- Recently, the Centre has notified Consumer Protection (Direct Selling) Rules, 2021 for the direct selling industry.
- It prohibits promotion of pyramid schemes and participation in money circulation schemes.
- It has been notified in exercise of the powers conferred by the Consumer Protection Act, 2019.
- Earlier, the government notified and made effective the provisions of the Consumer Protection (E-Commerce) Rules, 2020 under the Consumer Protection Act, 2019.
- The rules lay down duties and obligations of both direct selling entities and their direct sellers to “safeguard the interest of consumers’’.
- The existing direct selling companies will need to ensure they comply with the rules within 90 days.
- However 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.
Applicability of the Rules
- 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 practises across all models of direct selling.
- To direct selling entities which are not established in India, but offers goods or services to consumers in India.
Consumer Protection (e-Commerce) Rules, 2020
- The Consumer Protection (E-commerce) Rules, 2020 are mandatory and are not advisories.
- Apply to all e-commerce retailers, whether registered in India or abroad, offering goods and services to Indian consumers.
- E-commerce entities need to appoint a nodal person, resident in India to ensure compliance with the provisions of the act or rules.
- The sellers through the e-commerce entities will have to display the total price of goods and services offered for sale along with the break-up of other charges.
- Expiry date of the good needs to be separately displayed.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT