In December 2017, during a discussion in the Rajya Sabha, Vice-President Venkaiah Naidu narrated an anecdote about how he was duped by a fake weight-loss advertisement.
“Soon after becoming the Vice President , I came across an advertisement of a medication that promised to help lose a certain amount of weight in a certain amount of time,” Naidu recalled. “The advertisement asked for some one thousand rupees, so I paid,” he said.
He never received the medicine.
Responding to the Vice-President’s plea, Consumer Affairs Minister Ram Vilas Paswan issued a statement promising that a bill on consumer protection, which protects Indian consumers.
A year later on December 20, the Lok Sabha passed that bill and it will now be taken up for discussion in the Rajya Sabha.
The bill seeks to replace the Consumer Protection Act, 1986, which is more than three decades old and has itself undergone amendments on three separate occasions. However, it has remained unable to address the challenges presented by online transactions, multi-level and digital marketing.
1) In a significant development, the bill offers greater scope for a class action suit, where manufacturers or service providers may not necessarily be held liable to just one customer or group of customers, but all customers affected by that potentially defective product or service.
2) The bill labels e-commerce firms as service providers, thus clearly outlining their scope for liability in the event of a defective service or product. These firms will have to share more information with the consumers, and transparently disclose how they treat consumer data.
3) Any celebrity or famous personality misleading customers through false advertisements will be held accountable with a fine. “For false and misleading advertisements, a penalty of up to Rs 10 lakh may be imposed on a manufacturer or an endorser. For a subsequent offence, the fine may extend to Rs 50 lakh. The manufacturer can also be punished with imprisonment of up to two years, which may extend to five years in case of every subsequent offence,” says this PRS Legislative explainer.
4) If a consumer files a fake complaint with the authority, a fine of Rs 10,000 to Rs 50,000 will be applicable.
5) The Bill seeks to establish a Central Consumer Protection Authority (CCPA) to “promote, protect and enforce the rights of the consumers.” They can address complaints of “unfair trade practices, issue safety guidelines, order product recall or discontinuation of services, refer complaints to other regulators, and has punitive powers such as imposing penalties.”
6) It also seeks to set up Consumer Disputes Redressal Commissions at national, State and district-levels to look into consumer complaints. For faster redressal of dispute, Consumer Mediation Cells would be established along the same line.
7) “The Bill also envisages provisions for product liability action on account of harm caused to consumers due to a defective product or by a deficiency in services. For example, a consumer can sue the cab aggregator if the taxi comes late and as a result, they miss a scheduled flight. Also, the case can be filed from anywhere, unlike the existing law which allows the consumer to register the complaint only from the same place of purchase of the product or where the service is availed,” according to this explainer by The Hindu.
8) “The Act also recognises offences such as unfair trade practices, which include providing false information regarding the quality or quantity of a good or service, and misleading advertisement,” says this PRS Legislative breakdown of the Consumer Protection Bill.
9) If a person does not comply with orders of the Commissions, he may face imprisonment up to three years, or a fine not less than Rs 25,000 extendable to Rs one lakh, or both.
10) “The CCPA may also impose penalties for manufacturing, selling, storing, distributing or importing adulterated products,” says the bill. If a consumer suffers injury, the penalty against the manufacturer is a Rs 3 lakh fine and imprisonment up to one year. Grievous injury would entail fine up to Rs 5 lakh with imprisonment up to seven year. In the event of death, however, penalty goes up to Rs 10 lakh with imprisonment up to seven year, but extendable to life imprisonment.
(Edited by Gayatri Mishra)