The newly enacted Consumer Protection Act comes into force from July 20, replacing more than three decades old Consumer Protection Act, 1986. The new Act will give more power to consumers, as per the experts.
The concepts of Consumer Protection and Consumer Awareness came into existence to safeguard the interests of the consumers and address their concerns.
To protect consumers from unfair trade practices, The Consumer Protection Act was first passed in 1986. It aimed at encouraging consumers to know their rights. The basic idea was to save them from exploitation and deficient services.
The Consumer Protection Act, 2019, which repealed the earlier Act, received presidential assent on August 9, 2019. It came into effect from July 20, 2020.
Ram Vilas Paswan, the Union Minister for Consumer Affairs, Food & Public Distribution, on a video conference directed the media about the New Consumer Protection Act, 2019.
He said,” This new Act will empower consumers and help them in protecting their rights through its various notified rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant / counterfeit goods.”
Minister Ram Vilas further mentioned that the Act would also cover the rules for the prevention of unfair or unjust trade practices by e-commerce platforms.
Let’s take a look at the features of the New Consumer Protection Act, 2019
- Setting up a Central Consumer Protection Authority
The Act suggests the establishment of an advisory body on consumer issues known as the Central Consumer Protection Authority (CCPA). The Ministry of Consumer Affairs will head it.
The body will protect, promote, and enforce the rights of the consumer. The CCPA will have the powers to investigate matters concerning consumer rights violations, either on a complaint or on a direction from the government.
The Central Consumer Protection Authority can pass an order to recall goods or withdrawal services that are unsafe; refund the prices of goods or services; discontinue misleading advertisements; and impose penalties on the manufacture, storage, distribution, and selling of contaminated products.
- Simplifying the Consumer Dispute Resolution process
The new Act aims to simplify the consumer dispute resolution process in the Consumer Commissions. Minister Ram Vilas asserted that in earlier Consumer Protection Act, 1986, giving justice was a time-consuming process. The new Consumer Protection Act, 2019, will save time and effort.
Firstly, it will allow consumers to file complaints electronically.
Secondly, consumers will be able to file a complaint in the nearest Consumer Commission under the jurisdiction of which he resides.
Thirdly, for mediation, there will be a fixed timeline. The arbitration will take place in the individual mediation cells established under the Consumer Commission.
Fourthly, there will be no fee for filing up cases up to 5 lakh rupees, as per the Consumer Disputes Redressal Commission Rules.
Lastly, the Act also empowers the State and District Commissions to review their orders. Also, consumers can seek to hear through a video call.
- E-commerce rules
Minister Ram Vilas said that the new Act would offer protection to the consumer not only from traditional sellers but also from the latest e-commerce platforms.
Under the Act, every e-commerce retailer or platform has to provide information relating to refund, exchange, return, warranty and guarantee, delivery and shipment, grievance redressal mechanism, modes of payment, the security of payment methods, country of origin, etc.
Details about the ‘sellers’ offering of goods and services are also mandatory. It includes the name of their business, their geographical location, whether registered or not, customer care number, any rating or feedback about that seller, etc.
This information is required for empowering the consumers to make an informed decision. Also, the e-commerce entities will be subjected to penal action for not abiding these new rules.
The e-commerce rules of the Consumer Protection Act, 2019 will come into effect by the end of this week.
- Product Liability
The Act envisages a new provision of the Product Liability.
Product liability is the area of law in which manufacturers, sellers, or service providers are held responsible for any defect in the product or any injuries caused by the product or service.
If the goods or services cause any harm, including personal injury, illness, death, or damage to property, then the manufacturer has to compensate for the products or services.
The Act also punishes the manufacturers for selling adulterant or counterfeit goods.
- Misleading Advertisements
The Act provides provisions against misleading advertisements. Now the celebrities have to take extra caution for endorsing a product.
Manufacturers, service providers, sellers, or celebrity endorsers will be held accountable for any misleading or false advertisement. There will be a fine up to 10 lakh rupees or imprisonment extending up to two years.
However, the celebrity endorser will not get imprisoned. He/she will not be permitted to endorse the particular product or service for one year. The period may get extended up to three years.
Will the law benefit you?
The new Consumer Protection Act, 2019, allows you to file a complaint to the Consumer court of your area. Earlier, you were required to register a case to the court in the area where the seller is located or from where the transaction took place. This comes as a significant relief to the consumers.
Filing an electronic complaint and seeking a hearing through video conferencing will save time, efforts, and money.
The Central Consumer Protection Authority will function to address matters related to unfair trade practices, consumer rights, misleading and false advertisements, and faulty and fake products.
In the previous Act, there were no rules for e-commerce. During the time, the old Act was enacted, there were no such things like online trading or digital selling. By the time trade electronically shifted to the Internet, new provisions were not introduced.
The laws mentioned above will now govern e-commerce. It is an appropriate move for the consumers, considering the rise of online trade and malpractices.
Now, all the e-commerce sellers and platforms like Flipkart, Amazon, etc. have to provide some mandatory information. The aim is to increase transparency and enable consumers to make an informed choice during the pre-purchase process.
Also Read: Railway’s Privatization: A Benefactory?
The laws related to product liability will have a significant impact. It says that a manufacturer or a seller will be responsible for the harm caused due to its product or service. To illustrate, if a microwave explodes or catches fire due to manufacturing defects and injures the consumer, then the seller is liable for this harm. The seller has to compensate for the damages caused by its product. Earlier, it was not so. The seller would only pay for the product’s cost.
The overall aim of the Consumer Protection Act, 2019, is to benefit the consumers and strengthen the consumer laws in India.