The Indian Direct Selling Association (IDSA), smarting under the recent arrests of the top brass of Amway — a key member of IDSA, has urged the Union Government to come up with a new law for the regulation of the direct selling industry.
At a press conference here on Monday, Chavi Hemanth, Secretary-General of IDSA, asked the Government to properly define the direct selling industry and exclude it from the ambit of the Prize Chits and Money Circulation (Banning) Act, apart from enacting a law exclusively for it. Hemanth said a ‘clear policy framework’ was necessary for removing the operational ambiguities around the direct selling industry. She said there was huge confusion among the public and the authorities between the financial pyramid schemes and the direct selling business. While the pyramid schemes were illegal and attracted the provisions of PCMC(B) Act, she said, the direct selling business was not. She claimed that since this relatively new business model arrived in India decades after the 1978 Act, it was not anticipated by the Act.
Since there was no clear regulatory environment for the direct selling business, certain functional aspects were being covered by existing general laws, thus leading to several complexities. The current ambiguities were being exploited by “unscrupulous elements operating under the garb of direct selling business.”
Last week, Amway India’s CEO William Scott Pinckney and two directors were arrested by the Kerala police on a court warrant. The warrant had been issued on several complaints of cheating against the company by distributors and consumers of Amway products. The three were booked under the PCMC(B) Act.