consumer protection

Consumer Protection Act, 2019

Context:

The Consumer Protection Act, 2019 has come into effect from July 20, replacing the earlier Consumer Protection Act, 1986.

  • The Consumer Protection Bill, 2019 got the President’s nod on August 2019.

Highlights of the legislation:

  1. Definition of 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.
  1. Six consumer rights have been defined in the act, including the right to:
  • Right to Safety.
  • Right to be Informed.
  • Right to Choose.
  • Right to be heard.
  • Right to seek Redressal.
  • Right to Consumer Education.
  1. Central Consumer Protection Authority:

The central government will set up 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.
  1. Increased compensation:

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.

  1. Consumer Disputes Redressal Commission:

CDRCs will be set up at the district, state, and national levels.  A consumer can file a complaint 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.
  1. Appeals:

Complaints against an unfair contract can be filed only at the State and National levels.

  • 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.
  1. Jurisdiction of CDRCs:
  • The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore.
  • The State CDRC will entertain complaints when the value is more than Rs one crore but does not exceed Rs 10 crore.
  • Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.
  1. Mediation:

The act provides for reference to mediation by Consumer Commissions wherever scope for early settlement exists and parties agree for it.

  • Mediation Cells to be attached to Consumer Commissions. Mediation to be held in consumer mediation cells.
  • Panel of mediators to be selected by a selection committee consisting of the President and a member of Consumer Commission.
  • No appeal against settlement through mediation.
  1. Impact of Consumer Protection Act, 2019 on e-commerce platforms:

The e-commerce portals will have to set up a robust consumer redressal mechanism as part of the rules under the Consumer Protection Act, 2019.

  • They will also have to mention the country of originwhich are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.
  • The e-commerce platforms also 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.
  1. Product Liability:

A manufacturer or product service provider or product seller will be held responsible to compensate for injury or damage caused by defective product or deficiency in services

act1986_act2019

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