Consumer Rights and MLM in Russia: What You Need to Know

Being a trend in Russia, Multi-Level Marketing (MLM) provides an avenue for earning income by selling products and recruiting others into the business. However, because of past unfortunate instances of fraudulent schemes masqueraded as MLMs, the Russian government put consumers under severe protection. 

It is advantageous to know your rights as a consumer and to recognize lawful MLM practices in order to be able to make choices that best suit your needs.

Legal Framework Governing MLM in Russia

In Russia, MLM is legally present but controlled by many consumer protection and anti-fraud regulations. The following are some major laws relevant to MLM activities:

• The Federal Law on Protection of the Rights of Consumers – The law ensures fair dealing practices, truthful advertising, and consumers’ rights to the refund of the purchase price, and/or guarantees on products.
• The Civil Code of the Russian Federation – The civil contract law applicable to MLM companies.
• The Federal Law on Advertising – Prohibits misleading claims regarding possible earnings and product effectiveness.
• The Criminal Code of Russia – Outlaws pyramid schemes that operate more on recruitment than on product sales.

MLM is monitored by the Federal Antimonopoly Service (FAS) to ensure that it operates legally without deceptive practices.

Consumer Rights in MLM Transactions

Right to Transparent Information

Consumers have the right to receive clear and correct information about the MLM company’s business model, compensation structure, and product pricing. The following are expressly required from MLM companies:

• Real income potential (as opposed to exaggerated success stories).
• Terms and conditions pertaining to joining and selling.
• The company’s legal status is registered and compliant.

Right to Refunds and Product Guarantees

Russian laws safeguarding consumer rights entitle the customer to the following:

• A cooling-off period (generally 14 days) for the return of goods without costs;
• Refunds on defective products or those that were misrepresented;
• Indemnification if the MLM company is guilty of unfair trade practices.

Protection Against Pyramid Schemes

Pyramid schemes, which make all their money by recruiting instead of selling products, are illegal in Russia. If the company pushes you to invest considerably upfront or if the company is interested more in recruitment than in selling products, then it might be a fraudulent scheme.

Right to Fair Marketing Practices

In Russia, MLM companies cannot engage in false advertising and misleading testimonials. A company promoting market earnings unrealistic or claiming that its product has health benefits without scientific proof is violating consumer rights.

Conclusion

While MLMs are legal in Russia, they must obey stringent laws protecting consumers. As consumers, knowledge of your rights goes a long way toward evading impostors and making informed decisions. Always check if an MLM company is legitimate, read its contract thoroughly and report any scams to the Federal Antimonopoly Service (FAS).