Consumer Protection Notes Class 12 Business Studies

Consumer Protection

Summary Concept and Importance of Consumer Protection Consumer Protection Act 1986 Meaning of consumer Rights of consumers Responsibilities of consumers Who can file a complaint? Redressal machinery Remedies/reliefs available Role of NGOs and Consumer Organisations

 

Consumer protection refers to providing education to consumers about their rights and responsibilities and helping them in getting their grievances redressed. 

Importance of Consumer Protection

Importance of Consumer Protection from Consumers’ Point of View

1. Consumer Ignorance: It is necessary to educate the customers about the rights and   reliefs available so as to achieve consumer awareness. 

2. Unorganised Consumers: Consumers need to be organised in the form of consumer organisations which would protect and promote the interests of the consumers.

3. Widespread Exploitation of Consumers: Consumers need protection against malpractices of the sellers.

Importance of Consumer Protection from Businessman’s Point of View

1. Long-term Interest of Business: It is in the long-term interest of the business to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer-base of business. 

2. Business uses society’s resources: Business organisations use resources which belong to the society. Thus, they have a responsibility to provide such products and services which are in public interest. 

3. Social Responsibility: It is the social responsibility of the business to take care of interests of its customers. 

4. Moral Justification: It is the moral duty of any business to take care of consumer’s interest and avoid any form of their exploitation.

5. Government Intervention: If a business organisation voluntarily takes care of its customers, it can avoid government interference and action.

Ways and Means of Consumer Protection

There are various ways in which the objective of consumer protection can be achieved:

1. Self-Regulation by business: By following ethical practices in dealing with its customers. 

2. Business Associations: By laying down the code of conduct involving guidelines to be followed by their members while dealing with the customers. 

3. Consumer Awareness: By being well informed about the rights and reliefs available to them.

4. Consumer Organisations: By forcing the business firms to avoid malpractices and exploitation of consumers.

5. Government: By enacting various measures, rules and Acts. 

CONSUMER PROTECTION ACT, 1986

The Consumer protection Act seeks to protect and promote the consumers’ interest through speedy and inexpensive redressal of their grievances. The scope of the Act is very wide. It is applicable to all types of undertakings, big and small, whether in the private or public sector, or in the co-operative sector, whether a manufacturer or a trader, and whether supplying goods or providing services.  The Act confers certain rights to consumers with a view to empowering them and to protect their interests.

Meaning of a Consumer:
A ‘consumer’ is generally understood as a person who consumes goods or avails any service. A person who buys goods for commercial purpose or resale will not be considered to be a consumer.

Under the Consumer Protection Act, a consumer is defined as:

1. Any person who buys any goods for a consideration, which has been paid or promised. It includes any user of such goods, when such use is made with the approval of the buyer, but does not include a person who obtains goods for re-sale.  

2.  Any person who avails any service for a consideration which has been paid or promised. It includes any beneficiary of services when such services are availed of with the approval of the person concerned, but does not include a person who avails of such services for any commercial purpose.

Rights of a Consumer:

1. Right to Safety: The consumer has a right to be protected against goods and services which are harmful to life and health.

2. Right to Choose: The consumer has the freedom to choose from a variety of products at competitive prices.

3. Right to be Informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, directions for use, etc.

4. Right to be Heard: The consumer has a right to file a complaint in case of dissatisfaction with a good or a service.

5. Right to Seek Redressal: The consumer has a right to get reliefs in case the product or service falls short of his/her expectations.

6. Right to Consumer Education: The consumer has a right to acquire knowledge and to be a well-informed consumer throughout life. He should be aware about his rights and the reliefs available to him. 

 

Responsibilities of a Consumer

A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services:

1. Be aware about various goods and services available in the market.

2. Buy only standardised goods and check for standardisation marks. 

3. Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely.

4. Read the labels carefully.

5. Assert yourself to ensure that you get a fair deal.

6. Be honest in your dealings.

7. Ask for a cash memo on purchase of goods or services.

8. File a complaint in an appropriate consumer forum in a case of a shortcoming in the quality of goods purchased or services availed.

9. Form consumer societies which would play an active part in educating consumers and safeguarding their interests.

10. Respect the environment.
    
    

Who can file a complaint?

• Any consumer

• Any registered consumer’s association

• The Central Government or any State Government.

• One or more consumers, on behalf of numerous consumers having the same interest.

• A legal heir or representative of a deceased consumer.

REDRESSAL AGENCIES UNDER THE CONSUMER PROTECTION ACT

For the redressal of consumer grievances, the Consumer Protection Act provides for setting up of a three-tier machinery at the District, State, and the National levels.

 

1. District Forum

• It comprises of three members who are appointed by the State Government concerned, namely, a President and two other members, one of whom should be a woman.

• A complaint can to be made to the appropriate District Forum when the value of the goods or services does not exceed Rs 1 crore.

• In case the aggrieved party is not satisfied with the order of the District Forum, he can appeal before the State Commission within 45 days of the passing of the order. 

 

2. State Commission

• Each State Commission comprises of a President and not less than two other members, one of whom should be a woman. They are appointed by the State Government concerned.

• A complaint can to be made to the appropriate State Commission when the value of the goods or services exceeds Rs. 1 crore but does not exceed Rs. 10 crore.

• In case the aggrieved party is not satisfied with the order of the State Commission, he can appeal before the National Commission within 30 days of the passing of the order.

 

3. National Commission

• The National Commission consists of a President and at least four other members, one of whom should be a woman. All the members are appointed by the Central Government.

• A complaint can to be made to the National commission when the value of the goods or services exceeds Rs. 10 crore.

• In case the aggrieved party is not satisfied with the order of the National Commission, he can appeal before the Supreme Court within 30 days of the passing of the order.

 

Reliefs Available to a Consumer

If the consumer court is satisfied about the genuineness of the complaint, it can issue one or more of the following directions to the opposite party.

1. To remove the defect in goods or deficiency in service.

2. To replace the defective product.

3. To refund the price paid for the product or service.

4. To pay a reasonable amount of compensation. 

5. To pay punitive damages in appropriate circumstances.

6. To discontinue the unfair trade practice.

7. Not to offer hazardous goods for sale.

8. To withdraw the hazardous goods from sale.

9. To cease manufacture of hazardous goods and to desist from offering hazardous services.

10. To pay any amount (not less than 5% of the value of the defective goods or deficient services provided), to be credited to the Consumer Welfare Fund or any other organisation/person.

11. To issue corrective advertisement to neutralise the effect of a misleading advertisement.

12. To pay adequate costs to the appropriate party.

 

Role of Consumer Organisations and NGOs in Promoting Consumer Protection

1. Educating the general public about consumer rights.

2. Educating consumers through various publications.

3. Conducting comparative testing of consumer products.

4. Encouraging consumers to strongly protest wherever necessary.

5. Filing complaints on behalf of the consumers.

6. Providing legal help to consumers in seeking legal remedy.

7. Being proactive in filing cases in consumer courts in the interest of the general public.

 

Some of the examples of Consumer Organisations and NGOs

• Common Cause, Delhi

• Voluntary Organisation in Interest of Consumer Education (VOICE), Delhi

• Consumers’ Association, Kolkata.