Rule 5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 5(10) to (17) closes rule 5 with eight duties that mostly concern what the entity knows about its direct sellers and how it speaks to consumers: records of sellers, information on request, advertising consistent with the product, no fake reviews, liability for authenticity, monitoring, a public list of delisted sellers and partnership in the National Consumer Helpline convergence process.
This article takes the rules as amended up to G.S.R. 454(E) dated 21 June 2023, which changed rule 3 only. Later amendments should be checked on the website of the Department of Consumer Affairs.
A direct selling entity must keep a record of all its direct sellers with identity and address proof, give consumers seller details on written request after a purchase, keep advertisements consistent with the actual characteristics of goods and services, never pose as a consumer to post reviews, bear liability if it vouches for authenticity, monitor its direct sellers through a legally binding contract, publish a list of delisted direct sellers on its website and become a partner in the National Consumer Helpline convergence process.
A network that wants its seller records and contracts checked can use a compliance advisory review.
The eight duties, sub-rule by sub-rule
| Sub-rule | Duty |
|---|---|
| (10) | Maintain a record of all direct sellers: identity proof, address proof, e-mail and other contact information |
| (11) | On a written request by a consumer after purchase, give the name, address, e-mail, contact number and any other information needed to communicate with the direct seller for effective dispute resolution |
| (12) | Advertisements for marketing must be consistent with the actual characteristics, access and usage conditions |
| (13) | No directly or indirectly posing as a consumer to post reviews about its goods or services or misrepresent quality or features |
| (14) | Bear the liability in any action related to authenticity where it explicitly or implicitly vouches for it |
| (15) | Monitor direct sellers' practices and ensure compliance by a legally binding contract, whatever the distribution system |
| (16) | Maintain a record of delisted direct sellers and share the list publicly on its website |
| (17) | Become a partner in the convergence process of the National Consumer Helpline of the Central Government |
Rule 5(10) and (11): records and requests
Sub-rule (10) asks for "a record of all its direct sellers, including their identity proof, address proof, e-mail and such other contact information". This repeats the register in rule 4(h) and the verification duty in rule 5(1)(i).
Sub-rule (11) works only on request: "on the request in writing made by a consumer after the purchase". The entity must then give "the name, address, e-mail, contact number and any other information which is necessary for making communication with such direct seller for effective dispute resolution". The same pattern appears in the E-Commerce Rules, where a marketplace gives post-purchase seller details; see rule 5(3). The rule prints no period for answering the request.
Rule 5(12) and (13): advertising and reviews
Sub-rule (12) says advertisements "are consistent with the actual characteristics, access and usage conditions of such goods or services". An advertisement that shows a result the product cannot deliver breaks it.
Sub-rule (13) says no entity shall "directly or indirectly, falsely represent itself as a consumer and post reviews about its goods or services or misrepresent the quality or features of any of its goods or services". The words "directly or indirectly" mean a review posted through a relative, an employee or an agent is covered. The same bar applies to e-commerce sellers; see rule 6(1)-(3) of the E-Commerce Rules.
Rule 5(14): authenticity
A direct selling entity which "explicitly or implicitly vouches for the authenticity of the goods or services sold, or guarantees that such goods or services are authentic, shall bear the liability in any action related to the authenticity of such goods or services". The same idea appears for inventory entities in rule 7(5) of the E-Commerce Rules. The words "explicitly or implicitly" make a product claim such as "genuine, original" enough to bring the liability.
Rule 5(15) and (16): monitoring and delisting
Sub-rule (15): "Notwithstanding the distribution system adopted by it, a direct selling entity shall monitor the practices adopted by its direct sellers and ensure compliance with these rules by means of legally binding contract with such direct sellers." However the network is organised, the entity cannot say it does not control what its sellers do. The monitoring is done through the contract, so the written contract in rule 5(1)(h) needs to carry the compliance terms. A review can check that a seller contract does so.
Sub-rule (16) requires a record of "all direct sellers who have been delisted by the direct selling entity", and the list "shall be publicly shared on its website". The rule does not say for how long a name stays on the list or what reasons justify delisting.
An invented example: Brightpath Wellness delists a seller, Vikram, for misleading customers about a supplement's effects. Under sub-rule (16) the entity must record the delisting and share the list on its website. Sub-rule (15) required it to have a contract that allowed it to act on that kind of conduct.
Rule 5(17): the National Consumer Helpline
"Every direct selling entity shall become a partner in the convergence process of the National Consumer Helpline of the Central Government." The words are a direct duty. This differs from the E-Commerce Rules, which today ask entities to endeavour to become a partner and from 1 January 2027 say "shall become a partner"; see rule 4(4)-(7) of the E-Commerce Rules. Nothing is stated in the rule about how convergence works.
How the duties fit with the rest of rule 5
Rule 5(1) deals with set-up and contracts (rule 5(1)), rule 5(2) with the website (rule 5(2)) and rule 5(3)-(9) with grievance handling (rule 5(3)-(9)). The direct seller's own duties follow in rule 6. A contravention is dealt with under the Act (rule 13).
Need help with direct seller monitoring?
If you run a direct selling network and need seller records, contracts and a delisting process that match rule 5, our compliance advisory team can help you put them in order.
Key takeaways
- Keep a record of all direct sellers, with identity and address proof.
- Give seller details on a consumer's written request after purchase.
- Advertise consistently with real characteristics; never post fake reviews.
- Bear liability if you vouch for authenticity.
- Monitor sellers through a legally binding contract; publish the delisted list on the website.
- Become a partner in the National Consumer Helpline convergence process.
Read next
- Rule 5(3)-(9): declarations, data, grievance officer and complaints
- Rule 6: obligations of a direct seller
- Rule 6(1)-(3) of the E-Commerce Rules: seller duties and fake reviews
- Section 94: unfair trade practices in e-commerce and direct selling
Disclaimer: Based on the rules, regulations and guidelines named above as published in the Gazette of India or on the CCPA website, with the amending notifications the article names (consulted on 3 October 2026). Later amendments, the Consumer Protection Act, 2019 provisions referred to, State rules and CCPA advisories should be checked. This article is general information, not legal advice; check the official text before acting.