Amway Australia Pty Limited Distribution Practices

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BusinessQuestions On Notice, Second Reading

Mr Scully asked the Minister for Consumer Affairs, Minister Assisting the Minister for Roads and Minister Assisting the Minister for Transport -

(1) (a) Is she aware of the methods used by promoters of Amway products to obtain sales?
    (b) Do some of these methods include dishonest, unethical and inappropriate behaviour?
    (c) What steps will she take to warn the general community of the methods and harassment of potential purchasers used by promoters of Amway products?
(2) (a) Is she familiar with the organisation Network 21?
    (b) Is she aware that this organisation promotes the sale of Amway products by engaging in dishonest conduct and unethical methods?
    (c) Will she instruct the Department to launch an investigation into Amway and Network 21 and the methods used by both organisations to promote their products?
    (d) Will she warn the general public to be careful when having any contact with any person from Network 21 in particular, and in general any person promoting Amway products?

Answer -

(1) (a) Distributors of Amway products usually obtain sales by showing the Amway catalogue to family, friends and workmates who are invited to make purchases.
        Distributors obtain a commission from sales.
        Distributors also generate income by receiving commissions on the sales of other distributors who they have introduced to the system.
    (b) Amway is reputed to have around 100,000 distributors throughout Australia. Complaints against Amway or Amway distributors are very few and indicate little cause for concern. My Department recently prosecuted an Amway distributor for misleading conduct involving the potential recruitment of distributors. This followed a complaint from Amway Australia Pty Ltd concerned that the distributor was promoting a work-at-home scheme that was not subject to the company's Rules of Conduct.
    (c) Should the honourable member be in possession of specific information about dishonest or unethical methods of promotion and harassment of potential purchasers, that information should be brought to the attention of the Department of Consumer Affairs for investigation.

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(2) (a) I am aware that Network 21 is a subgroup of Amway distributors which incorporates a program of motivational training.
    (b) My Department has only had three formal complaints against Network 21 which were very minor in nature. A small number of telephone enquiries have been received from callers who have alleged that certain Network 21 distributors have engaged in undesirable selling practices, however, there has been no information provided on a formal basis to enable the allegations to be properly considered by the Department.
    (c) Subject to my response to answer (1) (c) above, there does not appear to be any substantial reason to launch an investigation into Network 21 or Amway Australia.
    (d) At this time there appears to be no justification for issuing a public warning against Network 21 or Amway Australia.