The scheme shall NOT be
regarded as a Pyramid Scheme, wherein the direct selling entity formulates a
scheme for the multi-layered network of subscribers, where existing subscribers may
enroll one or more subscribers in order to receive, direct or indirect,
benefits as a result of the sale of goods or services by subscribers and the scheme
complies with the following terms and conditions:
i.
It does not
impose a condition on a direct seller that he will receive remuneration or
incentives ONLY on recruitment/ enrolment of new participants/ subscribers.
ii.
It does not
require a participant/ subscriber to purchase goods or services for an amount
or quantity that exceeds expected sale, consumption, resale of goods or sale of
services to the consumers within a stipulated time.
iii.
It does not
require a participant/ subscriber to pay any entry/ registration fee, cost of
demonstration equipment and materials or other fees related to participation.
iv.
It shall
execute a written contract with direct sellers describing the material terms
and conditions of their relationship.
v.
It allows a
reasonable cooling-off period to the direct sellers to decide on participation
indirect selling activities or cancel the participation and receive a refund of
consideration, as paid, for engaging in direct selling activities.
vi.
It allows or
provides for a buy-back or has repurchase policy for buying/ re-purchasing the
presently marketable goods or services, sold to the participants/ subscribers,
at the request of the participants/ subscribers, on fair and reasonable terms
and conditions.
vii.
It establishes
a grievance redressal mechanism for protection of the interest of the
consumers.
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