Introduction to Consumer Protection

Each one of us is a consumer. In our daily lives, we purchase and use a wide variety of goods and services. Therefore, it is important for us to be aware and informed consumers. In the modern marketplace, which is flooded with a vast array of products and services, the consumer can be vulnerable to exploitation. With growing competition and a constant drive to increase sales and market share, manufacturers, sellers, and service providers may be tempted to engage in unscrupulous, exploitative, and unfair trade practices.

These malpractices can include selling defective and unsafe products, adulteration of food items, publishing false and misleading advertisements, hoarding of essential goods to create artificial scarcity, and black-marketing. Such practices can expose consumers to significant risks, including physical harm from unsafe products, adverse health effects from adulterated food, and financial loss from being cheated by misleading claims or overpricing.

Shift in Market Philosophy

Historically, the market operated on the principle of caveat emptor, a Latin phrase meaning "Let the buyer beware." This approach placed the responsibility on the buyer to assess the quality and suitability of a product before purchasing it. However, with the rise of complex products, global markets, and aggressive advertising, this philosophy has become outdated.

The market has now shifted towards the principle of caveat venditor, which means "Let the seller beware." In this modern approach, a consumer is considered the "King" of the free market economy, and the responsibility for product quality and safety lies with the seller. This shift underscores the importance of consumer protection, which is significant for both consumers and businesses alike. In India, the Consumer Protection Act, 2019, which has replaced the earlier Act of 1986, is the key piece of legislation that provides legal protection to safeguard the interests of consumers.

Importance of Consumer Protection

The concept of consumer protection is to safeguard the interests of consumers. It involves adopting measures to protect consumers from unethical malpractices by businesses and to provide a swift and effective redressal of their grievances. Consumer protection is a vital concept that holds importance for both consumers and businesses.

From the Consumers’ Point of View

The importance of consumer protection from the consumers’ perspective can be understood from the following points:

• Consumer Ignorance: In the light of the widespread ignorance of consumers about their rights and the reliefs available to them, it becomes necessary to educate them about their rights to achieve consumer awareness. Many consumers are not aware that they can seek legal remedy for their grievances.

• Unorganised Consumers: In general, consumers in India are unorganised. While manufacturers and traders are organised and powerful, consumers are not. Therefore, consumers need to be organised in the form of consumer organisations that can take care of their interests. Adequate legal protection is required until these organisations become powerful enough to protect and promote the interests of all consumers effectively.

• Widespread Exploitation of Consumers: Consumers might be exploited by a wide range of unscrupulous, exploitative, and unfair trade practices. These include the sale of defective and unsafe products, adulteration, false and misleading advertising, hoarding, and black-marketing. Consumers need strong legal protection against such malpractices of sellers to ensure their safety and well-being.

From the Point of View of Business

A business must also lay emphasis on protecting consumers and ensuring their satisfaction. This is not just a moral obligation but also a sound business strategy. This is important for the following reasons:

• Long-term Interest of Business: Enlightened and successful businesses realise that it is in their own long-term interest to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide positive feedback and word-of-mouth recommendations to prospective customers. This helps in increasing the customer base and building a strong brand reputation. Thus, businesses should aim for long-term profit maximisation through customer satisfaction.

• Business uses Society’s Resources: Business organisations use resources (like land, water, raw materials, and human capital) which belong to society. They, thus, have a responsibility to supply such products and render such services that are in the public interest and would not impair public confidence in them.

• Social Responsibility: A business has social responsibilities towards various interest groups, and consumers are one of the most important stakeholders. Business organisations make money by selling goods and providing services to consumers. Therefore, the interest of consumers has to be well taken care of.

• Moral Justification: It is the moral and ethical duty of any business to take care of consumers’ interests and to avoid any form of their exploitation. A business must avoid all unscrupulous, exploitative, and unfair trade practices like the sale of defective and unsafe products, adulteration, and misleading advertising.

• Government Intervention: A business that engages in exploitative trade practices would invite government intervention or legal action. This can impair and tarnish the image of the company and can be a cumbersome and costly affair. Thus, it is advisable that business organisations voluntarily resort to practices where the customers’ needs and interests are well taken care of.

The Consumer Protection Act, 2019

The Consumer Protection Act, 2019, is a comprehensive piece of legislation that seeks to protect and promote the interests of consumers through the speedy and inexpensive redressal of their grievances. It extends to the whole of India and is applicable to all types of businesses, whether it is a manufacturer or a trader, and whether they are supplying goods or providing services. Significantly, its scope has been widened to include e-commerce firms and online transactions.

Who is a Consumer?

Under the Consumer Protection Act, 2019, a consumer is defined as a person who buys any goods or avails of any services for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment. The definition is inclusive and also covers:

• Any user of such goods (other than the person who buys them) if such use is made with the approval of the buyer.

• Any beneficiary of such services (other than the person who avails of them) if such services are availed of with the approval of the first-mentioned person.

The Act applies to both offline and online transactions, including those made through electronic means, teleshopping, direct selling, or multi-level marketing.

However, it is important to note that any person who obtains goods or avails of services for resale or for any commercial purpose is not treated as a consumer and is therefore outside the scope of the Consumer Protection Act, 2019.

Consumer Rights

The Consumer Protection Act, 2019, is a landmark legislation that provides for six fundamental rights for consumers. These rights are designed to empower consumers and to protect their interests against the malpractices of sellers.

1. Right to Safety

The consumer has a right to be protected against goods and services which are hazardous to their life, health, and property. This right is particularly important for products that can pose a safety risk, such as electrical appliances, pressure cookers, automobiles, and medicines. For example, electrical appliances that are manufactured with substandard products or do not conform to safety norms might cause serious injury or even death. Thus, consumers are educated that they should use electrical appliances which are ISI marked, as this would be an assurance that such products meet the required quality and safety specifications.

2. Right to be Informed

The consumer has a right to have complete and accurate information about the product they intend to buy. This includes information about its ingredients, date of manufacture, price (Maximum Retail Price - MRP), quantity, directions for use, and any potential side effects. It is because of this right that the legal framework in India requires manufacturers to provide all such essential information on the package and label of their products, enabling the consumer to make an informed choice.

3. Right to be Assured (Right to Choose)

The consumer has the freedom to access a variety of products at competitive prices. This right implies that the marketers should offer a wide variety of products to consumers in terms of quality, brand, price, and size, and that they should not use monopolistic or restrictive trade practices to limit the consumer's choice. The consumer should be free to make a choice from amongst these available options.

4. Right to be Heard

The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. This means that the consumer's interests will receive due consideration at appropriate forums. It is because of this right that many enlightened business firms have set up their own customer service and grievance cells. Many consumer organisations are also working in this direction and helping consumers in the redressal of their grievances.

5. Right to Seek Redressal

The consumer has a right to get relief against any unfair trade practice, restrictive trade practice, or unscrupulous exploitation if the product or a service falls short of their expectations. The Consumer Protection Act, 2019, provides for a number of redressals to consumers, which include the replacement of the product, the removal of the defect in the product, or compensation to be paid for any loss or injury suffered by the consumer.

6. Right to Consumer Education

The consumer has a right to acquire the necessary knowledge and skills to be a well-informed consumer throughout their life. They should be made aware of their rights and the reliefs that are available to them in case a product or a service falls short of their expectations. Many consumer organisations and some enlightened businesses are taking an active part in educating consumers in this respect through various campaigns and publications.

Consumer Responsibilities

The Consumer Protection Act empowers consumers to fight against unscrupulous, exploitative, and unfair trade practices. However, consumer rights, by themselves, cannot be effective in achieving the objective of consumer protection. The protection of consumers' interests can be achieved in a true sense only when the consumers themselves are aware of and are willing to exercise their responsibilities. An aware and responsible consumer is the best form of consumer protection.

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

• Be Aware and Make Informed Choices: A consumer should be aware of the various goods and services available in the market so that they can make an intelligent and wise choice based on their needs, preferences, and budget.

• Buy Standardised Goods: Consumers should insist on buying only standardised goods as they provide an assurance of quality. They should look for standardisation marks like the ISI mark on electrical goods, the FPO mark on processed food products, and the Hallmark on jewellery.

• Learn About Risks and Use Products Safely: Consumers should learn about the risks associated with certain products and services. They must follow the manufacturer’s instructions carefully and use the products safely to avoid any accidents or harm.

• Read Labels Carefully: A consumer should make it a habit to read the labels on products carefully so as to have complete information about prices, net weight, ingredients, and the manufacturing and expiry dates.

• Assert Yourself for a Fair Deal: Consumers must be assertive to ensure that they get a fair deal. They should not hesitate to question the seller about the quality, quantity, and price of the goods.

• Be Honest in Your Dealings: A consumer has a responsibility to be honest in their dealings. They should choose only from legal goods and services and should discourage unscrupulous practices like black-marketing and hoarding by not participating in them.

• Ask for a Cash Memo: Consumers should always ask for a cash memo or a bill on the purchase of goods or services. This document serves as a proof of the purchase made and is essential for filing a complaint if the product is defective.

• File a Complaint: In case of a shortcoming in the quality of goods purchased or services availed, a consumer should not hesitate to file a complaint in an appropriate consumer forum. They should not fail to take action even when the amount involved is small, as this helps in curbing malpractices.

• Form Consumer Societies: Consumers should come together to form consumer societies which can play an active part in educating other consumers and in safeguarding their collective interests.

• Respect the Environment: Consumers have a responsibility to be environmentally conscious. They should avoid waste, littering, and contributing to pollution. They should also promote the use of eco-friendly products.

Ways and Means of Consumer Protection

While an aware and responsible consumer is the first line of defence, the objective of comprehensive consumer protection is achieved through a multi-pronged approach involving businesses, associations, consumer groups, and the government. The main ways and means of consumer protection are:

1. Self-regulation by Business

Enlightened and socially responsible firms understand that it is in their own long-term interest to serve their customers well. They follow ethical standards and practices in their dealings with customers. Many progressive firms have set up their own dedicated customer service and grievance cells to promptly and effectively redress the problems and grievances of their consumers. This self-regulation by businesses is a proactive way of ensuring consumer protection.

2. Business Associations

The leading associations of trade, commerce, and business, like the Federation of Indian Chambers of Commerce of India (FICCI) and the Confederation of Indian Industries (CII), have laid down their own code of conduct for their members. These codes of conduct provide guidelines for their members on how to deal with customers in a fair and ethical manner.

3. Consumer Awareness

A consumer who is well-informed about their rights and the reliefs available to them is in a much better position to raise their voice against any unfair trade practices or unscrupulous exploitation. In addition to this, an understanding of their responsibilities also enables a consumer to safeguard their own interests. In this regard, the Department of Consumer Affairs, Government of India, has been undertaking the very popular 'Jago Grahak Jago' campaign for generating awareness among consumers through various media channels.

4. Consumer Organisations and NGOs

Consumer organisations and Non-Governmental Organisations (NGOs) play a very important role in educating consumers about their rights and in providing protection to them. These organisations can act as a powerful force to compel business firms to avoid malpractices and the exploitation of consumers. They also provide legal assistance and file complaints on behalf of consumers.

5. Government

The government can protect the interests of consumers by enacting various legislative measures. The most important of these regulations is the Consumer Protection Act, 2019. This Act provides for a comprehensive legal framework, including the establishment of a Central Consumer Protection Authority (CCPA) and a three-tier quasi-judicial machinery for the speedy and effective redressal of consumer grievances.

Redressal Agencies under the Consumer Protection Act

For the redressal of consumer grievances in an accessible, speedy, and inexpensive manner, the Consumer Protection Act, 2019, provides for the setting up of a three-tier quasi-judicial enforcement machinery at the District, State, and National levels. This is a very important feature of the Act.

1. District Consumer Disputes Redressal Commission (District Commission)

The District Commission is established by the State Government in each district. It has a jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees. The District Commission, after being satisfied with the genuineness of a complaint, can issue a direction to the opposite party. If any of the parties are not satisfied with the order of the District Commission, they have the right to appeal against such an order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order.

2. State Consumer Disputes Redressal Commission (State Commission)

The State Commission is established by the respective State Government and ordinarily functions at the state capital. It has a jurisdiction to entertain complaints where the value of the goods and services paid as consideration exceeds one crore rupees but does not exceed ten crore rupees. It also entertains appeals against the orders of the District Commissions. If any of the parties are not satisfied with the order of the State Commission, they can appeal against such an order to the National Commission within a period of thirty days of such an order.

3. National Consumer Disputes Redressal Commission (National Commission)

The National Commission is set up by the Central Government and has territorial jurisdiction over the whole country. The National Commission has a jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds ten crores of rupees. It also hears appeals against the orders of the State Commissions. If any of the parties are not satisfied with the order of the National Commission, they can appeal against such an order to the Supreme Court of India within a period of thirty days of such an order.

Relief Available to Consumers

If a District, State, or National Commission is satisfied that a consumer has been harmed due to a defect in goods, a deficiency in services, or any unfair trade practice, it can issue an order to the opposite party for one or more of the following reliefs:

• To remove the defect in the goods or the deficiency in the service.

• 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 or injury suffered by the consumer due to the negligence of the opposite party.

• To pay punitive damages in appropriate circumstances.

• To discontinue the unfair or restrictive trade practice and not to repeat it in the future.

• Not to offer hazardous goods for sale and to withdraw hazardous goods from sale.

• To cease the manufacture of hazardous goods and to desist from offering hazardous services.

Role of Consumer Organisations and NGOs

In India, several consumer organisations and non-governmental organisations (NGOs) have been set up and are playing an active and vital role in the protection and promotion of consumers’ interests. These organisations are non-profit and are free from government interference. They perform several important functions for the protection and promotion of the interests of consumers. These include:

• Educating the General Public: They educate the general public about their consumer rights by organising training programmes, seminars, and workshops.

• Publishing Periodicals: They publish periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available, and other matters of interest. An example is the magazine published by the Consumer Guidance Society of India (CGSI).

• Carrying out Comparative Testing: They carry out comparative testing of consumer products in accredited laboratories to test the relative qualities of competing brands and then publish the test results for the benefit of consumers, so they can make an informed choice.

• Encouraging Consumers to Protest: They encourage consumers to strongly protest and take action against unscrupulous, exploitative, and unfair trade practices of sellers.

• Providing Legal Assistance: They provide legal assistance to consumers by way of providing aid, legal advice, etc., in seeking a legal remedy for their grievances.

• Filing Complaints: They file complaints in appropriate consumer courts on behalf of consumers who are unable to do so themselves.

• Taking Initiative in Filing Cases: They take an initiative in filing cases in consumer courts in the interest of the general public, not just for any individual. This is known as Public Interest Litigation (PIL).

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