Frequently Asked Questions

Key legal red flags include: 1) Absence of clear IP/Trademark registration ownership details, 2) Hidden operational or inventory markup fees not disclosed upfront, 3) One-sided unilateral termination clauses without refund provisions, 4) Unrealistic revenue/ROI guarantees without audited financial proof, and 5) Vague exclusive territory boundaries.

Under India Consumer Protection (Direct Selling) Rules 2021: 1) Companies must be incorporated under Indian law and have a physical registered office in India, 2) Joining or recruitment fees are strictly illegal, 3) 100% of commissions must stem from genuine retail product sales, 4) Mandatory 30-day product buyback/cooling-off period must be provided, and 5) Companies must appoint a Nodal Compliance Officer.

Under the Advertising Standards Council of India (ASCI) Code and Central Consumer Protection Authority (CCPA) Guidelines 2022: 1) All paid promotions, material connections, or free gifts must carry prominent disclosures (e.g. #Ad, #Sponsored, #PaidPartnership), 2) Financial influencers (Finfluencers) promoting investment products must be SEBI-registered Research Analysts or Investment Advisers, and 3) Misleading claims, fake reviews, and dark patterns are subject to heavy penalties under the Consumer Protection Act 2019.

Warning signs of fake trading platforms: 1) Unregistered domain names created recently (check WHOIS lookup), 2) Payments requested via personal UPI, individual bank accounts, or unverified crypto wallets, 3) Fake regulatory certificates claiming SEBI/RBI approvals that cannot be found on official government registers, 4) Artificial trading dashboards showing guaranteed profits, and 5) Demands for "withdrawal tax" or "clearance fees" before letting you withdraw your funds.

If you suspect fraud, immediately preserve: 1) Full email headers and digital correspondence, 2) Complete web URL links, domain WHOIS records, and full-page screenshots, 3) Bank transaction receipts, UPI transaction IDs, and account numbers, 4) Copies of signed agreements, brochures, or promotional social media posts, and 5) File an official complaint on the Cyber Crime Portal (cybercrime.gov.in) or SCORES (SEBI Complaints Redress System).