Consumer Protection ( Direct Selling ) Rules, 2021 are new rules issued by the Government of India that apply to direct selling companies and their distributors. This rule came into effect on 15 September 2021. 

   


                       

This rule is designed to protect and safeguard consumers who buy products or services sold by direct-selling companies

 Consumer Protection ( Direct Selling ) Rules, 2021

    The rules have the following provisions for consumers

     

    1. Consumers should give correct information about the products or services sold by direct selling companies.

     

     2. Consumers should be advised of products or services as per their needs and requirements.

     

     3. The consumers should be given correct information about the price list of the products or services and the quality of the products.

     

     4. Period and back to the consumers before purchasing the products or services

     

     5. Consumers should be informed of any change in the quality or use of the products or services.

     

     6. Consumers should be informed about returns and refunds.

     

     7. Consumers should refer to the dividend for the purchase of products or services.

     

     8. The information about the accounts of the consumers should be kept secure.

     

     9. Consumers should be encouraged to read and understand the authorization agreement before accepting the products or services.

     

     10. Consumers must be asked about the schemes to give their opinion.

     

     

     The rules have the following provisions for companies and their distributors

     

     1. Companies and distributors should give correct information to consumers.

     

     2. Companies and distributors must safeguard the information of consumers for their safety and security.

     

     3. Companies and distributors should have return and refund arrangements for products or services. 

     4. Companies and distributors must inform consumers of any changes in the quality and use of products or services.

     

     

     5. Companies and distributors need to be sensitive to inform consumers of potentially favorable changes.

     

     6. Companies and distributors should inform consumers about various schemes and plans for products or services.

     

     7. Companies and distributors should encourage consumers to read and understand the authorization agreements before obtaining permission for products or services.

     

     8. Companies and distributors should handle consumer complaints and resolve them promptly when they need to be rectified.


     9. Companies and distributors need to explain the products or services to the consumers, such as giving information about their uses and utilities.

     

     10. Companies and distributors must provide consumers with verified information about your potential statistics and results regarding products or services.

     

     

     11. Companies and distributors selling products or services must be honest and fair with consumers.

     

     12. Must follow the terms and conditions for the products or services and share them with the consumers.

     

     13. It is the responsibility of the companies and distributors to provide proper and verified details for selling or promoting the products or services.

     

     14. Companies and distributors should not use any inducement to sell products or services to consumers.

     

     

     15. A reasonable price should be fixed for the products or services which is possible for the consumers and thereby gives them satisfaction. 


     16. Companies and distributors should not mislead consumers while promoting or selling products or services.

     

     

     17. Companies and distributors must provide the appropriate structure and operations for the products or services that are essential to their success.

     

     18. Must adhere to high standards for the quality of products or services.

     

     19. Companies and distributors must use appropriate marketing to sell or promote products or services and have a responsibility to provide consumers with the most profitable options possible.

     

     20. Companies and distributors should treat consumers with responsibility and respect. If they are faced with consumer complaints or dissatisfaction-related issues, they can take appropriate steps to rectify them.



     

     The Consumer Protection (Direct Selling) Rules, 2021 is an effort by the Government of India for consumer protection for direct selling of products and services. This would be for the manufacturers and distributors who are involved in the direct selling business. This would include all the products or services that are sold in the direct selling business, such as try business, network marketing, home product business, etc.

     

     The rules detail various restrictions for the protection of consumers. This will be important for distributors and manufacturers who do direct selling of their products or services. This rule will make people selling these products or services more responsible for ensuring the quality of those products or services.



      This rule will apply to all manufacturers, distributors, agents, and dealers in the field of direct selling. Its main objective will be to protect the consumers.

     

     According to this rule, the information available for products or services should be verified. Manufacturers and distributors must provide accurate information about their products or services. This will be very beneficial for the consumers, as they will be able to get the right information about their buying possibilities.


    What information must be given to the consumer


    The Consumer Protection (Direct Selling) Rules, 2021 mandate manufacturers and distributors to provide complete information to consumers based on their preferences for those selling their products or services 


    The following points are to be considered:

     

     1. Name of the product or service

     

     2. Uses and benefits of the product or service

     

     3. Price of the product or service

     

     4. Quality of the product or service

     

     

     5. Features and brief of the product or service Description

     

     6. Information on the availability of the product or service, such as where it can be purchased

     

     7. Contact information available to inquire about the product or service, such as phone number, email ID, website, etc.

     

     8. Product or service Any terms related to warranty, return policy, exchange policy, etc.

     

     

     According to this rule, manufacturers and distributors will be required to provide information on their newsletters, websites, or social media to expose their content to potentially sensitive consumers. With this, consumers can get the right information about the product or service, so that they will not have any problem related to purchasing the product or service.


    Consumer Protection Agencies


    Under this rule, consumer protection agencies will be formed, which will listen to the complaints of the consumers and mediate the problems with them. To protect their rights, these agencies will provide information to the consumers about the revised rules and help them to protect their interests. Product or service providers who violate the rules will be targeted and prosecuted.


     According to this rule, direct-selling companies have been given the responsibility to follow the rules along with their distributors. They should be able to control the behavior of their distributors and motivate them to follow the rules. Selling the product or service will require providing appropriate training and support to its distributors so that they can provide correct information and accurate advice about the product or service.



    Some Questions (FAQs) You May Have in Your Mind


    1) What does the Consumer Protection (Direct Selling) Act 2021 define as 'Direct Selling' ?

      The act defines direct selling as the marketing and selling of products or services directly to consumers in a non-retail environment, such as in their homes or workplaces.


    2) Can consumers cancel their direct selling purchases under the Consumer Protection (Direct Selling) Act 2021?

     Yes, consumers have the right to cancel their purchases within a specified cooling-off period, usually within a certain number of days, and obtain a refund if they change their minds.


    3) What penalties can direct selling companies face for violating the Consumer Protection (Direct Selling) Act 2021? 

     Violations of the act can result in penalties, fines, or legal actions against the direct selling companies, including injunctions, seizure of assets, and the revocation of licenses or permits to operate.