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    Providing Services As A Part of Network of Direct Selling, Other Than A Pyramid Scheme

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    Naveen Shah
    The Indian Direct Sellers Association (IDSA) was established in 1996 as a self-regulatory body for the direct selling industry in India. Before the Model Guidelines on Direct Selling, IDSA maintained legal and ethical standards in the absence of legislation. The Model Guidelines provide rules for both consumers and direct sellers. Key highlights include: defining direct selling; requiring entities to be legal and protect direct sellers; mandating record keeping, websites, and consumer complaint resolution; restricting deceptive recruiting and unverifiable claims; requiring valid contracts that allow direct sellers to terminate with notice; protecting consumers through disclosure of information and prohibiting unfair practices; and providing for consumer protection laws and grievance redressal committees. State governments monitor and

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    Providing Services As A Part of Network of Direct Selling, Other Than A Pyramid Scheme

    Uploaded by

    Naveen Shah
    30 views2 pages
    The Indian Direct Sellers Association (IDSA) was established in 1996 as a self-regulatory body for the direct selling industry in India. Before the Model Guidelines on Direct Selling, IDSA maintained legal and ethical standards in the absence of legislation. The Model Guidelines provide rules for both consumers and direct sellers. Key highlights include: defining direct selling; requiring entities to be legal and protect direct sellers; mandating record keeping, websites, and consumer complaint resolution; restricting deceptive recruiting and unverifiable claims; requiring valid contracts that allow direct sellers to terminate with notice; protecting consumers through disclosure of information and prohibiting unfair practices; and providing for consumer protection laws and grievance redressal committees. State governments monitor and

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    IDSA Doc

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    The Indian Direct Sellers Association (IDSA) was established in 1996 as a self-regulatory body for the direct selling industry in India. Before the Model Guidelines on Direct Selling, IDSA maintained legal and ethical standards in the absence of legislation. The Model Guidelines provide rules for both consumers and direct sellers. Key highlights include: defining direct selling; requiring entities to be legal and protect direct sellers; mandating record keeping, websites, and consumer complaint resolution; restricting deceptive recruiting and unverifiable claims; requiring valid contracts that allow direct sellers to terminate with notice; protecting consumers through disclosure of information and prohibiting unfair practices; and providing for consumer protection laws and grievance redressal committees. State governments monitor and

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    30 views2 pages

    Providing Services As A Part of Network of Direct Selling, Other Than A Pyramid Scheme

    Uploaded by

    Naveen Shah
    The Indian Direct Sellers Association (IDSA) was established in 1996 as a self-regulatory body for the direct selling industry in India. Before the Model Guidelines on Direct Selling, IDSA maintained legal and ethical standards in the absence of legislation. The Model Guidelines provide rules for both consumers and direct sellers. Key highlights include: defining direct selling; requiring entities to be legal and protect direct sellers; mandating record keeping, websites, and consumer complaint resolution; restricting deceptive recruiting and unverifiable claims; requiring valid contracts that allow direct sellers to terminate with notice; protecting consumers through disclosure of information and prohibiting unfair practices; and providing for consumer protection laws and grievance redressal committees. State governments monitor and

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

     Introduction

    The Indian Direct Sellers Association (“IDSA”) was incorporated in Mumbai in 1996 and
    moved to its registered office to New Delhi in 1998. It is a self-regulatory body which
    acts as an interface between the industry and policy-making bodies of the Government
    (Ministry of Consumer Affairs) facilitating the cause of Direct Selling Industry in India.
    Before the inception of Model Guidelines on Direct Selling, it was IDSA that was
    maintaining the legal and ethical standards in the direct selling. In absence of any
    legislation in place, the Model Guidelines are the rulebook to follow. The IDSA yet
    prescribes standard and procedure for incorporating a direct selling company.

    These guidelines provide not only for the consumers who are the direct recipient of the
    practice but also for the ‘sellers’ who are appointed or authorised by the ‘Direct Selling
    Entity’ to undertake the business activities.

     Highlights of the Model Guidelines


    • Entry 6 of Clause 1 defines “Direct Selling” as marketing, distribution & sale of goods or
    providing services as a part of network of Direct Selling, other than a pyramid scheme.
    Thus, the definition in itself inter alia includes marketing of goods & services.
    • Clause 2 provides for the Entity to be legal. It mentions protective measures for the
    Direct Seller like fair remuneration and buy-back guarantee. It also requires for the
    Entity to set up an office with identified jurisdiction in its place of operation – to address
    concerns wrt prices, returns or replacements, delivery or after-sales service.
    • Clause 3 talks about record keeping - be it as an owner or holder or any Intellectual
    Property Rights (“IPR”) or as an employer/authoriser of Direct Sellers maintaining
    registers, issuing IDs. It also requires to be set up, a website with particulars of the entity
    like product profile & management and consumer redressal system; & mandates
    redressal within 45 days.
    • Clause 3 also provides for a restriction on practices to be indulged in by a Direct Selling
    Entity, such as:-
    i. Using misleading or deceptive recruiting practices including misrepresentation of
    potential earnings.
    ii. Making or permitting to make any factual representation to a non-member that
    cannot be verified or making any promise that cannot be fulfilled.
    • Clause 4 of the guidelines requires a Contract to be valid in law and prevents
    mentioning of specifics such as unreasonable minimum purchase for direct seller.
    Also, the Direct Seller is allowed to terminate his contract with reasonable notice.
    • Clause 5 is consumer centric. It prohibits Direct Sellers to visit costumers’ premises
    without prior notice and identification. It requires true, accurate and complete
    disclosures and demonstrations of goods and services, prices, returns and after sales
    policy and not to engage in unfair trade practices or deceptive selling.
    • Clause 7 talks about consumer protections as both the Direct Selling Entity & the
    Direct Sellers are governed by the Consumer Protection Act, 1986. Providing a
    complaint number and allowing tracking of the same should be enabled. Every entity
    is required to constitute a Grievance Redressal Committee, who composition &
    responsibilities are specified.
    • Clause 9 has provided for the State Government (Dept. of Consumer Affairs) to set
    up a mechanism to monitor & supervise the activities of Direct Sellers, Direct Selling
    Entity’s and the guidelines.

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