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Consumer Protection Bill Cleared by Union Cabinet: Six Things You Should Know

Among other things, the Consumer Protection Bill, 2017 has tough provisions against misleading celebrity endorsements

In a significant development, the Union Cabinet on Wednesday cleared the Consumer Protection Bill 2017, which will now be tabled in Lok Sabha during the current Winter Session.

This is important because this new bill is expected to completely overhaul the current laws stipulated under the archaic Consumer Protection Act, 1986. Reports indicate that the new bill takes into account the changing nature of the Indian economy, which has seen growing consumer awareness and a marked evolution of the economic landscape, especially in the online sphere.

The current bill will replace the one tabled in 2015, which was sent for vetting to a parliamentary standing committee. In the new bill, the changes sought by the committee have been included.

For representational purposes (Source: Flickr)
For representational purposes (Source: Flickr)

As per news reports, here are some of the features of the new Consumer Protection Bill:

1) For the first time, India will have a Central Consumer Protection Authority, which will act as a national regulator for the protection of consumer rights. Designed along the lines of the United States Federal Trade Commission, this agency will have the power to take suo moto action against companies indulging in unfair trade practices to the detriment of consumers.

2) Reports indicate that the bill will introduce class action lawsuits to India, which means that a group of people with the same or similar injuries caused by the same product or action, can sue the company as a group. If the verdict goes in their favour, all consumers in the group stand to benefit.

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3) In the event of a consumer suffering from injury, death or damage resulting from any defect in the product as a result of faulty manufacturing, construction, design, testing, packaging and labelling, among other facets of the production process, the manufacturing company will be held liable.

4) One of the key new features of the bill are provisions dealing with disputes that pertain to online purchase. At present, the law isn’t clear on refunds or dispute settlement for online shoppers. Moreover, under the present law, a consumer can only proceed with legal action against a seller only at the place where the transaction in question is said to have occurred. If the new bill passes, the consumer can file a complaint electronically or at the consumer court closest to his/her residence.

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5) The new bill also has provisions that subscribe hefty penalties and jail terms for adulteration and misleading advertisements by companies. Moreover, celebrities found to endorse such advertisements are liable to pay a hefty fine, endure a ban on any endorsement and even suffer a jail term.

“On misleading ads, the bill provides for fine and ban on celebrities. In case of the first offence, the fine will be up to Rs 10 lakh and a one-year ban on any endorsement. For the second offence, the fine will be up to Rs 50 lakh and up to three years’ ban,” says this report by the Press Trust of India.

For manufacturers, the penalty is a Rs 10 lakh fine and a two-year jail term for the first offence. Repeat offenders will suffer fines up to Rs 50 lakh and a five-year prison term, the PTI report adds. Adulteration, meanwhile, could incur a life-term jail sentence.

6) In a bid to deter consumers from filing false or frivolous complaints, the bill seeks to raise the penalty from Rs 10,000 to Rs 50,000.

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