Fair Trade Commission Disposal Directions (Guidelines) on Reviewing Cases Involving Illegal Commissioning of Household Production

Passed by the 327th Commissioners' Meeting on February 11, 1998
Circulation by Order (87) Kung Er Tzu No. 00957 on March 16, 1998
Amended by the 688th Commissioners' Meeting on January 13, 2005
Promulgated by Order (94) Kung Yi Tzu No. 0940001278 on February 24, 2005
Amended by Order (94) Kung Fa Tzu No.0940006991 on August 26, 2005
Amended by the 809th Commissioners' Meeting on May 10, 2007
Promulgated by Order (97) Kung Er Tzu No.0960004543 on May 28, 2007

1. (Purposeˇ^
   These guidelines are adopted especially to ensure fair competition, maintain trading order and consumers' interests, and effectively review cases involving illegal commissioning of household production.
2. (Definition)
   The term "illegal commissioning of household production" as referred to herein means the act of an enterprise pretendedly soliciting nonspecific individuals (agent workers) to undertake household production, while actually engaging in selling household production materials or equipment to the agent workers, or collecting fees by any means.
3. (Forbidden Deceptive conductsˇ^
   Enterprises shall not engaged in any of the following deceptive acts that are sufficient to adversely affect the trading order:
   Falsely solicits and misleads agents to sign a household production contract through fraud or intentional concealment of important trading information;
   Falsely recruits agents, where in fact its main source of income is the selling of household production materials or equipment to the agent workers or fees collected by any means.
   Where there are no sales channels for the finished products that the enterprise recalls from the agent workers, or where the sales proceeds are obviously less than the fixed costs, the enterprise shall be presumed to have sold materials for household production or equipment, or collected fees by any other means, as its main source of income.
4. (Forbidden Obviously Unfair Conductsˇ^
   Enterprises shall not engaged in any of the following obviously unfair acts that are sufficient to adversely affect the trading order:
   Breaching its contractual obligations of explanation, good care and cooperation; or contract with the applicants by taking advantage of their carelessness, urgency or inexperience.
   Based on its superior contractual position, requiring agents to pay a specified fee for purchasing work-required materials or equipment, or collecting fees by any other means and specifying in the contract that all disbursements are non-refundable.
   When contracting with the agents, having obtained unjustifiable economic benefits from the agent workers.
5. (Penalty)
   An enterprise, which meets the descriptions set forth in Article 3 or 4, is in violation of Article 24 of the Fair Trade Law.
6. (Other acts violating the Fair Trade Lawˇ^
   The relevant provisions of the Fair Trade Law shall apply to other acts of illegal commissioning of household production not provided for in these Guidelines. Where serious fraud is involved, the case shall be referred to the prosecutors' office for prosecution.