Consumer service isn’t a department, it is a part of everyone’s job. It is an integral part of business. It’s the part we should not neglect because when we ignore our customers, we tend to risk the success of our business. Customers are the only purpose of any business. There are a variety of situations where the consumers are taken for granted and they are expected to deal with the unsatisfactory services. The Government of India has brought in various legislations in order to protect the customers from such harassment and frauds.
The Consumer Protection Act was first implemented in 1986 in order to safeguard the consumers’ interests.
This legislation had been amended from several times to bring it in acquaintance with the changes brought by economic liberalisation, globalisation of markets and digitalisation of products and services. However, its practical application was far from satisfying its expected objective of being a socio-economic legislation which sought to provide for better protection of the interests of consumers. The new Consumer Protection Act of 2019 brings about fundamental changes to the existing legislation. It has significantly enhanced the scope of protection to consumers. The 2019 Act is indeed a positive step towards restructuring and improvement of consumer laws, in the light of dynamically changing socio-economic environment.
THE CONSUMER PROTECTION ACT 2019
The Consumer Protection Act 2019 is not an amendment in the 1986 Act, the government enacted a new Act so as to provide enhanced protection to the consumers. The Consumer Protection Bill 2019 was introduced in the Lok Sabha on 8 July 2019 by the Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan. It was passed by Lok Sabha on 30 July 2019and later passed in Rajya Sabha on 6 August 2019. The bill received approval from President Ram Nath Kovind on 9 August and was notified in The Gazette of India thereafter. Most of the provisions of the Act came into effect on 20 July 2020.
The old Act was repealed and replaced. Though the Act of 1986 proved to be a boon for the consumers, it was limited to a narrower aspect.The 2019 Act has brought in some major changes and provides more protection to the consumers by putting more concern to the consumers’ welfare by adoption of all-inclusive approach.
KEY HIGHLIGHTS OF THE NEW CONSUMER PROTECTION ACT 2019
In the era of digitalization and improved technology, the usage of mobile phones have increased in every sector of the economy. Payments, bookings, shopping are possible by the single tap of a finger. With the subsequent increase in the e-commerce activities, the deceitful activities are also being increased on a large scale. The e-platforms have exposed the consumers to more risks than ever. The Consumer Protection Act 1986 didn’t cover the e-commerce sectors and online transactions and hadother flaws as well. The new Consumer Protection Act 2019 sought to address these issues and included important provisions forthe further benefits of the consumers.
The major changes brought by the new Act and some of its notable highlights are mentioned as follows-
1. Broadening of the definition of consumer
Section 2(7) of the Consumer Protection Act 2019 has included an explanation (b) stating that consumer means a person who ‘buys any goods’and ‘hires or avails any services’ which includes both offline and online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.The insertion of the online transactions in the definition of the consumer is the most remarkable change brought in by this Act. Now every e-commerce entity are bound to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment etc.This is one of the most welcoming provision as most of the people prefer online purchase of goods nowadays.
2. Introduction of the concept of unfair contracts
Following international jurisprudence, the New Act introduces a unique provision that defences consumers against unfair contracts. Section 2(46) of the Act of 2019speaks about unfair contract. A contract between a trader/service provider and consumer will be regarded as unfair if it causes a significant change in the consumer rights. Undoubtedly, this will benefit the consumers while taking loans, insurance policies, etc.
3. Consumer Protection Councils & Central Consumer Protection Authority (CCPA)
Chapter II of the new Actstates the provisions for the establishment of the Consumer Protection Councils by the Central & State government at all the Central, State & District levels to render advice on promotion and protection of the consumers’ rights provided under the Act. Chapter III also contains the provisions for the establishment of a regulatory authority to protect, promote and enforce the rights of consumers known as the Central Consumer Protection Authority (CCPA).The CCPA will have the right to impose a fine on the violators and pass orders to recall goods or withdraw services, discontinuation of the unfair trade practices and recompense the price paid by the consumers.This is the biggest step introduced as there was no regulatory authority to prevent the violation of consumer rights.
4. Alternative Disputes Resolution Mechanism
The new Act includes mediation as an alternate dispute resolution mechanism, making the process of dispute settlement simpler and quicker.Section 37 of the new Act states that after the admittance of the complaint, the consumer commissions may refer the case for mediation where there is a scope for early settlement if the parties agree for the same. The mediation will be held in the mediation cells (Chapter V of the Act) which should be established by the State Government under Section 74 of the new Act. Thismethod for the resolution of disputes will help in preventing longer litigations.The rules governing the mediation have also beenframed by the central government.
5. Product Liability
The New Act has formally introduced the concept of product liability and brought within its ambit not only the product manufacturer but also the service providers and the product sellers. There are separate provisions dealing with the liability of each. Product liability arises due to both physical and mental harm caused by the faulty product. Sections 82 to 87 which appears in Chapter VI of CPA 2019, provide an broad outline which would apply to every claim for compensation under a product liability action. This is a much-needed regime in this era of digitalisation. However, there are certain exceptions which are included in the case of product liability action; for instance, the product seller will not be liable in case the product has been misused, altered, or modified.
6. E-filing of complaints
The new CPA 2019 is much more flexible in the sense that it laid down separate provision for E-filing of complaints. Any recognised consumer union can file complaint electronically and it can be heard by means of video conferencing as authorized under Section 35 of the Act. This proves to be very fruitful to the consumers as they have the means to report their issue from home itself.
7. Misleading Advertisements
The new Act for the first time introduced a conception of misleading advertisement. Advertisement sometimes proves to delude the consumers and can be deceptive in nature. Section 89 of the Actstates that any manufacturer or service provider who causes a false or misleading advertisement shall be punished with imprisonment which may extend to five years and with fine which may extend to fifty lakh rupees.Moreover,Section 21 of the CPA 2019 has also given the power to the Central Authority to impose a penalty on the endorsers in case of such false or misleading advertisement up to ten lakh rupees which may extend to fifty lakh rupees in situation of subsequent contravention.
8. Enhancement of Pecuniary Jurisdiction
Like the previous Act of 1986,there are three consumer grievance redressal for a- The District Commission, State Commissioner and National Commission. Each of these has a certain pecuniary limit to entertain consumer grievances. The limits have been increased in the new Act from their existing limits. Sections 34, 47 & 58 of the new Act talks about the territorial & pecuniary jurisdiction of District, State & National Commissions, respectively. District Commission has the jurisdiction to entertain the complaints of the value of the goods or services paid as consideration from Rs. 20 lakhs to 1 crore, State Commission between Rs.1 crore to Rs.10 crore; and National Commission above Rs. 10 Crore. This is awanted change brought in as the access to the District Commissions is easy in comparisonto the State and the National Commissions. Previously, it was a major problem for the consumers as they had to go to state or national commissions due to the exceeding of pecuniary limits in district commission.
9. Celebrity endorsements
There have been various incidents in the nearby past where the consumers have fallen prey to unfair trade practices due to the influence of celebrities who act as brand representatives. The endorser is put into liability in such cases. This is a very interesting part brought under the Consumer Protection Act 2019. The celebrity would be liable for any false or misleading advertisements. If a misleading advertisement is found to be disadvantageous to consumer interest, then the Central Authority may impose a penalty of up to Rs 1lakh on the endorser. The Central Authority can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to 1 year and the period of prohibition may extend to 3 years.
CONSUMERS KINGDOM ON RISE
New modes of business such as telemarketing, direct selling, multilevel promotion, and e-commercewhich were not pictured three decades backhave made consumers more exposed to unfair trade practices. The legal framework of the 1986 Acthad failed to discuss these emerging issues. With the implementation of the 2019 Act, the scope of reporting grievances increased a lot. Provisions for punishment to check misleading advertisements and adulteration of products, Product liability provision to deter manufacturers and service providers from delivering defective products or services are included. It also states that any inventory e-commerce entity which explicitly or implicitly vouches for the authenticity of the goods or services sold by it, or guarantees that such goods or services are authentic, shall bear appropriate liability in any action related to the authenticity of such good or service.One of the most interesting but important part of the new Act is celebrity branding is no longer an easy route to market products and the fastest growing segment i.e. e-commerce also found its recognition in the Act. It will grow more responsively. According to experts, the CPA 2019 seeks to tittivate the process of administration and settlement of consumer disputes. Over and above the new Consumer Protection Act,2019 in India is an upper hand and an improved advantage for the consumers in multifarious ways.
With this new Act, there appears to be a shift from Caveat Emptor to Caveat Venditor.TheAct covers the aspects such as Mediation and E-commerce as well which the world was oblivious ofin 1986. Certainly, 2019 Act is a constructive step towards improvement, development, and enhancement of consumer rights. As a consumer, it is also imperative for all of us to understand the rights and the reliefs awarded for violation of those rights and accordingly raise our voices. Afterall, we, the consumers must remember that its ‘our money, our rights.’
1. The Consumer Protection Act, 2019 (http://egazette.nic.in/WriteReadData/2019/210422.pdf)