(a) whether the Government has allowed multi-level marketing mechanism to operate
in the country;
(b) if so, the details thereof alongwith the number of Multi Level Marketing (MLM)
companies operating in the country;
(c) whether there are reports of fraud cases and irregularities committed by these
MLM companies;
(d) if so, the details thereof; and
(e) the steps taken/proposed to be taken by the Government to regulate
the workings of MLM companies in the country?
THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (PROF. K. V. THOMAS)
(a) to (d): Direct/Net Work/Multi-Level Marketing companies are operating in the
country. That are required to operate without attracting the extant legal provisions
of the Prize, Chits and Money Circulation Schemes (Banning) Act, 1978. As the Act is
being administered by the States, Multi-Level Marketing companies violating the
provisions of the Act will be proceeded against by the State Governments concerned.
No data is being centrally maintained on the irregularities as the subject matter
relates to States/UTs.
(e) : The Government is of the view that there are adequate provisions for
regulating the sale of goods including their sale by direct method in the Sale of Goods
Act, 1930 and Indian Contracts Act, 1872. The Consumer Protection Act, 1986 further
seeks to promote and protect the rights of consumers.