- The Lok Sabha has unanimously passed the Consumer Protection Bill 2019, which seeks to wholly replace the Consumer Protection Act 1986.
Need for the Bill:
- The new law was necessary for strengthening consumer rights in view of the modern day challenges.
- The present law does not have a regulator, which will be provided under the new law as Central Consumer Protection Authority.
- The present law had no provisions for new age developments like e-commerce, direct selling, tele-marketing etc.
- The Consumer Protection Bill, 2018, was introduced in Lok Sabha in January 2018 and was passed by the House in December 2018.
- The bill, pending in Rajya Sabha, got lapsed after Lok Sabha dissolved.
- Hence, the government has brought in the new consumer protection bill in the recent session.
About Consumer Protection Bill 2019
- The Consumer Protection Bill 2018 provides for protection of interests of consumers and setting up of authorities for timely and effective administration and settlement of consumer disputes.
Who is a consumer?
- A consumer is defined as a person who buys any good or avails a service for a consideration.
- It does not include a person who obtains a good for resale or a good or service for commercial purpose.
- It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.
What are the rights of a consumer?
- be protected against marketing of goods and services which are hazardous to life and property;
- be informed of the quality, quantity, potency, purity, standard and price of goods or services;
- be assured of access to a variety of goods or services at competitive prices;
- seek redressal against unfair or restrictive trade practices.
Key Features of the Bill:
Central Consumer Protection Authority:
- The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.
- It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.
- The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.
- The District Collector is empowered to report to the CCPA regarding mass consumer complaints in the concerned jurisdiction.
- inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum;
- passing orders to recall goods or withdraw services that are hazardous, reimbursement of the price paid, and discontinuation of the unfair trade practices.
- issuing directions to either discontinue or modify a false or misleading advertisement
- imposing penalties
- issuing safety notices to consumers against unsafe goods and services.
Penalties for misleading advertisement:
- The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.
- In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
- Misleading Advertisement: Misleading advertisements’ are defined under the bill as advertisement, which:
- falsely describes such product or service; or
- gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or
- conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or
- deliberately conceals important information.
Liability of celebrity endorsers:
- The endorser can be levied with penalty up to rupees ten lakhs by the CCPA for false and misleading advertisements.
- CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year, which may extend to three years for every subsequent offence
- However, the endorser will not be liable if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.
Consumer Disputes Redressal Commission:
- Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels.
Complaint can be filed with CDRCs in relation to:
- unfair or restrictive trade practices;
- defective goods or services;
- overcharging or deceptive charging; and
- the offering of goods or services for sale which may be hazardous to life and safety.
Jurisdiction of CDRCs:
Complaint against defective/ overcharging of / hazardous goods/ services
- If the value of goods and services is below 1 crore: District CDRC will entertain complaints
- If the value of goods and services is below 10 crore: The State CDRC will entertain complaints.
- If the value of goods and services is over 10 crore: The National CDRC will entertain complaints.
Complaint against Unfair Contract
- Complaints against an unfair contract can be filed with only the State and National Appeals from a District CDRC will be heard by the State CDRC.
- Appeals from the State CDRC will be heard by the National CDRC.
- Final appeal will lie before the Supreme Court.
Note: The Central Government is empowered to make rules to regulate direct selling, multi-level marketing, e-commerce, tele-shopping etc.
Refer these Videos for better Understanding