Managing security funds and guaranteeing compensation for consumer damage:

KOSSA receives a certain rate of estimated sales amount from MLM business operators and pays the mutual aid fund to customers (including distributors) when MLM business operators are unable to fulfill the responsibility of refunding for consumers’ (including distributors) subscription withdrawal (cooling off).

Investigating the mutual aid accident and providing the mutual aid fund

• When consumers (including distributors) request subscription withdrawal (cooling off), MLM business operators shall refund within 3 business days from the request date (i.e. Article 18, Paragraph (2) of the DDSA).
• However, if MLM business operators are unable to refund regarding returned goods (hereinafter, ‘mutual aid accident’), consumers (including distributors) may claim the mutual aid fund to KOSSA by submitting the documents related thereto, in which case KOSSA may pay the fund in accordance with the relevant regulations and the DDSA after investigating the mutual aid accident.

KOSSA is different from general associations in terms of its function.

KOSSA, established in accordance with the DDSA, mainly takes a role of limited refunding of returned goods on behalf of MLM business operators when they are unable to handle subscription withdrawal (cooling off) of consumers, while general associations work for the benefits of members thereof.

Establishing and operating computer system for guarantee

• Upon reporting sales, distributors can search and print out the ‘Notice of the Mutual Aid Number’ issued by KOSSA from the webpage.
• Document titled ‘Notice of the Mutual Aid Number’, issued by KOSSA, is an evidentiary material to claim the mutual aid fund when the businesses are unable to refund on returned goods.
• KOSSA establishes and operates computer system connected to MLM business operators for such member companies’ sales report and KOSSA’s issuance of the ‘Notice of the Mutual Aid Number’.