Japan’s Consumer Affairs Agency has issued a partial business suspension order to Amway Japan for illegally soliciting people over network marketing.
The agency says the firm invited individuals to become members and promote the sales of its products. It also says the firm urged the members to solicit other people to become salespersons, and that they would receive referral fees.
The specified commercial transactions law stipulates that a business operator is obliged to inform consumers of the names of the solicitors and the operator, as well as the purpose of solicitation.
But the agency says that Amway Japan has violated the law since at least March of last year. The authorities say the firm invited people without informing them of its name or its purpose, using hard-sell tactics and issuing no documents.
The agency on Friday ordered Amway Japan to suspend part of its business, including solicitation activities and making contracts, for six months. The agency also instructed the firm to create a system to prevent a recurrence.
Amway Japan says that some members conducted illegal acts, and that it will take measures to improve its business and prevent a recurrence. The firm says these measures will include reviewing its ethics platform, code of conduct