Notes - Consumer Protection

17. Consumer Protection

Consumer protection is a very wide term. It includes providing information to the consumers about their rights and responsibilities and helps in getting their grievances redressed. Consumer is treated as the ‘king’ of the market and producers produce goods as per their needs and wants of the consumer.

It is because the earlier approach of ‘caveat emptor’ i.e. ‘let the buyer beware’ has changed to ‘caveat- venditor’ i.e. ‘let the seller beware’. In order to increase their sales, market share and profits, producers may engage in unfair and unscrupulous trade practises. Therefore, consumer protection is necessary. Moreover to generate awareness among masses March 15 of the every year consumer day is celebrated.

17.1 Importance of Consumer Protection

Consumer protection has assumed great importance for consumers as well as businesses in the following ways

17.1.1 From Consumers’ Point of View

The importance of consumer protection from the consumers’ point of view can be understood from the following points

1. Wide Spread Consumer Ignorance about their right and reliefs.
2. Unorganised Consumers Consumers need to be organised in the form of consumer organisations which would take care of their interests. Due to lack of consumer organisations in India, consumer protection becomes necessary to promote and protect the interests of consumers.
3. Widespread Exploitation of Consumers by Businessman.

17.1.2 From Businessmen’s Point of View

A business must also lay emphasis on protecting the consumers and adequately satisfying them. This is important because of the following reasons

1. Business firm should aim at Long-term Profit maximisation through Customer satisfaction.
2. It is the social responsibility of businessman to provide satisfaction to their customers and take care of their interests.
3. It is the moral duty of a businessman to serve their customers well and keep them away from exploitative and unfair trade practices.
4. A business engaging in any form of exploitative trade practices, would invite government intervention and action government.

17.2 Consumer Protection Act (CPA), 1986

The Consumer Protection Act, 1986 seeks to protect and promote the interests of consumers. The act provides safeguards to the consumers against defective goods, deficient services, unfair trade practices and other forms of their exploitation.

The act stresses on setting up of a three tier machinery, consisting of District Forum, State Commission and National Commission. It also provides a framework for the formation of consumer protection councils in every district and state and also at the apex level. It is applicable to all types of undertakings, big or small, private or public, manufacturing or trading and dealing in goods or services.

17.2.1 Consumer Rights

The consumer protection act provides following six rights to consumers to safeguard their interests

1. Right to Safety

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

2. Right to be Informed

A consumer has the right to get true and complete information about the quality, quantity, price, contents, expiry date of the goods and services which he intends to buy.

3. Right to Choose

The consumer have the freedom to choose from a variety of products at competitive prices.

4. Right to be Heard

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

5. Right to Seek Redressal

Thus, the consumer has a right to get relief in case the product or services falls short of his expectation.

6. Right to Consumer Education

• Consumer should have knowledge about the various rights and reliefs provided by the legislations to protect their interest.
• Every consumer has the right to be well informed about his rights, and to spread awareness and education by forming consumer organisations and associations.
• The consumer has a right to acquire knowledge and to be a well-informed consumer throughout his life.

17.2.2 Consumer Responsibilities

A consumer has the following responsibilities,

• Be aware about the various goods and services available in the market, so that he can make a wise and intelligent choice.
• Buy only standardised goods as they provide quality assurance.
• Must learn about the various risks associated with product and services, follow the manufacturer’s instructions carefully and use the product carefully.
• Read the labels carefully, so as to have complete information about the product.
• A consumer must ensure that he gets a fair deal.
• Be honest in his dealings.
• Ask for a cash memo, as it is the proof of purchase.
• File a complaint in case of any shortcoming in goods or services availed.
• Form consumer societies that can take an active part in educating consumers and safeguarding their interests.
• A consumer should respect the environment and avoid creating pollution.

17.2.3 Ways and Means of Consumer Protection

There are various ways, by -which the objective of consumer protection can be achieved

1. Self-regulation by Business

• Enlightened business firms realise that it is in their long-term interest to serve the customers well.
• For this set-up their customer service and grievance cells to redress the problems and grievances of their consumers.

2. Business Association

The association of trade, commerce and business like federation of Indian Chambers of Commerce of India (FCCI) and Confederation of Indian Industries (CII) have laid down their code of conduct which provide guidelines for deding with customers.

3. Consumer Awareness

A consumer, who is well informed about his rights and the reliefs available to him, would be in a position to raise his voice against unfair trade practices or unscrupulous exploitation.

4. Consumer Organisations

They play an important role in educating consumers and can also force business firms to avoid malpractices and exploitation of consumers.

5. Government

The government can protect the interests of the consumers by enacting various legislations.

17.3 Redressal Agencies under the Consumer Protection, Act

For the redressal of consumer grievances, the Consumer Protection Act has set-up a three-tier machinery. These are:

17.4 Reliefs Available

If the consumer court is satisfied about the genuineness of the complaint.

• To remove the defect in goods or deficiency in services.
• To replace the defective product with a new one, free from any defect.
• To refund the price paid for the product or the charges paid for the service.
• To pay a reasonable amount of compensation for any loss of injury suffered.
• To pay punitive damages in appropriate circumstances.
• Not to offer hazardous goods for sale.
• To withdraw the hazardous goods from sale.
• To cease manufacture of hazardous goods and to desist from offering hazardous services.
• To issue corrective advertisement to neutralise the effect of a misleading advertisement.
• To pay adequate costs to the appropriate party.

17.5 Role of/Consumer Organisations and NGOs

Consumer organisations and NGOs perform several functions for the protection and promotion of interest of consumers.

These include are as follow

(i)   Creating awareness about consumer rights by organising training programmes, seminars and workshops.

(ii)   Imparting knowledge about consumer problems, legal reporting and reliefs available by publishing periodicals and publications.

(iii)  Carrying out comparative testing of consumer products and publishing the results for the general benefit.

(iv)  Encourage consumers to take action against any unfair or unscrupulous activity of the seller.

(v)  Providing consumers legal assistance by providing aid, advice etc to seek legal remedy.

(vi)  Filing complaints in appropriate courts on behalf of consumers.

(vii) Taking initiative for filing cases in the interest of general public.