- The CCPA will have the right to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses, impose penalties and file class-action suits.
- The CCPA will have an investigation wing to conduct independent inquiry or investigation into consumer law violations.
To get the List of important Acts that Transformed India for the upcoming UPSC exam preparation, candidates can visit the linked article.
Consumer Disputes Redressal Commission:
- The Act has the provision of the establishment of Consumer Disputes Redressal Commissions (CDRCs) at the national, state and district levels to entertain consumer complaints.
- As per the notified rules, the State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters.
- The CDRCs will entertain complaints related to:
- Overcharging or deceptive charging
- Unfair or restrictive trade practices
- Sale of hazardous goods and services which may be hazardous to life.
- Sale of defective goods or services
E-Filing of Complaints:
- The new Act provides flexibility to the consumer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. This is unlike the earlier condition where the consumer had to file a complaint at the place of purchase or where the seller has its registered office address.
- The new Act also contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing.
- Consumers will also not need to hire a lawyer to represent their cases.
Product Liability & Penal Consequences:
- The Act has introduced the concept of product liability.
- A manufacturer or product service provider or product seller will now be responsible for compensating for injury or damage caused by defective products or deficiency in services.
Penalties for Misleading Advertisement:
- The CCPA may impose a penalty on a manufacturer or an endorser, for a false or misleading advertisement. The CCPA may also sentence them to imprisonment.
Provision for Alternate Dispute Resolution:
- The new Act provides for mediation as an Alternate Dispute Resolution mechanism. For mediation, there will be a strict timeline fixed in the rules.
- As per the recently notified rules, a complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree to it. The mediation will be held in the Mediation Cells to be established under the aegis of the Consumer Commissions. There will be no appeal against settlement through mediation.
Unfair Trade Practices:
- The new Act has armed the authorities to take action against unfair trade practices too.
- The Act introduces a broad definition of Unfair Trade Practices, which also includes the sharing of personal information given by the consumer in confidence unless such disclosure is made in accordance with the provisions of any other law.
The Central Consumer Protection Council:
- The Consumer Protection Act empowers the Central Government to establish a Central Consumer Protection Council. It will act as an advisory body on consumer issues.
- As per the notified Central Consumer Protection Council Rules, the Central Consumer Protection Council would be headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields.
- The Council, which has a three-year tenure, will have a Minister-in-charge of consumer affairs from two States from each region – North, South, East, West, and NER. There is also a provision for having working groups from amongst the members for specific tasks.
Applicability:
- This Act is applicable to all the products and services, until or unless any product or service is especially debarred out of the scope of this Act by the Central Government.
Aspirants can read about different rights available to Indian citizens from the links given below:
Consumer Protection Act 2019 Significance:
Empowering consumers:
- The new Act will empower consumers and help them in protecting their rights through its various rules and provisions. The new Act will help in safeguarding consumer interests and rights.
- Consumer-driven businesses such as retail, e-commerce would need to have robust policies dealing with consumer redressal in place.
- The new Act will also push consumer-driven businesses to take extra precautions against unfair trade practices and unethical business practices.
Inclusion of the e-commerce sector:
- The earlier Act did not specifically include e-commerce transactions, and this lacuna has been addressed by the new Act.
- E-commerce has been witnessing tremendous growth in recent times. The Indian e-commerce market is expected to grow to US$ 200 billion by 2026.
- As per the notified rules, every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, the security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.
- The e-commerce platforms will have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act. This will bring e-commerce companies under the ambit of a structured consumer redressal mechanism.
- E-commerce entities that do not comply will face penal action.
Time-bound redressal:
- A large number of pending consumer complaints in consumer courts have been common across the country. The new Act by simplifying the resolution process can help solve consumer grievances speedily.
- A main feature of the Act is that under this, the cases are decided in a limited time period.
Responsible endorsement:
- The new Act fixes liability on endorsers considering that there have been numerous instances in the recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors.
- This will make all stakeholders – brands, agencies, celebrities, influencers and e-commerce players – a lot more responsible. The new Act would force the endorser to take the onus and exercise due diligence to verify the veracity of the claims made in the advertisement to refute liability claims.
Upholding consumer interests:
- For the first time, there will be an exclusive law dealing with Product Liability.
- Product liability provisions will deter manufacturers and service providers from delivering defective products or deficient services.
- The new legislation empowers the National Consumers Dispute Redressal Committee as well as the State Commission to declare null and void any terms of a contract while purchasing a product. This will go a long way in protecting consumers, who are often subject to contract conditions that favour a seller or manufacturer.
Alternate dispute redressal mechanism:
- The provision of Mediation will make the process of dispute adjudication simpler and quicker.
- This will provide a better mechanism to dispose of consumer complaints in a speedy manner and will help in the disposal of a large number of pending cases in consumer courts across the nation.
Simplified process for grievance redressal:
- The new Act would ease the overall process of consumer grievance redressal and dispute resolution process. This will help reduce inconvenience and harassment for the consumers.
- The enhanced pecuniary jurisdiction and provisions providing statutory recognition to mediation processes, enabling filing of complaints from any jurisdiction and for hearing parties through video-conferencing will increase accessibility to judicial forums and afford crucial protection in times when international e-commerce giants are expanding their base.
Read more about the Consumer Confidence Index (CCI) at the linked article.
Consumer Protection Act 2019 Concerns:
State regulation:
- As part of the Consumer Protection Act, 2019, the Ministry of Consumer Affairs will compile a code of conduct for advertisers and agencies, a move designed to curb unfair practices and misleading claims. The planned code will detail penalties for advertisers and their agencies and publishers if misleading advertising and false claims are found.
- There have been concerns that this approach would mark a move from self-regulation to a more federated oversight.
Implementational challenges:
- The existing vacancies at the district commission level would undermine the effective implementation of the new Act.
Lack of differentiated approach:
- As per the proposed rules for the e-commerce businesses, companies are not allowed to “manipulate the price” of goods and services offered on their platforms to gain unreasonable profit or discriminate between consumers of the same class or make any arbitrary classification of consumers affecting their rights under the Act.
- The clause on the manipulation of price by e-commerce companies appears irrelevant as sometimes, the e-commerce companies would want to reduce the price to enhance sales volume. For a country with market size of around $25 billion, the guidelines should have taken a deeper view of the e-commerce ecosystem, covering all prevailing business models between consumers, marketplaces and sellers.
Relevant Links:
Frequently Asked Questions related to the Consumer Protection Act 2019
What is the Consumer Protection Act in India?
In order to protect consumers from exploitation and to save them from adulterated and substandard goods and deficient services, the Consumer Protection Act came into force on 15th April 1986. It was replaced by the Consumer Protection Act 2019.
What are the main features of the Consumer Protection Act?
The new Act has widened the definition of ‘consumer’. The Act proposes the establishment of the Central Consumer Protection Authority (CCPA) as a regulatory authority. The new Act provides flexibility to the consumer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. The Act has introduced the concept of product liability. The new Act provides for mediation as an Alternate Dispute Resolution mechanism. For mediation, there will be a strict timeline fixed in the rules. The new Act has armed the authorities to take action against unfair trade practices too. This Act is applicable to all the products and services, until or unless any product or service is especially debarred out of the scope of this Act by the Central Government.
What is the aim of the Consumer Protection Act?
The basic aim of the Consumer Protection Act, 2019 to save the rights of the consumers by establishing authorities for timely and effective administration and settlement of consumers’ disputes.
