In order to bring stability in the market, they further introduced the Consumer Protection Direct Selling Rules, 2021 on December 28, 2021 and the recent notification dated April 4, 2022 in order to provide more clarity regarding the compliance of the provisions of the Rules.
The Consumer Protection Direct Selling Rules, 2021 came into force on December 28, 2021. The Rules prohibit participation and/or promotion of pyramid schemes and money circulation schemes. The Direct Selling Rules are applicable to any entity offering goods and services in India, whether or not such entity is established in India. The Direct Selling Rules applies to both Direct Sellers and Direct Selling Entities. Further such entities must comply with the provisions within ninety (90) days from the date of its publication.
Key highlights of Direct Selling Rules, 2021
- Both direct selling entity and direct sellers utilizing e-commerce platforms for sale must comply with the new rules.
- Every direct selling entity must develop a system for consumers to file complaints with its offices, branches or direct salespeople, either in person by mail, telephone, email or through a website.
- Such entities guarantee that ads for the marketing of products or services are accurate in terms of the items or services' real qualities, access and usage circumstances.
- A direct selling entity that openly or implicitly vouches for the authenticity of the products or services offered, or assures that such goods or services are legitimate, is liable in any action involving the authenticity of such goods or services.
- Every direct selling entity must become a partner in the Central Govt's National Consumer Helpline's convergence process.