Centre drafts rules to regulate direct selling companies

New Delhi: Companies that are in the process of direct selling will be made to register their entities under the rules that have been drafted by the Consumer Affairs Ministry of the Union government. The draft rules also propose a mechanism whereby the interests of both the companies and customers will be safeguarded.

According to the Draft, the direct selling companies will not be allowed to levy registration or entry fees from customers or agents or the cost of equipment and materials for sales demonstrations.

The draft rule under the Consumer Protection Act will have legal validity, the violation of which will be subjected to penalties. All the direct selling firms operating in India will have to comply with the norms within 90 days, according to the draft.

The direct selling companies will have to register with the Department for Promotion of Industry & Internal Trade (DPIIT) and will be required to have at least one office in India. The website and all invoices of such entities will need to have the registration number displayed prominently. Dedicated executives need to be deputed for grievance redressal and for compliance with government directives. These entities will also be required to have a 24x7 customer care number to resolve issues.

A direct selling company is one that sells products and services directly to consumers, away from fixed retail locations. Such companies usually market their products via independent sales representatives person to person.