Consumer protection law: New dimensions

The newly enacted Consumer Protection Act [CPA] 2019, and Rules framed so far, have added a couple of new dimensions thereby strengthening the voice of the consumers. While issues like giving consumers a choice to file complaints where they reside, e-filing of complaints, widening the meaning of misleading advertisements is noteworthy, more important are inclusion of Unfair Contracts, Product Liability, Mediation, E-Commerce and setting up of Central Consumer Protection Authority [CCPA].

By adding Unfair Contract as a ground for filing complaints, the CPA has gone beyond simple defects and deficiency in services. As per the new legislation requiring a consumer to give excessive security deposit for the performance of a contract, imposing a disproportionate penalty on consumers, refusal to accept early repayment of debts are treated as unfair contracts and consumers can approach the Consumer Grievance Redressal Commissions [CGRC] for relief.

The definition of unfair trade practices have been so widened to bring almost all known unfair practices into its jurisdiction including acts like failure or non-issuance of a bill or a cash memo, refusal to take back or withdraw defective goods or withdrawal or discontinuance of deficient services, refusal to refund the consideration amount paid within the period as stipulated in the bill, cash memo, receipt or in the absence of such stipulation, within 30 days etc.

However, the inclusion of disclosure of consumer’s personal information to any other person as an unfair trade practice is path breaking.

The new CPA has brought in the concept of Product Liability, which was hitherto not an issue of consumer protection. Sporadic instances of mobile phone sets exploding while charging or bursting of LPG cylinders cannot be brushed aside. Taking note of these dangers, the CPA has given special importance to Product Liability.

The CPA allows a person to make a claim for product liability against a manufacturer, seller or service provider for any defect in a product or deficiency in a service. A consumer may make a claim compensation for any harm caused, including property damage, personal injury, illness, death, mental agony or emotional harm accompanying these conditions.

Including stringent measures to prevent misleading advertisements is one of the important dimensions of the CPA. Apart from bringing many practices of advertisements in its ambit, the CPA prescribes heavy penalty not only for advertisers but also for endorsers, advertisers and publishers of misleading advertisements. Henceforth, it may be difficult for the media to escape liability of misleading advertisements by just issuing a one line disclaimer. Similarly, the CCPA has been empowered to punish food adulterators with hefty fines, cancellation of licenses and even imprisonment in certain cases.

The CPA-2019 envisages establishment of a separate authority known as the CCPA. The CCPA has drawn inspiration from the United States Consumer Product Safety Commission, though the structure, functions and objects differ.

The object of the CCPA is to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.

In particular, the CCPA seeks to protect the rights of consumers as a class, and prevent violation of consumers rights, prevent unfair trade practices, ensure that no false or misleading advertisement is made that no person takes part in the publication of any advertisement which is false or misleading.

Wide powers

The CCPA has wide powers to inquire or investigate into violations of consumer rights or unfair trade practices, either suo motu or on a complaint received or on the directions from the Central government, file complaints before the CDRCs, recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights; spread and promote awareness on consumer rights, mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers' interest.

It is empowered to issue orders like recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe, reimbursement of the prices of goods or services so recalled to purchasers of such goods or services; and discontinuation of practices which are unfair and prejudicial to consumers' interest.

Bringing e-commerce under the CPA is certainly a new dimension of consumer protection. Some of the consumer forums did hold e-commerce portals guilty of deficiency in service. But the e-commerce entities took shelter under the loopholes in the old CPA.

But the new CPA has tightened the net and elaborate rules have been framed to make e-commerce portals accountable to the consumers and the government. Consumers can now seek remedy for losses caused by e-commerce portals. Similarly, mediation centres are proposed at the district, state and national levels.

However, the new CPA is not without drawbacks, particularly those relating to the eligibility of Voluntary Consumer Organisations [VCOs]. Since 1986, VCOs were representing consumers and were successful to a large extent. Some of the reputed VCOs were able to get relief to thousands of depositors, victims of Ponzi schemes etc. But under the new CPA, the role of VCOs has been restricted. For instance, VCOs are required to submit an affidavit for appearing before the redressal agencies.

The success of the new dimensions depends on presence of strong VCOs, media and more particularly the Central/state governments. The states have a number of responsibilities listed in the CPA. For instance, states have to constitute the State Consumer Protection Councils. In Karnataka, this is pending for the past 15 years.

(The writer is Founder of Consumer Rights Education and Awareness Trust, Bengaluru)