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Chain of happiness coming to an end: Legal infrastructure for a 10 billion lira system

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Regulations that will provide more effective protection for consumers have come into effect. The aim of the regulation is to end pyramid scheme fraud. The distinction between chain of happiness and direct sales system has been clarified. The legal infrastructure of direct sales systems, which have an economic size of 10 billion lira and are mostly made up of women, and approximately 2 million people engage in activities to earn income, has been strengthened. The law on consumer protection accepted at the Turkish Grand National Assembly and the law on making changes in some laws has been published and enacted. According to information obtained from the Ministry of Trade on the subject, the law in question brought provisions concerning commerce in daily life. In this context, it was made possible to establish distance housing finance contracts, providing convenience to both the sector and consumers. In line with the widespread use of digital and branchless banking, it was made easier for consumers to access financing rapidly through remote communication tools. Special regulations for the direct sales system have been introduced to contribute to women’s participation in the economy. By strengthening the legal infrastructure of direct sales systems, the majority of which are women and approximately 2 million people engage in activities to earn income, with an economic size of 10 billion lira, more effective legal protection has been provided both to consumers and to direct sellers who want to earn income. THE DISTINCTION BETWEEN PYRAMID AND DIRECT SALES IS CLARIFIED Moreover, the distinction between illegal pyramid schemes referred to as “chain of happiness” by the public and direct sales was clarified, aiming to prevent the damages caused by illegal pyramid systems. In this regard, the responsibilities of direct sales companies and the basic principles of the system were determined, facilitating the information of consumers purchasing from the system and the exercise of their withdrawal rights. Sanction provisions were reorganized in compliance with the principles of proportionality and deterrence by the law. With the aim of increasing the deterrent effect of administrative fines imposed by the Advertising Board, the Board was given the authority to impose these fines up to 10 times within the framework of the criteria specified in the law. ADMINISTRATIVE FINES WILL BE IMPOSED The administrative fine obligation for providing information and documents was reorganized taking into account the principle of proportionality. Deterrent administrative fines were envisaged to be imposed on those who do not comply with the obligations related to the direct sales system. Penalties imposed by the Advertising Board were also included in the scope of reconciliation. In this context, unlawful advertising or unfair commercial practices targeting consumers were included in the scope of the reconciliation institution specified in the law. Thus, both the cost-effective and rapid collection of public receivables and the reduction of the judiciary’s workload were ensured. Furthermore, the Ministry continues its work to develop, improve, and take necessary measures to prevent grievances of consumers by considering their changing needs. The provisions of the regulation regarding direct sales and administrative fines will come into effect 9 months later.

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