Consumer Protection Act, 2019

The new Consumer Protection Act, which took effect in 2019, superseded the previous Consumer Protection Act, which was enacted in 1986. Its various declared Rules and clauses aim to empower consumers and assist them in protecting their rights.

Salient Features of the Bill: 

Definition of Consumer: A consumer is defined as a person who buys any goods or avails a service for consideration.  A person who obtains a good for resale or a good or service for commercial purposes is not included. It encompasses all types of transactions, including those conducted offline and online via electronic means, teleshopping, multi-level marketing, and direct selling.

The Act also defines consumer rights as: 

• The right to be protected against the marketing of dangerous goods and services that can endanger life and property.
• The right to know about the goods or services’ quality, quantity, potency, purity, standard, and pricing.
• To have access to a wide range of goods and services at reasonable rates.

To seek restitution for unfair or discriminatory trading practises.Central Consumer Protection Authority (CCPA):

• The Act establishes the Central Consumer Protection Authority, or CCPA, with the mission of promoting, protecting, and enforcing consumer rights.
• If any marketing are deceptive, the CCPA can issue product safety notifications, order refunds, and recall products.
• The CCPA will have an investigation wing, led by a Director-General, that will be tasked with conducting inquiries or investigations into such offences.
• For a fraudulent or misleading advertisement, the CCPA can fine a manufacturer or endorser up to Rs. 10 lakh and imprison them for up to two years, or fine them up to Rs. 50 lakh and imprison them for up to five years if they repeat the offence.

Consumer Disputes Redressal Commission: At the district, state, and national levels, CDRCs will be established. Unfair or restrictive commercial practises can be reported to CDRCs in the following ways:

• Defective goods or services;
• Overcharging or deceptive charging; and
• Selling goods or services can be dangerous to one’s health and safety.

Appeals:  Only at the state and national levels may you make a complaint over an unjust contract. Appeals from a District CDRC will be heard by the State CDRC, and appeals from the State CDRC will be heard by the National CDRC. The Supreme Court will be the last resort for appeals.

Mediation: The Act authorises Consumer Commissions to send cases to mediation when there is a prospect for an early settlement and the parties agree.

• Attached to Consumer Commissions will be Mediation Cells. Consumer mediation cells will be used for the mediation.
• A selection committee consisting of the President and a member of the Consumer Commission will choose the mediators’ panel.
• There is no right of appeal against a mediation settlement.

Impact on E-commerce: 

• It will include provisions for preventing e-commerce platforms from engaging in unfair trade practices.
• They will also be required to include the information related to return, refund, exchange, warranty and guarantee and the country of origin etc., which is important for the customer to make an informed decision during the pre-purchase stage on its website.
• E-commerce platforms are required to receive any consumer complaint within 48 hours of receipt and to resolve the issue within one month of receipt. Consumer complaints should be handled by a grievance officer.
• It is mandatory for the sellers to take back goods or withdraw service or pay refunds if such goods or services are defective, deficient, delivered late.
• The e-commerce companies are prohibited from manipulating the price of goods or services.
• Product liability: This refers to a product manufacturer’s, service provider’s, or seller’s obligation to reimburse a consumer for any loss or injury caused by a defective product or poor service. Any harm that has occurred may be the subject of a compensation claim, including:

• Property damage;   
• Personal injury, illness, or death; and
• Mental agony or emotional harm accompanying these conditions.                             

Issues with the Act: 

• There is an ambiguity in the Act whether a judicial member will be part of the Consumer Disputes Redressal Commissions or not. The concept of separation of powers may be violated if the Commissions solely contain members from the executive branch.
• It is unclear to whom the Consumer Protection Councils will provide advice. It is unclear in what capacity the Councils will advise the government if they do so.
• The definition of ‘consumer rights’ in the Act is not simple and straightforward so that consumers at least know what their entitlements are.

As mentioned above, in order to protect buyers from traditional sellers and the new e-commerce retailers/platforms, many amendments are made to the new Act. The Act addresses consumer concerns about technology changes in the marketplace, eliminates logistical barriers for consumers when taking action, and expands the scope of grounds for action.