Direct Sales Act to be updated for modern times, says official

Ministry of Domestic Trade And Consumer Affairs chief secretary Datuk Seri Hasnol Zam Zam Ahmad addresses the media during a press conference in Putrajaya August 13, 2020. — Picture by Shafwan Zaidon
Ministry of Domestic Trade And Consumer Affairs chief secretary Datuk Seri Hasnol Zam Zam Ahmad addresses the media during a press conference in Putrajaya August 13, 2020. — Picture by Shafwan Zaidon

KUALA LUMPUR, Aug 13 — The Domestic Trade and Consumer Affairs Ministry (KPDNHEP) will review the Direct Sales and Anti-Pyramid Scheme Act 1993 to ensure its continued relevance in the digital age, said Datuk Seri Hasnol Zam Zam Ahmad.

The ministry’s secretary-general said that among matters needing reviewing was to account for technological developments that have emerged since the law was enacted nearly three decades ago.

“We have to factor in things like e-commerce, and the necessity of the cooling-off period as found in the Act,” he said after attending the roundtable session with the Direct Sales Association (DSAM) and Direct Distribution Association (MDDA) earlier today.

Hasnol explained that the cooling-off period mandated that direct-selling schemes must give new buyers 10 days to reconsider before executing their orders.

“This is seen as somewhat outdated. What if you signed up for health supplements which you require as soon as possible?

“So the review of the Act will address this. It should also be noted the review will also seek to tighten the laws against unethical forms of direct sales including pyramid schemes and money games,” he said.

The secretary-general warned that any company caught engaging in such illicit behaviour will face stiff action, including the cancellation of their business licences.

Hasnol added the ministry will form a committee to conduct the review, with participation from DSAM and MDDA.

“We expect it to take up to six months, while workshops and engagement sessions will also be conducted with direct sales companies for their input.

“Townhall sessions will also be held to get the public’s view on things, so the review is expected to conclude by the first quarter of 2021,” he said.

Following this, the framework to the amended Act will be drafted, factoring in the Regulatory Bank Assessment and input from the Attorney-General’s Chambers.

“We aim to bring this to Parliament for tabling by the end of next year. But the timeframe will depend on whether the issues we encounter are complex or otherwise,” Hasnol said.

The meeting, chaired by minister Datuk Alexander Nanta Linggi, sought to assist direct sales businesses in handing the impact of the Covid-19 on their industries.

The recent report by the World Federation of Direct Selling Association places Malaysia in the 7th position globally in terms of value, with an estimated RM18.7 billion in 2019, also making it the 4th largest in the Asia-Pacific region as a whole.

Based on the ministry’s statistics, the wellness category contributed 47 per cent of direct sales revenue per annum, followed by self-care and cosmetics at 19 per cent, house appliances at 16 per cent, food and beverages at eight per cent, and clothing and accessories at five per cent, among others.

The direct sales industry in Malaysia involves four million active participants, with women dominating the field at 64 per cent while men account for 36 per cent of all participants.


 

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