Consumer Protection

 

12. Consumer Protection

 

INTRODUCTION

This chapter explains the concept and importance of consumer protection, their rights and responsibilities, including their rights to file a complaint. It includes the information on redressal machinery and the remedies available.

 

Chapter at a Glance

 

CONCEPT

(i) Consumer Protection refers to the laws designed to ensure the rights of consumers as well as fair trade, so as to protect the consumers against the unscrupulous, exploitative and unfair trade practices of manufacturers and service providers.

(ii) A consumer is said to be a king in a free market economy.

(iii) The earlier approach of caveat emptor, which means “Let .the buyer beware”, has now been changed to caveat venditor (“Let the seller beware”) because of government legislations on consumer protection, consumer awareness and intense competition.

(iv) Consumers need to be protected —

(a) Against products which are injurious to health

(b) Against deceptive, unfair trade practices like adulteration, using false weights and measures, making exaggerated claims about the quality of their products or services, etc.

(c) Against the monopolies and restrictive trade practices

(v) Consumer education is a prerequisite to the success of consumer protection.

The consumers are either not aware of their rights or do not know how to exercise them.

(vi) Consumers may be educated through newspapers, magazines, radio, television, group meetings and discussions. Consumers should be educated on the following matters:

(a) What are their rights as consumers?

(b) What are the government laws and regulations regarding consumer protection?

(c) What government authorities and organisations exist to register consumers’ grievances and take proper action?

(d) What are the quality marks (such as ISI mark and Agmark) which certify the standard of quality of a product?

(e) What is the necessity of seeking information about the genuineness of the quantity, quality and price of products?

 

IMPORTANCE OF CONSUMER PROTECTION

Consumer Protection has a wide agenda. It not only includes educating consumers about their rights and responsibilities, but also helps in getting their grievances redressed. The importance of consumer protection are:

 

From Consumer Point of View

(i) Consumer Ignorance: Due to ignorance of consumers about (a) their rights and reliefs available to them (b) how to exercise these rights (c) how to seek reliefs, it becomes necessary to educate them about the same so as to achieve consumer awareness.

(ii) Unorganised consumers:

(a) Consumers need to be organised in the form of consumer organisations which would take care of their interests.

(b) Adequate protection is required to be given to consumers till the consumers organisations become powerful enough to protect and promote the interests of consumers.

(iii) Widespread Exploitation of consumers: Consumers might be exploited by unfair trade practices. Consumers need protection against unfair trade practices of the sellers like:

(a) Defective and unsafe products     

(b) Charging over Maximum Retail Price

(c) Adulteration                     

(d) Misleading Advertisements

(e) False weights and measures

(f) Incomplete information on packaged goods etc.

 

From the Point of View of the Business

(i) Long term interest of business:

(a) It is in the long-term interest of business to satisfy their customers.

(b) Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer-base of business.

(c) Thus, business firms should aim at long-term profit maximisation through customer satisfaction.

(ii) Business uses society’s resource:

(a) Business makes use of various resources, which are supplied by society.

(b) Businessmen are not the owners but merely the trustees of such resources.

(c) Thus, they should supply such products and render such services which are in public interest and would not impair public confidence in them.

 

(iii) Social responsibility:

(a) A business has social responsibilities towards various stakeholders like investors, consumers, employees, government.

(b) Since Business organizations make money by selling goods and providing services to consumers, consumers form an important group among the many stakeholders of business. Thus, like other stakeholders, consumers interest be well taken care of.

 

(iv) Moral justification:

(a) A business has the moral duty to take care of consumer’s interest and avoid any form of their exploitation.

(b) Thus, a business must avoid unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black marketing etc.

 

(iv) Government Intervention: To avoid government intervention or action, business organisations should voluntarily resort to such fair trade practices where the customers’ needs and interests will well be taken care of.

 

THE CONSUMER PROTECTION ACT (CPA), 1986

(i) Consumer Protection Act (CPA), 1986 seeks to protect and promote the consumer’s interest through speedy and inexpensive redressed of their grievances.

(ii) The scope of the Act is very wide. It is applicable to all types of undertakings, big and small, whether in the private or public sector, or in the co-operative sector, whether a manufacturer or a trader, and whether supplying goods or providing services.

(iii) The Act confers certain rights to consumers with a view to empowering them and to protect their interests.

 

CONSUMER RIGHTS

The Consumer Protection Act provides six rights to consumers. These are:

1. Right to Safety:

(a) The consumer has a right to be protected against goods and services which are hazardous to life and health.

(b) For instance, electrical appliances which are manufactured with substandard products or do not confirm to the safety norms might cause serious injury.

(c) Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications.

 

2. Right to be Informed:

(a) The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, directions for use, etc.

(b) It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product.

 

3. Right to Choose:

(a) The consumer has the freedom to choose from a variety of products at competitive prices.

(b) This implies that the marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc. and allow the consumer to make a choice from amongst these.

 

4. Right to be Heard:

(a) The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service.

(b) It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells.

(c) Many consumer organisations are also working towards this direction and helping consumers in redressal of their grievances.

 

5. Right to seek Redressal:

(a) The consumer has a right to get relief in case the product or service falls short of his expectations.

(b) The Consumer Protection Act provides a number of reliefs to the consumers including replacement of the product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.

 

6. Right to Consumer Education:

(a) The consumer has a right to acquire knowledge and to be a well-informed consumer throughout life. He should be aware about his rights and the reliefs available to him in case of a product or service falling short of his expectations.

(b) Many consumer organisations and some enlightened businesses are taking an active part in educating consumers in this respect.

(c) The Consumer Protection Act by conferring these rights on the consumers empowers them to fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers.

 

CONSUMER

A ‘consumer’ is generally understood as a person who uses or consumes goods or avails of any service. Under the Consumer Protection Act, a consumer is denned as:

(a) Any person who buys any goods for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment. It includes any user of such goods, when such use is made with the approval of the buyer, but does not include a person who obtains goods for re-sale or any commercial purpose.

(b) Any person who hires or avails of any service, for a consideration which has been paid or promised, or partly paid and partly promised, or under any system of deferred payment. It includes any beneficiary of services when such services are availed of with the approval of the person concerned, but does not include a person who avails of such services for any commercial purpose.

 

Consumer Responsibilities

A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services.

1. Knowledge about available goods and services: A consumer should be aware about various goods and services available in the market so that an intelligent and wise choice can be made.

 

2. Purchase of Standarized Products: A consumer should buy only standardized goods because they provide quality assurance.

Thus, he should look for ISI mark on electrical goods. FPO mark on food products, Hallmark on jewellery etc.

 

3. Use of Product as per Instructions: A consumer should follow manufacturer’s instructions and use the products safely, so as to avoid any risk.

 

4. Check information on label: A consumer should read labels carefully so as to have information about prices, net weight, date of manufacturing and date of expiry (particularly in case of medicines and edible items).

 

5. Fair Deal: Assert yourself to ensure that you get a fair deal by comparing the features and prices of similar products services.

 

6. Authorized Dealers: A consumer should buy goods from authorised dealers and choose only from legal goods and services and discourage unscrupulous practices like black marketing, hoarding etc.

 

7. Insist on Cash Memo: A consumer should ask for a cash memo on purchase of goods or services. It would serve as a proof of the purchase made.

 

8. File a Complaint: A consumer should file a complaint in an appropriate consumer forum in case of a defective goods or deficient services.

 

9. Form Consumer Organisations: A consumer should form consumer societies which would play an active part in educating consumers and safeguarding their interests.

 

10. Respect the environment: A consumer should avoid waste, littering and contributing to pollution.

 

WHO CAN FILE A COMPLAINT?

A complaint before the appropriate consumer forum can be made by:

(i) Any consumer;

(ii) Any registered consumers’ association;

(iii) The Central Government or any State Government;

(iv) One or more consumers, on behalf of numerous consumers having the same interest; and

(v) A legal heir or representative of a deceased consumer.

 

 

RELIEF (REMEDIES) AVAILABLE TO CONSUMERS

If the Consumer court is satisfied about the genuineness of the complaint, it can issue one or more of the following directions to the opposite party.

(i) To remove the defect in goods or deficiency in service.

(ii) To replace the defective product with a new one, free from any defect.

(iii) To refund the price paid for the product, or the charges paid for the service.

(iv) To pay a reasonable amount of compensation for any loss or injury suffered by the consumer due to the negligence of the opposite party.

(v) To pay punitive damages in appropriate circumstances.

(vi) To discontinue the unfair/restrictive trade practice and not to repeat it in the future.

(vii) Not to offer hazardous goods for sale.

(viii) To withdraw the hazardous goods from sale.

(ix) To cease manufacture of hazardous goods and to desist from offering hazardous services.

(x) To pay any amount (not less than 5% of the value of the defective goods or deficient services provided), to be credited to the Consumer Welfare Fund or any other organisation/ person, to be utilised in the prescribed manner.

(xi) To issue corrective advertisement to neutralise the effect of a misleading advertisement.

(xii) To pay adequate costs to the appropriate party.

 

REDRESSAL AGENCIES UNDER THE CONSUMER PROTECTION ACT

For the redressal of consumer grievances, the Consumer Protection Act provides for setting up of a three tier enforcement machinery at the District, State, and the National levels, known as the:

(i) District Consumer Dispute Redressal Forum (briefly referred to as the ‘District Forum’)

(ii) State Consumer Disputes Redressal Commission, (‘State Commission’)

(iii) National Consumer Disputes Redressal Commission. (‘National Commission’),

 

The grievances are redressed by the three-tier machinery under consumer protection Act:

 

 

1. District Forum:

(a) The District Forum consists of a President and two other members, one of whom should be a woman. They all are appointed by the State Government concerned.

(b) A complaint can to be made to the appropriate District Forum when the value of the goods or services in question, along with the compensation claimed, does not exceed ` 20 lakhs.

(c) On receiving the complaint, the District Forum shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a sample there of, shall be sent for testing in a laboratory.

(d) The District Forum shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed.

(e) In case the aggrieved party is not satisfied with the order of the District Forum, he can appeal before the State Commission within 30 days of the passing of the order.

 

2. State Commission:

(a) Each State Commission consists of a President and not less than two other members, one of whom should be a woman. They are appointed by the State Government concerned.

(b) A complaint can to be made to the appropriate State Commission when the value of the goods or services in question, along with the compensation claimed, exceeds ` 20 lakhs but does not exceed ` 1 crore. The appeals against the orders of a District Forum can also be filed before the State Commission.

(c) On receiving the complaint, the State Commission shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a sample thereof, shall be sent for testing in a laboratory.

(d) The State Commission shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed.

(e) In case the aggrieved party is not satisfied with the order of the State Commission, he can appeal before the National Commission within 30 days of the passing of the order.

 

3. National Commission:

(a) The National Commission consists of a President and at least four other members, one of whom should be a woman. They are appointed by the Central Government.

(b) A complaint can to be made to the National Commission when the value of the goods or services in question, along with the compensation claimed, exceeds ` 1 crore.

(c) The appeals against the orders of a State Commission can also be filed before the National Commission. On receiving the complaint, the National Commission shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a sample there of, shall be sent for testing in a laboratory.

(d) The National Commission shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed.

(e) An order passed by the National Commission in a matter of its original jurisdiction is appealable before the Supreme Court. This means that only those appeals where the value of goods and services in question, along with the compensation claimed, exceeded ` 1 crore and where the aggrieved party was not satisfied with the order of the National Commission, can be taken to the Supreme Court of India.

(f) Moreover, in a case decided by the District Forum, the appeal can be filed before the State Commission and, thereafter, the order of the State Commission can be challenged before the National Commission and no further.

 

ROLE OF CONSUMER ORGANISATION AND NGO’S

In India, several consumer organisations and non-governmental organisations (NGOs) have been set up for the protection and promotion of consumer’s interests. They perform the various functions as explained below:

(i) Educating the general public about consumer rights by organising training programmes, seminars and workshops.

(ii) Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available and other matters of interest.

(iii) Providing legal assistance to consumers by way of providing aid, legal advice, etc.

(iv) Filling complaints in appropriate consumer courts on behalf of the consumers.

(v) Taking an initiative in filling cases in consumer courts in the interests of the general public, not for any individual.

(vi) Encouraging consumers to strongly protest and take an action against unscrupulous, exploitative and unfair trade practices.

(vii) Carrying out comparative testing of consumer products in accredited laboratories to test relative qualities of competing brands and publishing the test results for the benefit of consumers.

 

Important Consumer Organisations and Ngo

(i) Consumer Coordination Council, Delhi

(ii) Common Cause, Delhi

(iii) Voluntary Organisation in Interest of Consumer Education (VOICE), Delhi

(iv) Consumer Education and Research Centre (CERC), Ahmedabad

(v) Consumer Protection Council (CPC), Ahmedabad

(vi) Consumer Guidance Society of India (CGSI), Mumbai

(vii) Mumbai Grahak Panchayat, Mumbai

(viii) Karnataka Consumer Service Society, Bangalore

(ix) Consumers’ Association, Kolkata

(x) Consumer Unity and Trust Society (CUTS), Jaipur

 

Words that Matter

 

1.    Consumer protection: Consumer protection refers to the laws designed to ensure the rights of consumers as well as fair trade, to protect the consumers against the unscrupulous, exploitative and unfair trade practices of manufacturers and service providers.

 

2.    Consumer Protection Act (CPA), 1986: Consumer Protection Act (CPA), 1986 seeks to protect and promote the consumer’s interest through speedy and inexpensive redressal of their grievances.

 

3.    Consumer: A ‘consumer’ is generally understood as a person who uses or consumes goods or avails of any service.

 

4.    District Forum: District Forum consists of a President and two other members, one of whom should be a woman. They all are appointed by the State Government.

 

5.    State Commission: Each State Commission consists of a President and not less than two other members, one of whom should be a woman. They are appointed by the State Government.

 

6.    National Commission: National Commission consists of a President and at least four other members, one of whom should be a woman. They are appointed by the Central Government.