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New Delhi:
The Center notified new rules to the direct selling industry that prohibit both direct selling entities and direct sellers from promoting any pyramid scheme or money circulation scheme.The rules imply duties and obligations for direct selling entities and direct sellers in order to protect the interests of consumers.
A statement from the Department of Consumer, Food and Public Distribution said on Tuesday that direct selling entities would be liable for grievances resulting from the sale of goods or services by its direct sellers. Existing direct selling entities must comply with these rules within 90 days.
State governments should put in place a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.
The releases say that direct sellers, as well as direct selling entities using e-commerce platforms for sale, must comply with the requirements of the Consumer Protection (E-Commerce) Rules, 2020.
He said the central government has notified the Consumer Protection (Direct Selling) Rules, 2021 and these will apply to all goods and services bought or sold through direct selling, all models of direct selling, to all direct selling entities offering goods and services to consumers in India, all forms of unfair trading practices in all direct selling models and also to a direct selling entity which is not established in India but which offers goods or services to Indian consumers.
Direct selling entities and direct sellers are prohibited from “promoting a pyramid scheme or enrolling any person in such a scheme or participating in such an arrangement in any way as part of a sales activity. direct “.
They are also prohibited from participating in money circulation programs under the guise of direct selling.
“The rules provide for state government oversight. To ensure that these rules are followed by the direct selling entity and the direct sellers, each state government should put in place a mechanism to monitor or supervise the activities of the direct sellers and the direct selling entity. “
A direct selling entity must have at least one physical location as its head office in India.
They should have a complaints officer to acknowledge receipt of any consumer complaint within 48 business hours of receiving such complaint and resolve the complaint normally within one month.
Each direct selling entity is also required to have a nodal agent who will be responsible for ensuring compliance with the provisions of the Act.
“Each direct selling entity should establish a mechanism for submitting consumer complaints through its offices or branches or direct sellers, in person or by mail, phone, email or website,” the communicated.
“Each direct selling entity must, upon written request made by a consumer after the purchase of any good or service, provide him with information concerning any direct seller from whom that consumer has made a purchase,” he added.
The release says a direct seller should not visit a consumer’s premises without an identification card and an appointment or pre-approval and provide documentation to a prospect, which has not been approved by the direct sales entity.
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The main recommendations that can be implemented in the short term include restricting lending activities only to entities regulated by the RBI. A self-regulatory organization (SRO) to oversee standards and best practices among digital lending companies is another crucial suggestion.
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