Consumer Protection (Direct Selling) Rules, 2021

Central Government has notified the Consumer Protection (Direct Selling) Rules, 2021.

Where will these rules be applicable?

The new rules will be applicable to:

  1. All goods and services bought or sold through direct selling
  2. All direct selling entities offering goods & services to consumers
  3. All models of direct selling
  4. All forms of unfair trade practices in all models of direct selling
  5. Direct selling entity, not established in India but offering goods or services to consumers across India.

What are those rules?

  • Under the notified rules, direct selling entity and direct sellers have been prohibited from:
  1. Promoting a Pyramid Scheme or enrol any person to these
  2. Participating in money circulation scheme
  • State Governments have been mandated to do monitoring to ensure compliance of these rules.
  • Rules provides certain obligation upon Direct Selling Entities, including:
  1. They should have a at least one physical location as registered office within India.
  2. They should make self-declaration that Direct Selling Entity has complied with provisions of these rules and are not a part of Pyramid Scheme or money circulation scheme.
  • All products of a direct selling entity are mandated to comply with the declarations made under Legal Metrology Act, 2009.
  • Direct selling entity will have to establish an adequate grievance redressal mechanism. They will have to display the current and updated name, and other details on their website. Details of the website will have to be prominently printed on product information sheet or pamphlet.

Grievance redressal officer

As per new rules, Grievance redressal officer will have to acknowledge the receipt of any consumer complaint within 48 working hours of receipt of the complaint. They shall redress the complaint within one month from the date of receipt of complaint. In case there is delay, reasons for the delay and the actions taken on it will have to be informed to the complainant in writing.

Nodal Officer

Every direct selling entity are required to appoint a nodal officer who will be responsible to ensure compliance with the provisions of the Act and these rules.


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