Consumer Protection Authority Issues Notices to 17 Direct Sellers, including QNet Franchise Vihaan

Moneylife Digital Team 13 December 2024

Investor Interest

The central consumer protection authority (CCPA) has issued notice to 17 entities that were found violating Consumer Protection (Direct Selling) Rules, 2021. Of these, 13 entities are currently under investigation and reply from three of the entities is awaited, the CCPA says.

The 17 entities that received notices from CCPA for alleged unfair trade practices, service deficiencies and violations of the Consumer Protection (Direct Selling) Rules, 2021, include: Vihaan Direct Selling (India) Pvt Ltd (a sub-franchise of QNet Group, Hong Kong), Triptales Pvt Ltd, and Oriens Global Marketing Pvt Ltd.

Other direct sellers that were issued notices are: Zennesa Wellness Pvt Ltd, Orgolife Solutions Pvt Ltd, Oriflame India Pvt Ltd, Juncture Marketing Pvt Ltd, Wolte Marketing Pvt Ltd, Preet Life Care Pvt Ltd, Enroots Horizon Pvt Ltd, E biotorium network Pvt Ltd, Meghdoot Marketing Pvt Ltd, Suii Dhaaga Lifestyle Pvt Ltd, Winmarg Business Pvt Ltd, Ayusratna Natural Herbal Pvt Ltd, Biothon Lifecare Pvt Ltd and Okflip India Pvt Ltd.

As a part of its commitment to uphold consumer rights, CCPA has intensified its focus on regulating direct selling activities and ensuring compliance with relevant legal frameworks. In this regard, Authority says it carefully examined the websites of these direct-selling entities.

The government of India notified the Consumer Protection (Direct Selling) Rules, 2021, establishing a comprehensive framework to regulate direct selling entities and protect consumer interests. These rules aim to promote transparency, accountability, and ethical practices within the direct selling industry, enabling consumers to make informed decisions.

However, CCPA says some fraudulent entities misuse the direct selling model to promote illegal pyramid or money circulation schemes. "These entities often make unrealistic promises of high commissions, foreign trips, entrepreneurship, high returns and wealthy future, contingent on recruiting others, which violates consumer trust and established laws, thereby exposing consumers to a fraudulent pyramid and money circulation schemes."

Three significant signs that a product is being used to disguise pyramid schemes are: a large joining fee or investment, compensation paid for recruiting and no right of return, buy-back or cooling-off period offered to consumers.

"Consumers are advised to stay vigilant and report any suspected illegal activities or violations related to direct selling to the appropriate authorities. Together, we can ensure a safe and trustworthy marketplace for all," the authority says.

You may want to read Moneylife coverage on MLM, direct selling or chain-money scams. Here is the link https://moneylife.in/economy-and-nation/mlm-chain-money

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