Thursday, 27 October 2011

Kerala Govt sets guidelines for direct selling

The following guidelines were set by the Kerala State Government to regulate sale of goods and services outside of retail establishments known as 'direct selling' and to provide for protection of the consumers who purchase goods and services from direct sellers.
These guidelines will remain in force till an appropriate legislation is enacted for the said purpose.

1. Direct selling
Direct selling means marketing of consumer products/services directly to the consumers generally in their homes or homes of others, at their work place and other places away from the permanent retail locations, usually through explanation or demonstration of the products by a direct seller or by mail order sales.
2. Direct selling Entity:
Direct selling Entity means a business entity which sells or markets products with its trademark or services mark or nay other identifying mark through a direct selling individual or organisation .
3. Direct seller
Direct seller means a person who is a member of a distribution system of the direct selling entity engaged in direct selling.
4. Mail order sales
Mail order sales means sale of goods and services which a person conducts either by himself or through any person authorised by him, by receiving an offer for a sale contract by mail.
5. Pyramid schemes/money change scheme is a scheme ;or arrangement which also includes any money circulation scheme as defined within the meaning of the Section 2 (c) and 2 (e) of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978, involving sale of goods and services, where a person for a consideration acquires the opportunity to receive a pecuniary benefit which is not dependent on the volume of goods or services sold or distributed but is based wholly or partly upon the inducement of additional persons to participate in such a scheme or arrangement.
6. Consumer
Consumer means any person who buys or agrees to buy goods from a direct seller for a consideration.
I. Conditions for a valid direct selling
The following conditions are to be complied with by the Direct Selling entities and Direct Sellers.
a) The Direct Selling Entity should be a legal entity authorised to conduct business in India and which files all returns as mandated by law.
b) The direct selling entity should be a valid licensee or a permitted user of a registered trademark which identifies the promoter, goods or services distributed.
c) The Direct selling entities should main websites with complete details of their products/services, terms and conditions, price, details of direct sellers and all relevant information about the company and business. The websites shall be updated regularly and shall furnish all necessary information required by the District Industries Centre.
d) The Direct Selling Entity shall not require a direct seller to purchase any product or collect any membership fee as a condition precedent for enrollment.
e) The compensation to direct sellers shall  only be based on the quantum of sale of goods and servcies.
f) The Direct selling entity should ensure that a consumer purchasing goods or services from a direct seller shall have at leat thirty days from the date of delivery of such goods and services to return the same and to receive full refund.
g) A Direct selling entity shall require direct sellers to provide the following information to the consumers at the time of the sale.
    i. Name, address and telephone number of the direct seller and direct selling entity.
    ii. The direct selling entity shall display details of their direct sellers on their websites.
    iii The Direct seller entity/Direct sellers or their representatives shall at all times carry identity proof of their      
       respective companies along with any photo IDs issued by any Government agency.
   iv A description of the goods or services to be suplied.
   v The order date, the total amount to be paid by the consumer along with the bill and receipt
   vi Time and place for inspec;tio ofthe sample and delivery of goods.
   vii A notice to the consumer of the consumer's rights to cancel the order and to receive a full refund
      of sums paid.
   viii Details regarding the complaint redressal mechanism of the Direct Selling entity.
h) The Direct sellers/Direct selling entities who call at any premises of the customers for the purpose of negotiating direct sales shall take prior permission of appointment immediately indicate the purpose of the visit before entering the premises, identity himself/herself with credentials and shall leave the premises at the request of the occupier of the premises or any person acting with the actual or implied authority of the occupier.
II The sale activities not following the above guidelines shall not be considered as Direct selling and would be dealt appropriately under relevant provisions.