New Rules Notified For Direct Selling Industry, Pyramid Schemes Banned

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The Ministry of Consumer Affairs released the notification of the Consumer Protection (Direct Selling) Rules, 2021. Apart from direct selling companies, sellers selling goods directly to customers on e-commerce platforms will also come under the purview of this rule. Under the new rules, the state governments will have to make a system to keep an eye on the activities of the direct selling units.

A senior official of the Ministry of Consumer Affairs said, “For the first time, rules have been made for direct selling companies under the Consumer Protection Act. Penal steps will also be taken against these companies for not following these rules.

According to the new rules, direct selling companies and direct sellers will not be able to promote pyramid schemes nor will they be able to trick any person into being a part of the direct selling business. Till now these companies have been running such schemes to promote sales. Apart from this, they will also be banned from running schemes for spreading money in the name of direct selling business.

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Welcoming this move of the government, direct selling companies said that with the introduction of new rules, more clarity will come and this business will get legitimacy. Apart from this, it will help in attracting foreign direct investment (FDI) and bringing new technology in the coming times.

IDSA, an organization of direct selling companies, said that this step will give strength to this sector, which employs about 70 lakh people. IDSA chief Rajat Banerjee said, “We welcome the new rules. We have been suggesting this to the government for the last two years. We wholeheartedly support it.

Vivek Katoch, Director (Consumer Affairs-Asia), Oriflame India, said that the Direct Selling Rules will not only protect the industry and consumers from pyramids and money laundering schemes, but will also give legitimacy to the direct selling business in the country.

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(Except for the headline, this news has not been edited by the NDTV team, it has been published directly from the Syndicate feed.)


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