17 direct selling firms face CCPA notices over alleged 'unfair practices'

Consumer protection regulator CCPA on Friday said it has issued notices to 17 direct selling firms, including Oriflame India, for alleged unfair trade practices and violations of consumer protection rules.

The notices have been served on companies such as Vihaan Direct Selling India, Triptales Pvt Ltd, Oriens Global Marketing, Zennesa Wellness, and others for alleged service deficiencies and non-compliance with the Consumer Protection (Direct Selling) Rules, 2021.

An official statement revealed that 13 of these cases are under investigation, while replies from three companies are still awaited.

The action comes in response to concerns about deceptive practices in the direct selling industry. The ministry warned that some fraudulent entities are misusing the direct selling model to promote illegal pyramid or money circulation schemes.

These companies often make unrealistic promises of high commissions, foreign trips, and entrepreneurship opportunities contingent on recruiting others.

"The government remains steadfast in its mission to create a fair, transparent, and consumer-friendly market ecosystem," the statement said.

Consumers have been advised to exercise caution by checking disclosures carefully, avoiding recruitment-based earnings, understanding return and refund policies, reading contracts thoroughly and verifying direct sellers' credentials.

The Consumer Protection (Direct Selling) Rules, 2021, were introduced to regulate direct selling entities and protect consumer interests.

These rules complement other existing regulatory frameworks, including the Consumer Protection (E-Commerce) Rules, 2020, and the Legal Metrology (Packaged Commodities) Rules, 2011.

The consumer affairs ministry warned that such fraudulent practices violate consumer trust and expose individuals to potential financial risks.

The complete list of companies served notices includes Oriflame India, Vihaan Direct Selling India, Triptales Pvt Ltd, Oriens Global Marketing, Zennesa Wellness, Orgolife Solutions, Juncture Marketing, Wolte Marketing, Preet Life Care, Enroots Horizon, E biotorium Network, Meghdoot Marketing, Suii Dhaaga Lifestyle, Winmarg Business, Ayusratna Natural Herbal, Biothon Lifecare, and Okflip India Pvt Ltd.