Consumer Protection Act 2019 PDF

**UNIT 4** **CONSUMER PROTECTION ACT ,2019** Consumers need to be able to obtain accurate, unbiased information about the products and services they purchase. This enables them to make the best choices based on their interests and prevents them from being mistreated or misled by businesses. Consum...

**UNIT 4** **CONSUMER PROTECTION ACT ,2019** Consumers need to be able to obtain accurate, unbiased information about the products and services they purchase. This enables them to make the best choices based on their interests and prevents them from being mistreated or misled by businesses. Consumer protection policies, laws and regulations help increase consumer welfare by ensuring that businesses can be held accountable. **WHO IS A CONSUMER?** A Consumer is a person who purchases a product or avails a service for a consideration, either for his personal use or to earn his livelihood by means of self employment. The consideration may be: Paid Promised Partly paid and partly promised. It also includes a beneficiary of such goods/services when such use is made with the approval of such person. **Person buying goods for self employment is a consumer** - When goods are bought for commercial purposes and such purchase satisfy the following criteria : \-   the goods are used by the buyer himself; \-   exclusively for the purpose of earning his livelihood; \-   by means of self-employment, then such use would not be termed as use for commercial purposes under the Act, and the user is recognised as a consumer. *Examples :* 1.   A buys a truck for plying it as a public carrier by himself, A is a consumer. 2.   A buys a truck and hires a driver to ply it, A is not a consumer. 3.   A has one cloth shop. He starts another business of a photocopier and buys a photocopy machine therefor. He hasn't bought this machine exclusively for the purpose of earning live­lihood. He is not a consumer under the Act. **Services are hired or availed of** - The term 'hired' has not been defined under the Act. Its Dictionary meaning is - to procure the use of services at a price. Thus the term 'hire' has also been used in the sense of 'avail' or 'use'. Accordingly it may be understood that consumer means any person who avails or uses any service. *Example* : A goes to a doctor to get himself treated for a frac­ture. Here A is hiring the services of the doctor. Thus he is a consumer. *What constitutes hiring has been an issue to be dealt with in many consumer disputes.* If it is established that a particular act constitutes hiring of service, the transaction falls within the net of the Consumer Protection Act, and *vice-versa.* *Examples* : 1.   A passenger getting railway reservation after payment is hiring service for consideration. 2. A landlord neglected and refused to provide the agreed amenities to his tenant. He filed a complaint against the land­lord under the Consumer **Beneficiary of services is also a consumer** - When a person hires services, he may hire it for himself or for any other person. In such cases the beneficiary (or user) of these services is also a consumer. *Example* : A takes his son B to a doctor for his treatment. Here A is hirer of services of the doctor and B is beneficiary of these services. For the purpose of the Act, both A and B are consumers. **Note** : This is an exception to the rule of privity to the con­tract. THIRD-PARTY BENEFICIARY ======================= a third-party beneficiary refers to an individual or entity that is not a direct party to a contract but stands to benefit from its execution. The Act recognizes that certain goods and services may directly affect individuals who are not the actual purchasers or parties to the transaction, thus extending certain protections to them. The Act broadens the definition of \"consumer\" to include not only the buyer but also any person who uses the goods or services with the consent of the buyer. This definition covers third-party beneficiaries who may not have directly purchased the goods or services but are affected by them. For example **Family Members:** If a product bought by a family member causes harm to another family member, the affected person can file a complaint under the Act. **Employees and Guests:** In cases where a business purchases a product or service that causes harm to its employees or guests, those affected can also seek redressal. A father purchases a car from a dealership, intending it for family use. The car is primarily driven by his son, who is not the direct purchaser. **The rights of third-party** beneficiaries primarily revolve around their protection and ability to seek redressal for damages caused by defective goods, deficient services, or unfair trade practices, even though they are not direct parties to the contract or transaction. Third-party beneficiaries can file complaints with consumer courts or commissions if they suffer harm or damage due to defective products, deficient services, or unfair trade practices. They are entitled to seek compensation for any loss or injury suffered due to the defective nature of goods or services. This includes compensation for physical harm, property damage, or other losses For example -If a person staying in a hotel experiences harm due to faulty equipment or poor service, even if the booking was made by someone else, they have the right to file a complaint and seek compensation. **WHO IS NOT A CONSUMER?** A person is not a consumer if he/she: purchases any goods or avails any service free of charge purchases a good or hires a service for commercial purpose; avails any service under contract of service **CONSUMER PROTECTION ACT, 2019:** The new Consumer Protection Act was passed by Parliament in 2019. It came into force in July 2020 and replaced the Consumer Protection Act, 1986. Consumer Protection Act, 2019 is a law to protect the interests of the consumers. This Act provides safety to consumers regarding defective products, dissatisfactory services, and unfair trade practices. The basic aim of the Consumer Protection Act, 2019 is to save the rights of the consumers by establishing authorities for timely and effective administration and settlement of consumers' disputes. ### **[NEED FOR THE NEW ACT:]** ### 1. **Addressing Modern Market Challenges** - Rise of E-commerce: With the significant growth of online shopping and digital marketplaces, there was a need to protect consumers from issues like online fraud, counterfeit products, and misleading information on digital platforms. - Digital Transactions: The increase in digital payment methods required additional safeguards for consumer rights, including data privacy and security. ### **[2.]Enhancing Consumer Rights** - Inclusion of New Rights: The Act introduced new consumer rights, such as the right to be heard, the right to be informed, and the right to seek redressal against unfair practices. - Product Liability: It introduced provisions for product liability, holding manufacturers, service providers, and sellers accountable for harm caused by defective products or services. ### 3. **Strengthening Redressal Mechanisms** - Simplified Redressal Process: The Act aimed to simplify the process for consumers to file complaints, making it more accessible and efficient. - Central Consumer Protection Authority (CCPA): The establishment of the CCPA provided a central regulatory authority with the power to investigate complaints, conduct inquiries, and order recalls or withdrawals of unsafe products. ### 4. **Deterring Unfair Trade Practices** - Misleading Advertisements: The Act provided stricter regulations against misleading advertisements and false claims, ensuring that consumers receive accurate information. - Penalties and Fines: It introduced higher penalties for businesses engaging in unfair trade practices or failing to comply with the Act\'s provisions. ### 5. **Consumer Safety and Quality Assurance** - Product Safety Standards: The Act mandated stricter safety and quality standards for goods and services, protecting consumers from harm and ensuring better compliance from manufacturers and service providers. - Recall of Unsafe Products: It empowered the CCPA to order the recall of unsafe products and the discontinuation of unfair practices. ### 6. **Inclusion of New Consumer Rights** - Right to File Complaints from Anywhere: The Act allowed consumers to file complaints with the appropriate forum from their place of residence or work, enhancing convenience. - Unfair Contracts: It provided protections against unfair terms in contracts, ensuring fairness in consumer transactions. ### 7. **Global Alignment and Best Practices** - International Standards: The Act aimed to align India\'s consumer protection laws with global standards, facilitating international trade and consumer confidence in Indian markets. ### 8. **Improved Consumer Awareness** - Educational Initiatives: The Act emphasized the need for consumer education and awareness programs to inform consumers about their rights and responsibilities. OBJECTIVES OF THE CONSUMER PROTECTION ACT, 2019 ----------------------------------------------- The Act\'s main objectives are to protect consumer interests and establish a trustworthy, efficient process for handling customer complaints. - Defend consumers from advertisements of goods that put people\'s lives and property in jeopardy. - To protect consumers from unfair business practices, provide information about the potency, amount, standard, purity, and pricing of the items. - Create Consumer Protection Councils to safeguard customers\' rights and interests. - Whenever possible, ensure that customers can purchase products at fair prices from a reputable vendor. - To protect consumers against any unethical company practices or exploitation and look for remedies in case of such an event. - By selecting authorities for the prompt and adequate administration and resolution of consumer complaints, you can protect your customers. - List the sanctions for breaking the Act. - Pay attention to the consumer's welfare concerns in the event of a problem or conflict, and make sure they are taken into consideration in the proper forums. - It is important to give consumer education so that people are informed of their rights - Deliver quick and efficient customer service through alternative dispute resolution techniques. **RIGHTS OF CONSUMERS UNDER CONSUMERS PROTECTION ACT, 2019** According to the 2019 Consumer Protection Act, consumers have six rights. Following Section 2(9) of the Act, consumers have the following rights: - The right of a customer to be shielded from the promotion of products and services that are risky and harmful to property and life. - The Right of a consumer to be shielded from unfair business activities by being informed about the standard, price, potency, purity, and other characteristics of the commodities, services, or products. - The consumer\'s right to affordable access to a wide range of products, services, and goods. - The right to complain against unfair and constrictive business practices in the appropriate forums. - The right to reasonable payment or another recompense from - The right to fair compensation or consideration from the appropriate consumer forums if the merchant has harmed them. - The appropriate consumer education Difference Between Consumer Protection Act, 1986 and 2019 --------------------------------------------------------- +-----------------------+-----------------------+-----------------------+ | **Basis of | **Consumer Protection | **Consumer Protection | | Differentiation** | Act 2019** | Act 1986** | +=======================+=======================+=======================+ | Definition | Section 2(28) | Section 2(1)(r) → | | | provides an exclusive | Misleading | | | and comprehensive | advertisements can | | | definition of the | also be brought under | | | term. According to | this definition and | | | this definition, | can be treated as an | | | misleading | unfair trade | | | advertisement means | practice. | | | an advertisement that | | | | gives a false | | | | description or a | | | | false guarantee or | | | | misrepresentation or | | | | concealment of | | | | information | | +-----------------------+-----------------------+-----------------------+ | Elements Included | 1\. False | 1\. False statement | | | Description | | | | | 2. Misrepresentation | | | 2\. False guarantee | | | | | | | | 3. Misrepresentation | | | | | | | | 4\. Deliberate | | | | concealment of | | | | important | | | | information | | +-----------------------+-----------------------+-----------------------+ | Powers to respective | 1. Section 21 | Section 14 empowers | | bodies | empowers the | the court to issue | | | Central Authority | directions including | | | to issue | discontinuation of | | | directions and | such advertisements. | | | penalties against | | | | false or | | | | misleading | | | | advertisements. | | | | | | | | A penalty of rupees | | | | 10 lakh is imposed on | | | | the advertiser. | | | | (Subsequent | | | | contravention -- 50 | | | | lakh rupees); An | | | | endorser can be | | | | punished by | | | | prohibiting him from | | | | making any | | | | endorsement for the | | | | next twelve | | | | months(Subsequent | | | | contravention -- 3 | | | | years) Unless such an | | | | endorsement was made | | | | with due diligence; A | | | | penalty of Rupees 10 | | | | Lakhs is imposed for | | | | publishing the | | | | advertisement unless | | | | such an act is done | | | | in the ordinary | | | | course. | | | | | | | | 2\. Section 89 is a | | | | penal provision | | | | that deals with the | | | | punishment to be | | | | awarded to the | | | | manufacturer for | | | | misleading | | | | advertisement which | | | | is up to a term of | | | | 2 years and a fine | | | | of up to 10 lakh | | | | rupees. (Subsequent | | | | contravention: | | | | Imprisonment upto a | | | | term of 5 years and | | | | fine upto 50 lakh | | | | rupees) | | +-----------------------+-----------------------+-----------------------+ | Regulator | Central Consumer | No separate Regulator | | | Protection Authority | | +-----------------------+-----------------------+-----------------------+ | Pecuniary | District -upto 1 Cr | District -upto 20 | | Jurisdiction | | lakhs | | | State- 1 Cr to 10 | | | | crore | State- 20 lakhs to 1 | | | | crore | | | National - 10 Crore | | | | and above | National - 1 Crore | | | | and above | +-----------------------+-----------------------+-----------------------+ **RIGHTS OF THE CONSUMERS:** - Consumers have the right to information on various aspects of goods and services. This could be information about the quantity, quality, purity, potency, price, and standard of goods or services. - To be protected from hazardous goods and services. Right to protection against goods and services that can be dangerous to life and property. - To be protected from unfair or restrictive trade practices. - Consumers have the right to access a variety of goods and services at competitive prices. - Consumers should have the right to redressal. ### SALIENT PROVISIONS OF THE CONSUMER PROTECTION ACT 2019 - New definition of consumer - Central Consumer Protection Authority**:** - onsumer Disputes Redressal Commission - E-Filing of Complaints - Product Liability & Penal Consequences - Penalties for Misleading Advertisement - The Central Consumer Protection Council - Simplified Consumer Dispute Resolution