CCPA issues notices to 17 direct selling entities for rule violations
The Central Consumer Protection Authority issued notices to 17 direct selling entities for violating the Consumer Protection (Direct Selling) Rules, 2021, it announced on 13 December 2024.
Summary
The Central Consumer Protection Authority (CCPA) has issued notices to 17 direct selling entities found violating the Consumer Protection (Direct Selling) Rules, 2021, the Consumer Affairs Ministry announced on 13 December 2024. Thirteen of these entities are under investigation and replies from three are awaited. The notices, issued after examining the entities' websites, allege unfair trade practices, service deficiencies and rule violations. The CCPA listed three major signs that a product is being used to disguise a pyramid scheme: a large joining fee or investment, compensation paid for recruiting, and no right of return, buy-back or cooling-off period.
Key facts
- Authority
- Central Consumer Protection Authority (CCPA)
- Notices
- 17 direct selling entities
- Status
- 13 under investigation; replies awaited from 3
- Rules
- Consumer Protection (Direct Selling) Rules, 2021
- Pyramid scheme signs
- Large joining fee; pay for recruiting; no return, buy-back or cooling-off period
Practice MCQs 3 questions
How many direct selling entities were issued notices by the CCPA for violating the Consumer Protection (Direct Selling) Rules, as announced on 13 December 2024?
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Correct answer: B — 17
PIB (Consumer Affairs): the CCPA issued notices to 17 entities found violating the Consumer Protection (Direct Selling) Rules, 2021; 13 of them are under investigation.
In which year were the Consumer Protection (Direct Selling) Rules notified by the Government of India?
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Correct answer: C — 2021
PIB (Consumer Affairs): the Government notified the Consumer Protection (Direct Selling) Rules, 2021, establishing a framework to regulate direct selling entities.
Which of the following is NOT among the three major signs, listed by the CCPA in December 2024, that a product is being used to disguise a pyramid scheme?
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Correct answer: D — Products sold only through online platforms
PIB (Consumer Affairs): the three signs listed are a large joining fee or investment, compensation paid for recruiting, and no right of return, buy-back or cooling-off period. Online selling is not one of them.