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(3) to (9) turns to conduct and complaints. A direct selling entity may not adopt any unfair trade practice, must make the declarations the Legal Metrology Act requires, must store sensitive personal data in India, must run a grievance mechanism with an officer who acknowledges complaints within forty-eight working hours, must appoint a nodal officer and must let consumers complain in several ways.
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 not adopt any unfair trade practice (5(3)), must comply with Legal Metrology declarations (5(4)), must store sensitive personal data within India and protect it (5(5)), must have a grievance redressal officer who acknowledges a complaint within forty-eight working hours and normally redresses it within one month (5(6)-(7)), must appoint a nodal officer (5(8)) and must offer a complaint mechanism through offices, branches or direct sellers, in person, by post, telephone, e-mail or website (5(9)).
Entities that need a complaint process built to these timings can use a compliance advisory review.
Rule 5(3): unfair trade practice
"No direct selling entity shall adopt any unfair trade practice in the course of its business or otherwise, and shall abide by the requirements specified in any law for the time being in force." The bar extends to conduct "otherwise" and to every requirement of other laws that applies. For the Act's definition see section 2.
Rule 5(4): Legal Metrology declarations
All products of a direct selling entity "shall comply with the declarations to be made under the Legal Metrology Act, 2009 (1 of 2010)". The rule uses the Act's name as printed. The mandatory declarations are the label details the law requires on packaged goods, and rule 5(2)(h) repeats them for the website; see rule 5(2).
Rule 5(5): sensitive personal data
Every entity "shall store sensitive personal data within the jurisdiction of India, in accordance with the applicable law for the time being in force and shall take appropriate steps to ensure protection of such data provided by a consumer and also ensure adequate safeguards to prevent access or misuse of such data by any unauthorized person". "Sensitive personal data" has the meaning in rule 3(1)(k), by reference to section 43A of the Information Technology Act, 2000 as printed. Which servers hold customer data, and where, is therefore a compliance question for a direct selling entity. Data protection law has developed since the rules were made, and the current law should be checked.
Rule 5(6): the mechanism and the officer
The entity must, "having regard to the number of grievances ordinarily received by such entity from persons in India", establish an adequate grievance redressal mechanism and "appoint one or more grievance redressal officers". It must "display the current and updated name, contact details including telephone number, email address and designation of such officer on its website", and "the details of its website shall also be prominently printed on the product information sheet or pamphlet". The rule allows more than one officer, unlike the E-Commerce Rules.
Rule 5(7): the time limits
Rule 5(7) requires the entity to ensure that the officer "acknowledges the receipt of any consumer complaint within forty-eight working hours of receipt of such complaint and redresses the complaint normally within a period of one month from the date of receipt of the complaint and in case of delay of more than a month, reasons for the delay, and the actions taken on the complaint, are informed to the complainant in writing".
| Step | Period printed in the rule | What follows |
|---|---|---|
| Acknowledge the complaint | Within forty-eight working hours of receipt | None stated |
| Redress the complaint | "Normally" within one month from the date of receipt | If delayed beyond a month, inform the complainant in writing of the reasons for the delay and the actions taken |
Two differences from the E-Commerce Rules stand out. The period is forty-eight "working" hours, and the one-month period is "normally" so, with a written explanation where it is exceeded. Compare rule 4(4)-(7) of the E-Commerce Rules. The rule does not define "working hours".
Rule 5(8): the nodal officer
"Every direct selling entity shall appoint a nodal officer who shall be responsible for ensuring compliance with the provisions of the Act and the rules made thereunder, and to ensure compliance with any order, or requisition, made in accordance with the provisions of any other law for the time being in force or the rules made thereunder." The nodal officer's remit is wider than the grievance officer's: compliance with the Act, the rules and any order or requisition under other laws. The website must carry the nodal officer's details (rule 5(1)(d)).
Rule 5(9): ways to complain
The entity must "establish a mechanism for filing of complaints by consumers through its offices or branches or direct sellers, either in person or through post, telephone, e-mail or website". Complaints can therefore be lodged at an office or branch, or through a direct seller, and by five channels: in person, post, telephone, e-mail or website. A direct seller who receives a complaint cannot refuse it on the ground that it should have gone to head office.
An invented example: Meera buys a skin-care kit from direct seller Anand. The cream causes a rash. She calls the entity's customer care number on Monday morning. The grievance redressal officer must acknowledge within forty-eight working hours, and the entity should normally redress within one month. If the matter takes longer, the entity writes to Meera explaining the delay and the action taken.
A summary of the duties in rule 5(3)-(9)
| Sub-rule | Duty |
|---|---|
| 5(3) | No unfair trade practice; abide by other laws |
| 5(4) | Legal Metrology declarations on all products |
| 5(5) | Sensitive personal data stored in India and protected |
| 5(6) | Adequate grievance mechanism; one or more officers displayed on website |
| 5(7) | Acknowledge in forty-eight working hours; redress normally within one month; written reasons for delay |
| 5(8) | Nodal officer for compliance |
| 5(9) | Complaint mechanism through offices, branches or direct sellers by five channels |
A contravention is dealt with under the Act (rule 13). The rest of rule 5 is in rule 5(10)-(17), including the duty to become a partner in the National Consumer Helpline convergence process. For the website items see rule 5(2). Overview: National Consumer Helpline.
Need help with a direct selling complaint process?
Setting up an officer structure, a complaint log and a data storage position that match rule 5 is easier with a checklist. Our compliance advisory team can prepare one for your entity.
Key takeaways
- No unfair trade practice; Legal Metrology declarations on every product.
- Sensitive personal data must be stored in India and protected.
- Acknowledge within forty-eight working hours; redress normally within one month; explain delays in writing.
- A nodal officer is compulsory; complaints must be possible through offices, branches or direct sellers.
Read next
- Rule 5(2): information on the website
- Rule 5(10)-(17): seller records, consumer requests, advertising and monitoring
- National Consumer Helpline
- Rule 4(4)-(7) of the E-Commerce Rules: grievance officer
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.