Meaning and importance of consumer protection
A consumer is a person who buys goods or hires services for payment for his own use (not for resale or commercial purpose); it also includes users with the buyer's approval and online buyers. Consumer protection means protecting consumers from unfair trade practices and educating them about their rights and duties.
Importance for consumers
- Consumer ignorance: many buyers do not know their rights or remedies.
- Unorganised consumers: they are scattered and weak alone.
- Widespread exploitation: adulteration, short weight, fake goods, hoarding, overcharging, false ads, poor after-sale service.
Importance for business
- Long-term interest: happy customers come back and bring others.
- Use of society's resources: business uses resources of society, so it must serve society's interest.
- Social responsibility: towards customers and other groups.
- Moral justification: it is right to avoid cheating.
- Government intervention: if business misbehaves, the government steps in, which harms its image.
Consumer Protection Act, 2019
The Consumer Protection Act, 2019 replaced the 1986 Act and came into force in July 2020. Main points:
- Covers goods and services, including online (e-commerce) and direct selling.
- Sets up the Central Consumer Protection Authority (CCPA) to protect consumer rights, investigate unfair trade practices and misleading ads, order recalls and impose penalties.
- Product liability: the maker, seller or service provider must pay for harm caused by a defective product or deficient service.
- Complaints can be filed online (e-filing) and from where the consumer lives or works.
- Mediation is allowed for quick settlement.
- Punishment for misleading ads, including for celebrities who endorse them without care.
- Consumer Protection Councils at district, state and national levels to advise and promote rights.
Consumer rights and responsibilities
Six consumer rights
- Right to safety: protection against goods and services dangerous to life and health (for example, faulty electric irons).
- Right to be informed: full facts about quality, quantity, price, ingredients, date of making and expiry, so as to decide wisely.
- Right to choose: freedom to pick from a variety at fair prices.
- Right to be heard: to file a complaint and have it considered; firms set up grievance cells.
- Right to seek redressal: to get relief such as repair, replacement, refund or compensation.
- Right to consumer education: to learn about rights and how to use them.
Consumer responsibilities
- Know the products and services available.
- Buy only standard marked goods: ISI (electrical goods), FSSAI (food), Agmark (farm products), Hallmark (gold jewellery).
- Learn the risks and read labels carefully.
- Always ask for a cash memo or bill.
- Be honest: buy only from legal sources, avoid black marketing and hoarding.
- Assert yourself to get a fair deal, and file a complaint when there is a real problem.
- Form consumer groups; respect the environment and avoid waste.
Who can file a complaint
Under the Act a complaint can be filed by:
- A consumer.
- Any registered voluntary consumer association, even if the consumer is not a member.
- The Central Government, any State Government or the CCPA.
- One or more consumers having the same interest (a class action).
- The legal heir or representative if the consumer has died.
- The parent or legal guardian if the consumer is a minor.
A complaint can be against a defect in goods, deficiency in service, unfair or restrictive trade practices, overcharging, hazardous goods, or unfair contract terms.
Redressal machinery: the three-tier system
The Act sets up Consumer Disputes Redressal Commissions at three levels. Which one hears a case depends on the value of goods or services paid as consideration.
| Level | Value paid | Appeal against its order |
|---|---|---|
| District Commission | Up to ₹50 lakh | State Commission, within 45 days |
| State Commission | More than ₹50 lakh up to ₹2 crore | National Commission, within 30 days |
| National Commission | More than ₹2 crore | Supreme Court, within 30 days |
A State Commission also hears appeals from District Commissions, and the National Commission hears appeals from State Commissions. Each Commission can send a case to mediation if both sides agree. (Money limits as revised by the 2021 rules.)
Remedies available to consumers
If the Commission is satisfied that the complaint is true, it can order the seller or maker to:
- Remove the defect in goods or deficiency in service.
- Replace the defective product with a new, defect-free one.
- Refund the price paid.
- Pay compensation for loss or injury suffered.
- Pay punitive damages in suitable cases.
- Stop the unfair or restrictive trade practice and not repeat it.
- Stop selling hazardous goods and withdraw them from sale.
- Stop making hazardous goods.
- Pay a sum to the Consumer Welfare Fund when many unknown consumers are affected.
- Issue a corrective advertisement to undo the effect of a misleading one.
- Pay adequate costs to the complainant.
Role of consumer organisations and NGOs
Consumer organisations and non-governmental organisations (NGOs) work to protect and promote consumers' interests. Their roles:
- Educating people about their rights through training, workshops and campaigns.
- Publishing magazines and reports on consumer problems and legal help.
- Testing products in labs and publishing comparisons.
- Encouraging consumers to protest against unfair practices.
- Giving legal help and filing complaints on behalf of consumers.
- Taking part in government advisory bodies to speak for consumers.
- Filing public interest cases in courts for the public at large.
Examples of such groups in India include Consumer Coordination Council (Delhi), Common Cause (Delhi), Consumer Guidance Society of India (Mumbai), Consumer Education and Research Centre (Ahmedabad) and Voluntary Organisation in Interest of Consumer Education (VOICE, Delhi).
Key formulas and definitions
- 6 rights: Safety, Information, Choice, Be heard, Redressal, Consumer education
- District Commission: value paid up to ₹50 lakh
- State Commission: more than ₹50 lakh up to ₹2 crore
- National Commission: more than ₹2 crore
- Appeal: District → State (45 days) → National (30 days) → Supreme Court (30 days)
- Standard marks: ISI (electricals), FSSAI (food), Agmark (farm produce), Hallmark (gold)
Worked examples
1. A pressure cooker bursts because of a faulty valve. Which right was violated?
The right to safety: protection against goods that are dangerous to life and health.
2. A packet of chips has no expiry date printed. Which right is affected, and which consumer duty should the buyer have followed?
The right to be informed is violated. The buyer's duty is to read labels carefully and buy only properly labelled, standard goods.
3. Arun paid ₹35 lakh for a car with a faulty engine. Where should he file his complaint?
₹35 lakh is up to ₹50 lakh, so the District Commission.
4. A builder fails to hand over flats worth ₹1.2 crore and ₹3.5 crore to two buyers. Where will each complain?
₹1.2 crore is between ₹50 lakh and ₹2 crore, so the State Commission. ₹3.5 crore is above ₹2 crore, so the National Commission.
5. Sunita is not happy with the District Commission's order passed on 1 March. Till about when and where can she appeal?
To the State Commission within 45 days, that is, by about 15 April.
6. An ad claims a drink makes children taller in a month, which is false. Name two remedies the authority can order.
Stop the unfair trade practice (the false claim) and issue a corrective advertisement. A penalty can also be imposed on the maker.
Common mistakes
- Saying a person who buys goods for resale is a consumer. Buying for resale or commercial use is not covered.
- Using old limits (₹20 lakh / ₹1 crore). The current limits are ₹50 lakh and ₹2 crore.
- Thinking only the buyer can complain. Associations, governments, many consumers together and legal heirs can too.
- Confusing rights with responsibilities. "Ask for a bill" is a responsibility; "be informed" is a right.