On 15-07-2022, the Consumer Affairs, Food & Civil Supplies Department, Andhra Pradesh has notified AP Consumer Protection (Direct Selling) Rules, 2021 to define direct selling entity, cooling off period, money circulation scheme, etc.
Applicability: The Rule is applicable to all goods and services bought or sold through direct selling, and also applies to direct selling services which is not established in India.
Key Points:
- Maintenance of Records: Every direct selling entity must maintain its record, either manually or electronically and required the documents like Certificate of Incorporation; Memorandum of Association (MoA) and Articles of Association (AoA), GST Returns, Income Tax Returns, Balance Sheet and Audit report etc.
- Obligation of Direct Selling Entity
- direct selling entity include companies incorporated under Companies Act, 2013; partnership firm registered under Partnership Act, 1932 or a Limited Liability Partnership (LLP) registered under Limited Liability Partnership Act, 2008.
- have a registered office within India.
- maintain proper and updated website with all relevant details of that entity. All information provided in website duly certified by a Company Secretary (CS).
- have a prior written contract with its direct seller and also, ensure the verified identities, addresses, and documents of a direct seller.any misleading, deceptive or unfair trade practices are not used.
- Duties and Obligations of direct selling entity: Direct seller must ensure that—
- actual product delivered to the buyer matches with the description of the given product.
- direct seller shall not visit a consumer’s premises without ID card and prior appointment.
- terms of the offer are clear, so that the consumer know the exact nature of offer being made.
- goods and services offered are accurate and complete with regard to price.
- right of return offered by that entity shall be in writing.
- Person of unsound mind or who is convicted, or bankrupt during the last five years cannot be engaged in the business of direct selling.
*Disha Srivastava, Publication Assistant has reported this brief.
