NEM Develops Code of Conduct for Network Marketing

The National Energy Marketers Association has adopted a Code of Conduct for its members that use network marketing to acquire new customers, under which suppliers will not use telemarketing or door-to-door sales as part of such network marketing.

NEM network marketing companies that have voluntarily endorsed the Code of Conduct are ACN Inc., Ambit Energy, Ampegy, North American Power, Stream Energy, UCI, and Viridian Energy.

Specifically, NEM's Network Marketing Code of Conduct includes the following:

- Independent representatives of network marketing companies shall not use either telemarketing or door-to-door sales techniques for the purpose of acquiring customers.

- A network marketing company shall ensure its independent representatives have received adequate training and information about the nature of the product and the terms and conditions of its sale as well as all market-specific regulatory compliance requirements.

- Network marketing companies shall establish and maintain a clear channel of accountability for the actions of its agents.

- Any marketing materials utilized by an independent representative of a network marketing company shall be pre-approved by such company.

- A network marketing company shall utilize a verifiable quality control process to ensure the integrity of consumer enrollments.

Craig Goodman, President of NEM, said that the Network Marketing Code of Conduct would be incorporated into a broader, general industry Marketing Code of Conduct effort under development by NEM. The broader NEM Marketing Code of Conduct, "recognizes that telemarketing and door-to-door sales are legitimate and valuable means to educate and enroll customers for competitive energy services, given the appropriate oversight," NEM said in a press release.