[Red:] My good friend @mlmintelligence is back, with a follow-up to Part I of her Introduction to MLMs! They work as a collaborative, intelligence-gathering consumer information point, with the aim to provide research and education on multi-level marketing companies.
Before reading @mlmintelligence’s article, please remind yourself that all views presented here are those of the authors, and simply reflect their own opinions and personal experiences. Your own personal experiences with MLM companies may differ, negatively or positively.
Over to you, @mlmintelligence!
[MLM Intel:] Thank you, Red – good to be back. Before we can delve into understanding these particular multi-level marketing (MLM) grey areas, we need to understand how refunds work in Australia. According to the Australian Consumer and Competition Commission (ACCC):
If a product or service you buy fails to meet a consumer guarantee, you have the right to ask for a repair, replacement or refund under the Australian Consumer Law. The remedy you’re entitled to will depend on whether the issue is major or minor.
Let’s dissect this a little further — let’s first look at the consumer guarantee.
CONSUMER GUARANTEE AND CONSUMER RIGHTS
A consumer guarantee is a consumer right set out by the ACCC, and legislated by the Australian Consumer Law (ACL). In basic terms, it works under the proviso that when you buy products and services, they come with an automatic guarantee that they will work and do what you asked for. If by chance it doesn’t work, then you have certain consumer rights to cover you should you seek a refund, repair or replacement.
Consumer guarantees apply on products and services.
Products must be of acceptable quality, that is:
- Safe, lasting, with no faults
- Look acceptable
- Do all the things someone would normally expect them to do.
There is an inherent expectation for each product type and cost, that they will be similar to like type products.
The following list is only some of the required characteristics for this section of the consumer guarantee. For the purposes of this post, only those that relate directly to MLMs will be listed, however footnote 6 has the entire list if you want to read more.
Products must also:
- match descriptions that have been made by the salesperson on any packaging, advertising, labels, promotional material
- match the description of any sample you’ve been provided
- be fit for the purpose the sales person or business has told you it will be fit for (and anything you may have previously told the business you intend to use it for prior to purchase)
- must meet any additional promises made such as lifetime guarantees or money back offers, performance requirements, condition and quality
- have spare parts and repair facilities available for a reasonable time after purchase.
Now the next part is where it starts to get murky — the consumer guarantee applies on transactions between a purchaser and a retailer, and only if the products or services do not meet one or more of the elements of the consumer guarantee. If the relationship and contract (i.e. sale or purchase of an item) is between a retailer and a purchaser, then the remedies that an individual can seek can include a repair, replacement or refund and, in some cases where applicable, compensation for damages or loss.
However, the consumer guarantee does not apply in relationships where there are other intermediaries, for example wholesalers or manufacturers. Manufacturers can supply warranties to consumer products, and a consumer can seek assistance from a manufacturer if the goods do not meet one or more of the following consumer guarantees:
- acceptable quality
- matching description
- any extra promises made about such things like performance, condition and quality
- repairs and spare parts — the manufacturer is responsible for ensuring that spare parts and repair facilities (a place that can fix the consumer’s goods) are available for a reasonable time after purchase unless you were told otherwise. How long is ‘reasonable’ will depend on the type of product.
In addition, there are exceptions to guarantees which include:
- the item you purchased is what you asked for however you have changed your mind, found it cheaper elsewhere or decided you had no further use of the product
- misused a product in any way to render it to have a problem
- knew of or were aware of any faults with the product, but continued to purchase it anyway.
Rights to a repair, replacement, refund, cancellation or compensation do not apply if you plan to on-sell or change a product so that you can re-supply it as a business.
But how does this relate to MLM you ask? Well … I’ll show you, in the final, thrilling instalment, Part 3!
REFERENCES USED IN THIS ARTICLE
 “Repair, replace, refund,” ACCC, accessed at https://www.accc.gov.au/consumers/consumer-rights-guarantees/repair-replace-refund
 “Consumer guarantees,” ACCC, accessed at https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees
 Again, this is just a list of items where MLMs would be relevant this is not the entire list of elements where these rules apply. For these full listings, please see the link at Footnote 6 (in the next post!)
- Australian Competition and Consumer Commission
- QLD Gov: Refunds
- NSW Gov: Fair Trading
- ACT Gov: ACT Revenue Office
- VIC Gov: Consumer Affairs
- TAS Gov: Consumer Affairs and Fair Trading
- SA Gov: Refunds
- WA Gov: Refunds
- NT Gov: Refunds
- MLM: SECTION 6: Network Marketing and the Law (US Article)