Laws & Regulation

   ci

A BRIEF OVERVIEW OF THE MUTUAL AID COOPERATIVE & CONSUMER ’S
CONSUMER INDEMNITY INSURANCE AUTHORITY



MAC&CO has administrative responsibilities under DDSA relating principally to the consumer protection mission.

Current articles of DDSA

* Principal points at issue of the enforcement decree Ⅰ

Subject Current enforcement decree
Responsibility Reinforcement (DDSA Article 27) The multi-level sales proprietor has to notify the sales person not to commit illegal acts
Limitations on Subscription Retraction (DDSA Article 17) A consumer who has purchased goods from a multi-level sales person will initially request retraction from the sales person. However, if the address of the sales person is unclear or the sales person neglects the refund request, consumer can retract the subscription directly from the sales proprietor.
Limitation on Subscription Retraction by a multi-level sales
person (DDSA Article 18 (2), Presidential Decree Article 24)
A multi-level sales person may retract the subscription within 3 months, provided that 5% is deducted in case of the excess of 1 month and 7% is deducted in case of the excess of 2 months

* Principal points at issue of the enforcement decree Ⅱ

Subject Current enforcement decree
The alteration of payment standard for sponsorship compensation (DDSA Article 20 (2), enforcement decree Article 26) If the payment standard for sponsorship compensation is changing, there should be a 3 month prior notice or acceptance by a sales person
Limitation of Burden (DDSA Chapter Article 23) For every sales person, the annual burden is limited to less than 50,000 KRW
Limitation on transaction price for individualized goods
(enforcement decree Article 30)
1,300,000 KRW

* Principal points at issue of the enforcement decree Ⅲ

Subject Current enforcement decree
The transfer of a sales organization and the sale by selling agent agreement (DDSA Article 23) If a multi-level sales business is transferred or merged etc., an exception is granted and allowed. A sale by selling agent by means of the multi-level sale organization is allowed, however the multi-level sales proprietor and the one requesting the selling agent arrangement takes responsibility.
Consumer damage compensation insurance 
(DDSA Article 5)
It is required of a multi-level sales proprietor to have insurance, other sales proprietors are recommended to have insurance and the proof of such insurance will be a grounds for establishing the Cooperative. The standard of insurance is limited to more than the amount necessary for refund of the goods which falls into the retraction of subscription.There should be insurance that compensates for the damages caused by illegal action to protect consumers who have purchased goods.
Limitation on transaction price for individualized goods
(presidential decree Article 30)
1,300,000 KRW