The Consumer protection (amendment) bill-2019

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The Consumer protection (amendment) bill-2019

The Ministry of Consumer Affairs, Food, and Public Distribution declared the Consumer Protection Bill, 2019 in Lok Sabha as of 8 July 2019. The bill seeks to replace the Consumer Protection Act, 1986, and to encourage consumer rights and offers a tool for redressal of complaints regarding defects in goods.

Features of the Bill include:

  • Definition of consumer:
    A consumer is defined as a person who buys any goods or avails a service for consideration. It doesn’t include a person who gets good for resale or a good or service for commercial purposes. It also covers transactions through all modes including offline, and online through electronic means, multi-level marketing, teleshopping, and direct selling.

  • Rights of consumers:
    Six consumer rights have been defined in the Bill, including the right to:
    • be informed of the quantity, potency, purity, quality, and cost of goods and services
    • seek redressal against unfair trade practices.
    • be protected against marketing of goods and services which are perilous to life and property;
    • be assured of access to a range of goods or services at competitive prices

  • Central Consumer Protection Authority:
    The central government will set up a Central Consumer Protection Authority (CCPA) to promote, enforce and protect the rights of consumers. It will regulate matters related to infringement of consumer rights, unfair trade practices, and misleading advertisements. The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry into such violations.

  • CCPA will carry out the following functions, including:
    • inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum;
    • passing orders to recollect goods or withdraw services that are dangerous, compensation of the price paid, and discontinuation of the unfair trade practices, as stated in the Bill;
    • issuing directions to the concerned trader/endorser/advertiser/manufacturer to either discontinue a false or misleading advertisement or transform it
    • imposing penalties, and issuing safety notices to consumers against unsafe goods and services.

  • Penalties for misleading advertisement:
    The CCPA may levy a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false advertisement. In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.

  • CCPA can also ban the endorser of a misleading advertisement from endorsing that particular product or service for up to one year. For every subsequent offence, the period of prohibition may extend to three years. However, there are specific exceptions when an endorser will not be held liable for such a penalty.

  • Consumer Disputes Redressal Commission:
    Consumer Disputes Redressal Commissions (CDRCs) will be formed at the district, state, and national levels. A consumer can lodge a complaint with CDRCs in relation to:
    • overcharging or deceptive charging,
    • faulty goods or services;
    • unfair or restrictive trade practices;
    • the offering of goods or services for sale which may be menace to life and safety.
    Complaints against an unfair contract can be lodged with only the State and National Appeals from a District CDRC will be heard by the State CDRC. Appeals from the State CDRC will be heard by the National CDRC and the final appeal will lie before the Supreme Court.

advantages to consumers

  • Deterrent punishment to check misleading advertisements and adulteration of products
  • At present consumer only have a single point of access to justice, which is time consuming. Additional swift executive remedies are stated in the bill through Central Consumer Protection Authority (CCPA)
  • Scope for early disposal of cases through mediation
  • Product liability provision to prevent manufacturers and service providers from delivering defective products or deficient services
  • Ease of approaching Consumer Commission and Simplification of Adjudication process
  • Provision for rules for new age consumer issues:
    E-commerce & direct selling

  • Jurisdiction of CDRCs:
    The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore. The State CDRC will entertain complaints when the value is more than Rs one crore but doesn’t exceed Rs 10 crore. Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.

  • Product liability:
    Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service. To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.

What need to be done

  • Multi-level marketing, misleading advertisement, e-commerce, tele-marketing, and direct selling pose new challenges to consumer protection and will need appropriate and swift executive intervention to shield consumer detriment. Celebrity endorse any ads shouldn’t publicize wrong facts and information about products.
  • The setting up of a Consumer Authority and absence of provisions to rationalize the conducting of cases in courts may only lead to greater complexities and regulations.
  • Appointment of mediators to settle disputes to arm-twisting of the weaker parties and may encourage corruption.
  • The Bill does not address the fundamental problem of complication and protracted litigation, the bane of consumer forums constituted under the Consumer Protection Act of 1986. Instead, it provides a choice to the consumer forums, in the form of mediation.