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.

Read about the important acts in India from the linked article.

Given below is a gist of the Consumer Protection Act, 2019:

Enactment August 9, 2019

Date:

Act Year: 2019

Short Title: The Consumer Protection Act, 2019

Long Title: An Act to provide for protection of the interests of consumers and for the
said purpose, to establish authorities for timely and effective administration
and settlement of consumers’ disputes and for matters connected
therewith or incidental thereto

Ministry: Ministry of Consumer Affairs, Food and Public Distribution

Department: Department of Consumer Affairs

Need for the new act:

• The Digital Age has ushered in a new era of commerce and digital branding, as
well as a new set of customer expectations. Digitisation has provided easy
access, a large variety of choices, convenient payment mechanisms,
improved services and shopping as per convenience. However, there are also
associated challenges related to consumer protection.
• To help address the new set of challenges faced by consumers in the digital
age, the Indian Parliament passed the landmark Consumer Protection Bill, 2019
 which aims to provide timely and effective administration and settlement of
consumer disputes.

Consumer Protection Act 2019 Details:

• 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.

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:

• The new Act has widened the definition of ‘consumer’.

Definition of consumer:

• As per the Act, a person is called a consumer who avails the services and buys
any good for self-use. Worth to mention that if a person buys any good or
avails any service for resale or commercial purposes, he/she is not considered
a consumer. This definition covers all types of transactions i.e. offline and
online through teleshopping, direct selling or multi-level marketing.

Central Consumer Protection Authority:

• The Act proposes the establishment of the Central Consumer Protection

Authority (CCPA) as a regulatory authority.
• The CCPA will protect, promote and enforce the rights of consumers and
regulate cases related to unfair trade practices, misleading advertisements,
and violation of consumer rights.
 • CCPA would be given wide-ranging powers.
• The CCPA will have the right to take suo-moto actions, recall products,
order reimbursement of the price of goods/services, cancel licenses,
impose penalties and file class-action suits.
• The CCPA will have an investigation wing to conduct independent
inquiry or investigation into consumer law violations.

To get the List of important Acts that Transformed India for the upcoming
UPSC exam preparation, candidates can visit the linked article.

Consumer Disputes Redressal Commission:

• The Act has the provision of the establishment of Consumer Disputes Redressal
Commissions (CDRCs) at the national, state and district levels to entertain
consumer complaints.
• As per the notified rules, the State Commissions will furnish information to the
Central Government on a quarterly basis on vacancies, disposal, the pendency
of cases and other matters.
• The CDRCs will entertain complaints related to:
• Overcharging or deceptive charging
• Unfair or restrictive trade practices
• Sale of hazardous goods and services which may be hazardous to life.
• Sale of defective goods or services
• As per the Consumer Disputes Redressal Commission Rules, there will be no fee
for filing cases up to Rs. 5 lakh.

E-Filing of Complaints:

• The new Act provides flexibility to the consumer to file complaints with the
jurisdictional consumer forum located at the place of residence or work of the
consumer. This is unlike the earlier condition where the consumer had to file a
complaint at the place of purchase or where the seller has its registered office
address.
• The new Act also contains enabling provisions for consumers to file complaints
electronically and for hearing and/or examining parties through video-
conferencing.
• Consumers will also not need to hire a lawyer to represent their cases.

Product Liability & Penal Consequences:

• The Act has introduced the concept of product liability.

 • A manufacturer or product service provider or product seller will now be
responsible for compensating for injury or damage caused by defective
products or deficiency in services.
• This provision brings within its scope, the product manufacturer, product
service provider and product seller, for any claim for compensation. The term
‘product seller’ would also include e-commerce platforms.

Penalties for Misleading Advertisement:

• The CCPA may impose a penalty on a manufacturer or an endorser, for a false

or misleading advertisement. The CCPA may also sentence them to
imprisonment.

Provision for Alternate Dispute Resolution:

• The new Act provides for mediation as an Alternate Dispute Resolution

mechanism. For mediation, there will be a strict timeline fixed in the rules.
• As per the recently notified rules, a complaint will be referred by a Consumer
Commission for mediation, wherever scope for early settlement exists and
parties agree to it. The mediation will be held in the Mediation Cells to be
established under the aegis of the Consumer Commissions. There will be no
appeal against settlement through mediation.

Unfair Trade Practices:

• The new Act has armed the authorities to take action against unfair trade
practices too.
• The Act introduces a broad definition of Unfair Trade Practices, which also
includes the sharing of personal information given by the consumer in
confidence unless such disclosure is made in accordance with the provisions
of any other law.
The Central Consumer Protection Council:

• The Consumer Protection Act empowers the Central Government to establish

a Central Consumer Protection Council. It will act as an advisory body on
consumer issues.
• As per the notified Central Consumer Protection Council Rules, the
Central Consumer Protection Council would be headed by the Union
Minister of Consumer Affairs, Food and Public Distribution with the
Minister of State as Vice Chairperson and 34 other members from
different fields.
• The Council, which has a three-year tenure, will have a Minister-in-
charge of consumer affairs from two States from each region – North,
South, East, West, and NER. There is also a provision for having working
groups from amongst the members for specific tasks.
Applicability:

• This Act is applicable to all the products and services, until or unless any
product or service is especially debarred out of the scope of this Act by the
Central Government.

Consumer Protection Act 2019 Significance:

Empowering consumers:

• The new Act will empower consumers and help them in protecting their rights
through its various rules and provisions. The new Act will help in safeguarding
consumer interests and rights.
• Consumer-driven businesses such as retail, e-commerce would need
to have robust policies dealing with consumer redressal in place.
• The new Act will also push consumer-driven businesses to take extra
precautions against unfair trade practices and unethical business
practices.

Inclusion of the e-commerce sector:

• The earlier Act did not specifically include e-commerce transactions, and this
lacuna has been addressed by the new Act.
• E-commerce has been witnessing tremendous growth in recent times.
The Indian e-commerce market is expected to grow to US$ 200 billion
by 2026.
• The Act also enables regulations to be notified on e-commerce and direct
selling with a focus on the protection of interests of consumers. This would
involve rules for the prevention of unfair trade practices by e-commerce
platforms.
• As per the notified rules, every e-commerce entity is required to provide
information relating to return, refund, exchange, warranty and
guarantee, delivery and shipment, modes of payment, grievance
redressal mechanism, payment methods, the security of payment
methods, charge-back options, etc. including country of origin which
are necessary for enabling the consumer to make an informed decision
at the pre-purchase stage on its platform.
• The e-commerce platforms will 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. This will bring
e-commerce companies under the ambit of a structured consumer
redressal mechanism.
• E-commerce entities that do not comply will face penal action.
Time-bound redressal:

• A large number of pending consumer complaints in consumer courts have

been common across the country. The new Act by simplifying the resolution
process can help solve consumer grievances speedily.
• A main feature of the Act is that under this, the cases are decided in a limited
time period.

Responsible endorsement:

• The new Act fixes liability on endorsers considering that there have been
numerous instances in the recent past where consumers have fallen prey to
unfair trade practices under the influence of celebrities acting as brand
ambassadors.
• This will make all stakeholders – brands, agencies, celebrities, influencers and
e-commerce players – a lot more responsible. The new Act would force the
endorser to take the onus and exercise due diligence to verify the veracity of
the claims made in the advertisement to refute liability claims.

Upholding consumer interests:

• For the first time, there will be an exclusive law dealing with Product Liability.
• Product liability provisions will deter manufacturers and service providers from
delivering defective products or deficient services.
• The new legislation empowers the National Consumers Dispute Redressal
Committee as well as the State Commission to declare null and void any terms
of a contract while purchasing a product. This will go a long way in protecting
consumers, who are often subject to contract conditions that favour a seller or
manufacturer.

Alternate dispute redressal mechanism:

• The provision of Mediation will make the process of dispute adjudication

simpler and quicker.
• This will provide a better mechanism to dispose of consumer complaints in a
speedy manner and will help in the disposal of a large number of pending
cases in consumer courts across the nation.
Simplified process for grievance redressal:

• The new Act would ease the overall process of consumer grievance redressal
and dispute resolution process. This will help reduce inconvenience and
harassment for the consumers.
• The enhanced pecuniary jurisdiction and provisions providing statutory
recognition to mediation processes, enabling filing of complaints from any
 jurisdiction and for hearing parties through video-conferencing will increase
accessibility to judicial forums and afford crucial protection in times when
international e-commerce giants are expanding their base.

Consumer Protection Act 2019 Concerns:

State regulation:

• As part of the Consumer Protection Act, 2019, the Ministry of Consumer Affairs
will compile a code of conduct for advertisers and agencies, a move designed
to curb unfair practices and misleading claims. The planned code will detail
penalties for advertisers and their agencies and publishers if misleading
advertising and false claims are found.
• There have been concerns that this approach would mark a move from self-
regulation to a more federated oversight.

Implementational challenges:

• The existing vacancies at the district commission level would undermine the
effective implementation of the new Act.

Lack of differentiated approach:

• As per the proposed rules for the e-commerce businesses, companies are not
allowed to “manipulate the price” of goods and services offered on their
platforms to gain unreasonable profit or discriminate between consumers of
the same class or make any arbitrary classification of consumers affecting
their rights under the Act.
• The clause on the manipulation of price by e-commerce companies appears
irrelevant as sometimes, the e-commerce companies would want to reduce
the price to enhance sales volume. For a country with market size of around
$25 billion, the guidelines should have taken a deeper view of the e-commerce
ecosystem, covering all prevailing business models between consumers,
marketplaces and sellers.