The Union Government Notified Consumer Protection Rules 2021

Story Highlights
  • Union government notified Consumer Protection Rules.
  • It'll be applicable to all goods, services bought or sold.
  • All direct selling companies, sellers are prohibited from promoting pyramid scheme.

New Delhi: The Union government has notified the Consumer Protection Rules, 2021, and asked the direct selling companies to comply with these rules within 90 days. According to the new rules of the Ministry of Consumer Affairs, Food and Public Distribution, it will be applicable to all goods and services bought or sold through direct selling, all direct selling companies offering goods and services to consumers in India, including a direct selling entity, which is not established in India, but offers goods or services to consumers.

Under the new norms, all the direct selling companies and sellers are prohibited from promoting a pyramid scheme or enrolling any person on such scheme or participating in such arrangement in any manner whatsoever in the garb of doing direct selling business or participating in money circulation scheme in the garb of doing direct selling business. The new rules direct the state governments to set up a mechanism to monitor and supervise the activities of direct sellers and direct selling entities while it makes a mandatory obligation for direct selling entities such as incorporation under the Companies Act, 2013, or if a partnership firm is registered under the Partnership Act, 1932, or if a limited liability partnership is registered under the Limited Liability Partnership Act, 2008.

The new rules also specified that every direct selling entity must ensure that the advertisements for marketing of goods or services are consistent with the actual characteristics, access and usage conditions of such goods or services while no direct selling entity should directly or indirectly, falsely represent itself as a consumer and post reviews about its goods or services or misrepresent the quality or features of any of its goods or services. Every direct selling entity must maintain a record of relevant information allowing for the identification of all direct sellers who have been delisted by the direct selling entity and such list must be publicly shared on its website and all direct selling entities must become a partner in the convergence process of the national consumer helpline of the Central government, the new norms added.

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