Government notifies Consumer Protection rule; Direct selling companies can not promote Pyramid Scheme

• Integrity Education, Delhi
• 29, Dec 2021

Centre has notified the Consumer Protection (Direct Selling) Rules, 2021. These Rules shall apply to all goods and services bought or sold through direct selling, all models of direct selling, all direct selling entities offering goods and services to consumers in India, all forms of unfair trade practices across all models of direct selling. These Rules shall also apply to a direct selling entity which is not established in India, but offers goods or services to consumers in India.

Existing direct selling entities need to comply of these rules within ninety days from the date of publication of these rules in the Official Gazette. The direct sellers as well as the direct selling entities using e-commerce platforms for sale shall comply with the requirements of the Consumer Protection (e-Commerce) Rules, 2020.

Both direct selling entity and direct sellers are prohibited from promoting Pyramid Scheme or money circulation scheme. State Government must set up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities. Direct selling entities will be liable for the grievances arising out of the sale of goods or services by its direct sellers.

Sources : News On Air