REGULATIONS ON THE DIRECT SELLING SYSTEM MADE THROUGH THE LAW ON AMENDMENTS TO THE LAW ON CONSUMER PROTECTION AND CERTAIN OTHER LAWS
The Law on Amendments to the Law on Consumer Protection and Certain Other Laws ("Law") was published in the Official Gazette dated 30.10.2024 and numbered 32707. This Law includes specific regulations on the Direct Selling System and administrative fines.
The Direct Selling System was previously referenced in Article 47, paragraph 7, of the Consumer Protection Law No. 6502 ("CPL") as follows: "The mandatory content of the contract, excluded contracts, direct sales, the rights and obligations of the consumer and the seller or provider, the right of withdrawal, the obligation to inform, delivery, qualifications required for sellers, and other procedural and substantive rules shall be determined by regulation." Now, however, the Direct Selling System will be directly included in the CPL as Article 47/A, under the title "Direct Selling System," following Article 47.
The provisions established by the adopted Law are listed below:
- The Direct Selling System is defined as "a sales system created by a direct selling company, where independent representatives, distributors, consultants, and similar roles, who are not employed under an employment contract, market goods or services to consumers in exchange for benefits such as commissions, bonuses, incentives, and rewards."
- Direct selling companies are required to be incorporated as capital companies and must fulfill other conditions specified in the regulations.
- The Direct Selling System must primarily focus on the sale of goods or services to consumers, rather than being based on generating revenue by recruiting new direct sellers and distributing benefits that arise from this. It must also adhere to other principles established by regulation.
- Direct sellers cannot be required to pay fees or incur debts under names such as renewal, package, fees, dues, or similar items if these do not involve goods or services intended for sale to consumers. The amount or value of goods or services purchased from the company cannot determine the direct seller's level within the system.
- Consumers who purchase goods or services within the Direct Selling System have the right to withdraw from the contract within thirty days, without providing any reason or paying a penalty. Notifying either the direct seller or the direct selling company within this period is sufficient to exercise the right of withdrawal.
- Direct selling companies are required to establish a system to ensure that consumers are informed and able to communicate requests and notifications on matters specified by the Ministry.
- The rights and obligations of direct selling companies, direct sellers, and consumers; excluded contracts; the sale of goods or services; the right of withdrawal; the obligation to inform; delivery; and other procedural and substantive rules will be determined by regulation.
For violations of the obligations specified in the second and third paragraphs of Article 47/A of the Law, an administrative fine of five million Turkish Liras will be imposed for each violation. For violations of the obligations specified in the fourth, fifth, and seventh paragraphs, an administrative fine of 2.200 Turkish Liras will be imposed for each instance of non-compliance. Additionally, those who violate the obligations in the sixth paragraph of Article 47/A will be given three months to remedy the violation. If the violation is not resolved within this period, an administrative fine of one million Turkish Liras will be imposed.
Conclusion
The provisions related to the direct selling system and administrative fines in the Law will come into effect nine months after their publication in the Official Gazette. The Law, which includes numerous changes to the direct selling system, aims to facilitate company oversight and support a healthier structure, while providing consumers with more flexible options for accessing information and exercising their right of withdrawal, thereby ensuring a more reliable service.