CHAPTER 5 CONSUMER PROTECTION

1. CHAPTER 5 CONSUMER PROTECTION

2. INDEX

3. INTRODUCTION There is a very popular phrase – “Consumer kenaammein hi ‘mer’ (death) likhahain”. It is said that the “consumer is the king” but in real sense the consumer suffers the most.

4. INTRODUCTION Distributors Dealers Wholesalers Retailers MANUFACTURERS With help of Marketing & Advertising

5. Resort to practices like SUBSTANDARD GOODS PVR MOVIE TICKETS @ ₹350 POPCORN ₹150 ! SAMSOSA ₹ 50 !?? AQUAFINA ₹ 40! HOARDING CARTELS CHARGING EXCESSIVELY HIGH !!!

6. INTRODUCTION All consumers are fully dependent on manufacturers/producers to satisfy their wants. Most of the consumers are not aware of their rights. Many consumers have a “chaltahain” attitude because of which even if they are exploited, they will not complain or act against it. Further, the consumers are confused due to the growing size of production and complexity of distribution systems, selling techniques & advertising forms. The consumers are not united. The manufacturers/sellers take advantage of this situation and cheat or exploit the consumer. CHALTA HAI!

7. INTRODUCTION Therefore, protection of consumer is important. It becomes necessary to have a machinery to ensurefairprices, better choice and greater access to important goods and services. Various steps are being taken by NGOs and government to protect consumers.

8. WHO IS A CONSUMER ? Any person who consumes or uses any commodity or service available from natural source or through the market is known as a consumer. The word ‘consumer’ is derived from Latin word “consumere” which means ‘to eat or drink’.

9. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) IGNORANCE OF CONSUMERS MARKET DOMINATED BY SELLERS PARTICIPATION OF CONSUMERS IS LACKING OVERALL RATE OF CONSUMPTION HAS INCREASED REQUIRED INFORMATION IS LACKING TENDENCY OF CONSUMERS ATTITUDE OF CONSUMERS NATURE OF PRODUCTS CONSUMERS ARE UNORGANIZED

10. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) IGNORANCE OF CONSUMERS The consumers get exploited due to their ignorance about their rights, product details, market conditions, price etc. The consumers get cheated because they lack complete knowledge. e.g.: Shopkeepers may even sell off some expired goods to illiterate and ignorant customers.

11. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) MARKET DOMINATED BY SELLERS • If the market is dominated by the sellers, then they take all the decisions which favour the sellers, middlemen and manufacturers. The sellers do not give preference to consumer welfare. Consumer has to accept the terms as decided by sellers.

12. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) PARTICIPATION OF CONSUMERS IS LACKING Many decisions directly affecting consumer’s interest are taken without their or their organizations’ consent. The decisions taken by the association of sellers or traders are generally one sided where the consequences of the decision on the consumers are not considered at all.

13. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) OVERALL RATE OF CONSUMPTION HAS INCREASED The population as well as an increase in overall standard of living of people has resulted in increase in consumption. To satisfy huge demand, it is necessary for manufacturers to undertake large scale production. Since the manufacturers are aware that the demand is always going to keep increasing, they increase prices, exploit consumers and undertake unfair trade practices etc.

14. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) REQUIRED INFORMATION IS LACKING In the modern world the distance between the consumer and the producer is vast. It is impossible to get information from producers directly. There are various domestic and imported products in the market. The consumer relies more on advertisements of the products, other’s experiences or on trial and error method to decide about the product. As a result, his chances of getting exploited are high.

15. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) TENDENCY OF CONSUMERS It is a normal tendency of consumers to rush to shopping outlets where high rate of discount is provided on goods. Most of the consumers get attracted to cheap products, schemes, discounts, sale etc. However, sellers may sell sub-standard goods in such cases or they may inflate the price of goods and then give high discounts on the goods. As a result, the consumer may get exploited and he may not even come to know about it. E.g.: A seller may charge Rs. 2000 for a bag priced at Rs. 1000 earlier and then give a 50% discount on the inflated price. In the end, he gets his Rs. 1000 but the consumer is exploited.

16. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) ATTITUDE OF CONSUMERS One of the biggest reasons of exploitation of consumers is their attitude. Most consumers have a “chaltahain” attitude due to which even if they are exploited, they will not complain or act against it. The sellers therefore take advantage of this situation and continue to exploit the consumer. E.g..: A consumer may sometime get a t-shirt which has a small hole in it but then he may not complain to the seller regarding the same.

17. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) NATURE OF PRODUCTS Due to complicated manufacturing processes and the technical knowledge involved, poor and illiterate consumers are unable to judge the quality or safety aspects of a product. The producers take advantage of this situation and try to exploit consumers. E.g.: There are various powders/capsules that have been introduced in the market recently which claim to increase weight/efficiency of a person. However, the safety of such products is still unknown.

18. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) CONSUMERS ARE UNORGANIZED Sellers & traders have their own associations. However, consumers do not have any union. They are unorganized and are not united. A single consumer cannot fight against the powerful and united sellers. Thus, it becomes easy for sellers to exploit the consumers. Did you know?? There is even a Salon and Beauty Parlours Association (SBPA) in Maharashtra which has around 75000 parlour owners as it members. They meet on regular basis and discuss issues.

19. IMPORTANCE OF CONSUMER PROTECTION (IMPORTANC) To sum up … What is the importance of consumer protection • Ignorance of Consumers • Market dominated by sellers • Participation of consumers is lacking • Overall rate of consumption has increased • Required information is not easily available Tendency of consumers Attitude of consumers • Nature of Products Consumers are unorganized

20. RIGHTS OF CONSUMERS (RIGHTS CHE) 15th March is observed as ‘ConsumerRightsDay’ throughout the world as the President of USA (Mr. John F. Kennedy) had declared certain consumer rights on this day in 1962. Since then, some more rights have been added by the “International Organization of Consumers Union”. The Consumer Protection Act, 1986 also incorporates all these rights of the consumers. The various rights of consumers are:- [SMART CODE: RIGHTS CHE] • RIGHT TO REDRESSAL • RIGHT TO INFORMATION • RIGHT TO PROTECT AGAINST SPURIOUS GOODS • RIGHT TO BE HEARD • RIGHT TO PROTECT AGAINST UNFAIR TRADE PRACTICES • RIGHT TO SAFETY • RIGHT TO CHOOSE • RIGHT TO HEALTHY ENVIRONMENT • RIGHT TO EDUCATION

21. RIGHTS OF CONSUMERS (RIGHTS CHE) 1. RIGHT TO REDRESSAL • A consumer will not get justice just by filling a complaint. Therefore, the Right to Redressal was recognized. The right enables a consumer to seek redressal against unfair trade practices or exploitation. This right assures proper legal recourse to attend to a consumer’s complaint and get it redressed (solved). • For this purpose, the District Forum, State Commission and National Commission have been established under the Consumer Protection Act, 1986. The consumer is entitled to compensation in case he suffers any loss.

22. RIGHTS OF CONSUMERS (RIGHTS CHE) 2. RIGHT TO INFORMATION PRICE • The Right to Information gives every consumer the right to get correct information about the price, quality, purity, quantity, ingredients, date of manufacturing, date of expiry, etc. of the goods purchased. • The consumer should also be instructed about the use of the product and the risks/consequences involved in improper use of the product. • Every product should contain all this information on the wrapper or the outer packing. • In case of technical goods, there should be an instruction manual. It should also contain the consequences that would occur if the product is not used correctly. • Right to Information helps consumer in selecting the right product and take more informed decision. It assures safety of the consumer and the product both. PURITY QUALITY

23. RIGHTS OF CONSUMERS (RIGHTS CHE) 3. RIGHT TO PROTECT AGAINST SPURIOUS GOODS • This right protects the consumers against marketing of spurious and hazardous goods which pose a danger to public health and life. • This right was incorporated by the Amendments Act, 2002. • E.g.: Companies cannot advertise liquor or cigarettes directly. For liquor, they advertise the water or soda (Bagpiper) which they manufacture or like Seagram – “Have I made it large” campaign or Imperial Blue – “Men will be men” campaign.

24. RIGHTS OF CONSUMERS (RIGHTS CHE) 4. RIGHT TO BE HEARD • Every consumer has the right to be heard and file a complaint. This right allows a consumer express his views (i.e. be heard) about any product or service bought by him. This right assures that the grievances (complaints) of the consumer are heard and he receives proper hearing at the right forums. • E.g.: Certain companies claim that using their air conditioners or lights will help to reduce electricity consumption of the consumer. However, even after using the same, if the electricity consumption of the consumer does not reduce, he can file a complaint against such company.

25. RIGHTS OF CONSUMERS (RIGHTS CHE) 5. RIGHT TO PROTECT AGAINST UNFAIR TRADE PRACTICES • This right offers protection to consumers against any kind of unfair trade practices like wrong measurements, overcharging, artificial shortages, selling defective goods etc. This right was incorporated by the Amendments Act, 1993.

26. RIGHTS OF CONSUMERS (RIGHTS CHE) 6. RIGHT TO SAFETY • This right protects the consumers against marketing of goods and services which are hazardous to their life and property. In other words, the trader has to ensure that the goods sold will not cause any damage to life or property of the consumer. • If the product is hazardous in nature then detailed information should be given about how to use the product. It should also contain the consequences that would occur if the product is not used correctly. • E.g.: The instruction manual of an electric cooker, microwave, gas stove etc. contains details about the use of the product since these products are hazardous in nature. • Sometimes the product becomes hazardous after its sale. In such instances, the Right to Safety expects the manufacturer or the trader to take back the product or modify it or compensate the consumer for the damage. • E.g.: Honda Motors (USA) recalled around 15,000 cars in 2014 after its sale when they found out that the airbags (protection balloon) in the car were faulty. • Care has to be taken in case of ordinary goods as well. • E.g.:A general store should not stock bread after its expiry date.

27. RIGHTS OF CONSUMERS (RIGHTS CHE) 7. RIGHT TO CHOOSE • There is variety of products available in the market today and the consumer should be able select a product of his choice. • E.g. There are many brands of toothpaste or soap available in market. • The Right to Choose enables a consumer to select a suitable product from among the available variety in the market, at a competitive price, based on his budget and need. • At times, a seller may force for a product because it may give him higher margin or there is more unsold stock. However, no seller can force the customer to buy a particular product. This right restricts any seller from creating a monopoly situation in the market.

28. RIGHTS OF CONSUMERS (RIGHTS CHE) 8. RIGHT TO A HEALTHY ENVIRONMENT • The consumer has a right to live in a healthy and pollution free environment in the present as well as in the future. If any industrial activity is creating air or water pollution then society can object to it and can also file public interest litigation (PIL).

29. RIGHTS OF CONSUMERS (RIGHTS CHE) 8. RIGHT TO A HEALTHY ENVIRONMENT • This right entitles the consumer to know about • consumer rights, • market malpractices • remedies against the same. • Consumer education makes consumers more aware about unfair trade practices and ways in which they can protect themselves. The government, media and NGO’s can play a major role in educating consumers. • E.g.: JaagoGrahakJaago Campaign.

30. To sum up… The Rights of a Consumer RIGHT TO REDRESSAL RIGHT TO INFORMATION RIGHT TO PROTECT AGAINST SPURIOUS GOODS RIGHT TO BE HEARD RIGHT TO PROTECTED AGAINST UNFAIR TRADE PRACTICES RIGHT TO SAFETY RIGHT TO CHOOSE RIGHT TO HEALTHY ENVIROMENT RIGHT TO EDUCATION In short , RIGHTS CHE

31. RESPONSIBILITIES OF A CONSUMER Any person who consumes or uses any commodity or service available from natural resources or from the market is known as a consumer. It is necessary to protect consumers against exploitation. However, government cannot help them unless they take up a responsibility. A responsible consumer is the one who takes active part in consumer protection. While exercising the consumer rights, the consumer is expected to act responsibly and take an active role in the consumer movement.

32. RESPONSIBILITIES OF A CONSUMER • The following are the responsibilities of a consumer:- • [SMART CODE: SAVE WS] • SOCIAL CONCERN • ACTIVE • VALUE BEFORE BUYING (CRITICAL AWARENESS) • ENVIRONMENTAL CONCERN • WORKING TOGETHER • SUSTAINABLE CONSUMPTION

33. RESPONSIBILITIES OF A CONSUMER 1. SOCIAL CONCERN A consumer has to be aware of the impact of the goods and services he uses on the citizens. He should ensure that the products & services which he uses are not produced in an environment that harms others.

34. RESPONSIBILITIES OF A CONSUMER 2. ACTIVE A consumer has to be assertive (confident) and ensure that he gets a fair deal. If he remains passive, he is bound to be exploited. He should raise a voice if anything wrong is happening. E.g.: If a medicine shop sells expired medicine, he should point out that to the seller. Also, consumer should not compromise his culture and customs for getting fair deal. EG: CHECKING THE EXPIRY DATE BEFORE BUYING

35. RESPONSIBILITIES OF A CONSUMER 3. VALUE BEFORE BUYING (CRITICALAWARENESS) A consumer has to be alert and question regarding the quality and price of the goods & services he buys. He should listen to the seller carefully and get complete information. He should be able to assess whether the product he is buying is ‘value for money’, ‘value for people’ and ‘value for environment’.

36. RESPONSIBILITIES OF A CONSUMER 4. ENVIRONMENTAL CONCERN A consumer has to be aware of the impact that the goods and services he uses on the environment. The consumer should recognize his individual and collective responsibility to conserve natural resources. He also has to ensure that the goods and services he uses and their disposal does not harm the environment. E.g.: A responsible consumer should prefer eco-friendly notebooks over normal notebooks which involves cutting of trees.

37. RESPONSIBILITIES OF A CONSUMER 5. WORKING TOGETHER A consumer should shoulder the responsibility of promotion and protection of consumer interests. The consumers should organize themselves and work together for the welfare of all consumers. Organized consumers are more powerful than single consumer.

38. RESPONSIBILITIES OF A CONSUMER 6. SUSTAINABLE CONSUMPTION It may happen many times that a consumer buys lots of goods which he does not even require. In order to manufacture a product, lots of natural resources are utilized. These resources are scarce. Therefore, a consumer should ensure that he actually requires a particular product and only then buy it. He should not let goods and services go waste.

39. IMPORTANT POINTS A consumer should take care of the following: Before buying While buying After buying

40. BEFORE BUYING : • Planning in advance • Enquire about past performance of product or service. • Enquire about past performance of the product seller or service provider • Go through product reviews in newspaper and websites. • Note: • Now, there are many e-commerce website which allow products to be compared to each other. This makes the job of the consumer easy.

41. WHILE BUYING : • Asking for demonstration about how to operate or use the product. • Enquiring about after sales service and ensuring availability & contact details of service centre. • Insisting on approved sale bill with all details of product. • Getting a signed warranty / guarantee card from the dealer

42. AFTER BUYING : • Using products as per instructions given in user manual. • Storing the product as mentioned on the cover or manual. • Keeping bills and guarantee card safely. • In case of a fault inform the dealer or service centre. • Seek immediate redressal if there is a deficiency in product

43. WAYS AND MEANS OF CONSUMER PROTECTION • Inspite of the Consumer Protection Act and various other legislations, consumer exploitation is still going on. Producers & sellers only project the image that ‘Consumer is the King’ but they ultimately exploit the consumers. • Hence, apart from judiciary system, following ways and means are adopted to protect consumer: • LOK ADALAT • PUBLIC INTEREST LITIGATION (PIL) • REDRESSAL FORUMS • AWARENESS PROGRAMMES • CONSUMER ORGANISATIONS • CONSUMER WELFARE FUND • LEGISLATIVE MEASURES

44. LOK ADALAT • LokAdalat is referred to as People’sCourt. It is a mock court held by State Authority, District Authority, Supreme Court Legal Service Committee, High Court Legal Service Committee or Taluka Legal Service Committee. It is established by the government to settle disputes by compromise. • LokAdalat accepts pending cases from regular courts which can be settled by compromise only if • Both parties agree to transfer the case to LokAdalat or • One party makes an application and the court sees any chance of compromise.

45. LOK ADALAT In order to fight a case in LokAdalat, no court fees are charged. All the resolutions of disputes by LokAdalat get statutory recognition. Matters that are not solved by LokAdalat are returned back to regular court.   Railways, electricity boards (MSEB), telephone exchanges (MTNL), insurance companies in public sector hold LokAdalats regularly. Example of case of LokAdalat: On 23 December 2013, LokAdalat ordered the BEST administration to pay a compensation of Rs. 26.50 lakh to the victim of bus accident.

46. PUBLIC INTEREST LITIGATION (PIL) This scheme enables any person in the interest of the public to approach a court of law. A PIL is a method of providing legal recourse to consumers. A PIL is not for individual interest but for the benefit of a particular group [e.g. Consumers]. A PIL lies before the high court. Example of PIL: In 2003, a PIL was filed against Pepsi and Coca Cola in Madras High Court. The PIL seeks to stop the dealers of these companies from selling and transporting their products in Tamil Nadu. This PIL was filed because as per a research report, the soft drinks contained pesticide residue above prescribed limits.

47. REDRESSAL FORUMS The District Forum, State Commission and National Commission are the agencies through which consumer disputes are redressed. The Supreme Court is the final court of appeal. Regular courts take lot of time in giving decisions. Theseforums are set up for speedy & inexpensive redressal of complaints.

48. AWARENESS PROGRAMMES To increase the level of consumer awareness, Government of India has adopted many publicity measures. This awareness is done by journals, newspapers, magazines, advertisements etc. Besides, various consumer related programmes are telecast on various radio and TV channels. The society observes 15th March as World Consumer Rights Day and 24th December as National Consumer Day.

49. CONSUMER ORGANIZATIONS Consumer organisations are playing a very active role in consumer movement by educating consumers about their rights. The consumer organizations also help the consumers to fight for their rights through campaigning, lobbying and through protests. Thus, they strengthen the consumer movement. Some voluntary consumer organizations in India are: Mumbai Grahak Panchayat, Mumbai Consumers Association of India, Chennai Voluntary Organization in Interest of Consumer Education (VOICE) and many more…

50. CONSUMER WELFARE FUND This fund is created by Department of Revenues. It provides monetary assistance to the consumer movement especially in rural areas. These funds are used for consumer education, complaint handling, counseling and guidance.