Consumer Protection — notes

Consumer protection means safeguarding consumers against unfair trade practices, defective goods and deficient services, and helping them get redress.

Need: consumers are unorganised and weak against large sellers; they lack information on quality, safety and price; they face unfair practices such as adulteration, short weighing and false claims; and defective goods can endanger life and property.

Methods:

• Self-help — consumers protect themselves through awareness: checking quality marks, reading labels, keeping bills and complaining.
• Legislation — laws such as the Consumer Protection Act, 2019, and laws on weights and measures and food safety.
• Consumer associations and NGOs — voluntary bodies that educate consumers, test products, publish findings and help or represent consumers in complaints.

Consumer (Consumer Protection Act, 2019): a person who buys goods or hires or avails services for a consideration (paid, promised, partly paid or deferred), including a user with the buyer's approval. Transactions offline or online, through teleshopping, direct selling or multi-level marketing, are covered. A person who obtains goods for resale or for a commercial purpose is not a consumer, but use of goods bought exclusively to earn one's livelihood by self-employment is not a commercial purpose.

Rights: safety; to be informed; to choose; to be heard; to seek redressal; to consumer awareness.

Responsibilities: be aware of rights; read labels and terms; insist on a bill and warranty card; prefer goods with standard quality marks; use goods as instructed; file only genuine complaints; be honest in dealings.

The 2019 Act sets up a three-tier machinery of Consumer Disputes Redressal Commissions. Their pecuniary limits were revised by rules notified in December 2021 and depend on the value of goods or services paid as consideration:

• District Commission — up to ₹50 lakh.
• State Commission — above ₹50 lakh and up to ₹2 crore; also hears appeals from District Commissions.
• National Commission — above ₹2 crore; also hears appeals from State Commissions.

Appeals against the National Commission's orders on complaints filed before it lie to the Supreme Court.

Easier redress: a complaint can be filed where the consumer lives or works; complaints can be filed electronically; disputes can be referred to mediation if both parties agree.

Dated note: limits are as notified in December 2021; check for later revisions.

A misleading advertisement is one that falsely describes a product or service, gives a false guarantee or is likely to mislead about its nature, quantity or quality, amounts to an unfair trade practice, or deliberately conceals important information.

Central Consumer Protection Authority (CCPA): set up under the 2019 Act to protect, promote and enforce the rights of consumers as a class. It can investigate, order recall of unsafe goods and refunds, and direct a trader, manufacturer, endorser or publisher to discontinue or modify a false or misleading advertisement.

Penalties: on a manufacturer or endorser, up to ₹10 lakh, and up to ₹50 lakh for every subsequent contravention. The CCPA may also bar an endorser from endorsing for a period. An endorser who exercised due diligence to verify the claims is not penalised.

What a misled consumer can do: complain to the CCPA, or file a complaint before a commission for refund, compensation or a corrective advertisement.

Product liability: a manufacturer, service provider or seller can be held liable to compensate for harm caused by a defective product or deficient service.

• Redressal bodies: District Forum, State Commission and National Commission (1986); all three called Commissions (2019).
• Pecuniary limits: 1986 — District up to ₹20 lakh, State above ₹20 lakh and up to ₹1 crore, National above ₹1 crore; 2019, as notified in 2021 — ₹50 lakh, ₹2 crore.
• Basis of limits: value of goods or services and compensation claimed (1986); value paid as consideration (2019).
• Regulator: none (1986); CCPA (2019).
• E-commerce: not expressly covered (1986); online, teleshopping, direct selling and multi-level marketing covered (2019).
• Place of filing: where the opposite party is or the cause arose (1986); also where the consumer lives or works (2019).
• New in 2019: product liability, mediation, e-filing, penalties for misleading advertisements including on endorsers.