amway Business Policies for an IBO to conduct IB activities in markets in which he or she is not authorised to conduct business. It is a breach of the Rules or the Amway Business Policies to conduct IBO activities in markets in which Amway are not doing business. Such unauthorised activity may result in, without prejudice to any rights and remedies otherwise available, the immediate suspension of the IBO’s rights.
4.32 Record Retention
4.32.1 Record Retention for Australian IBOs: IBOs shall keep and preserve for at least 5 years or 7 years in the case of corporate IBOs (being the period prescribed by the Income Tax Assessment Act) up-to-date and accurate records of all business transactions made in respect of or in relation to his/her Amway IB and shall allow Amway and its servants and agents access to those records from time to time at the request of Amway and shall provide Amway with such written or oral explanations as Amway shall reasonably require of the IBO’s conduct as an IBO and of transactions effected by the IBO on Amway’s behalf or otherwise in respect of the Amway IB.
4.32.2 Record Retention for New Zealand IBOs: IBOs shall keep and preserve for at least the period prescribed by the Income Tax Act and the goods and Services Act up-to-date and accurate records of all business transactions made in respect of or in relation to his or her Amway IB and shall allow Amway and its servants and agents, access to those records from time to time at the request of Amway and shall provide Amway with such written or oral explanations as Amway shall reasonably require of the IBO’s conduct as an IBO and of transactions effected by the IBO in respect of his or her IB.
4.32.3 Record audit: If required by Amway at any time, the IBO will have records and accounts in respect of the Amway IB audited by an independent auditor nominated by Amway at the expense of Amway.
4.33 Consumer complaints: IBOs will immediately communicate all significant customer complaints to Amway and furnish copies of all correspondence and details of all conversations relating thereto.
4.34 Retraining: IBOs shall attend all retraining seminars or sessions referred to in Section 12.