12 E

Chapter – 12

                             

                       
                        A customer is the most important person in our premises.

He is not dependent on us, we are dependent on him.

He is not an interruption in our work; he is a purpose of it.

He is not an outsider of our business; he is a part of it.

We are not doing him a favour by serving him.

He is doing us a favour by giving us an opportunity to do so

------ Mahatma Gandhi

Consumer is said to be the king in a free market economy. The earlier approach of “Caveat emptor” (let the buyer beware) has been changed to “Caveat venditor” (let the seller beware).

With the growing competition and to push up the sales, businessmen indulge in exploitative and unfair trade practices which include supply of defective and unsafe products, adulteration, false and misleading advertising, hoarding, black marketing etc., so there arises the need for providing protection to consumers.

Consumer - Definition

Consumer Protection Act, 1986 defines a customer is an individual or organization who buys goods and services for a consideration.

Some other definitions for consumer are as follows:

1.    The person who buys any goods for a consideration.

2.    A person who hires or avails of any services for a consideration.

Importance of Consumer Protection

Consumers point of view:

1.  Consumer ignorance – In usual practice, consumers are innocent and ignorant about their rights and reliefs against unfair trade practices. Consumer protection protects them through consumer education.

2.    Unorganized consumers – Consumers need to be organized in the form of consumer organizations which would protect their interest.

3.    Consumer exploitation – Consumers need protection against unfair trade practices like defective and unsafe products, black marketing, hoarding, adulteration etc.

Business point of view:

1.Long term interest of business – Satisfied customers only provide repeat sales, but also give good feedback to the prospective customers. This will help to increase sales.

2.Use of resources from the society – As the business makes use of society’s resources, it has the obligation to give reasonable return to the nation and its people.

3.Social responsibility – A business has social responsibilities towards different groups like shareholders, employees, etc. Therefore it should not be an exploiter but must be a servant.      

      4. Moral justification – It is the moral duty of any business to protect the interest of consumers. Exploitative, and unfair trade practices must be avoided.

      5. Government intervention – A business engaging in any form of exploitative trade practices would invite government intervention.

Legal protection to consumers

1.    Consumer Protection Act (CPA) 1986 – It gives protection against defective goods, unfair trade practices and all other exploitation. It provides for protection of consumer rights and redressal of consumer disputes. It also provides for the setting up of a three-tier machinery – District Forums, State Commissions and the National Commission.

2.    The Contract Act 1982 – This Act specifies the remedies available in case of breach of contract.

3.    The Sale of Goods Act 1930 – It assures some safeguards to buyers of goods in case the goods do not conform to the implied conditions or warranties.

4.    The Essential Commodities Act 1955 – This Act suggests for action against anti-social activities of profiteers, hoarders and black marketers.

5.    The Agricultural Produce (Grading and Marking) Act 1937 – It lays down the procedure for grading, marking and packing of agricultural products. The quality mark is known as AGMARK.

6.    The Prevention of Food Adulteration Act 1954 – To check adulteration of food items and to ensure their purity.

7.    The Standards of Weights and Measurers Act 1976 – It gives protection to consumers against the malpractice of underweight or under measure.

8.    The Trade Marks Act 1999 – This Act prevents the use of fraudulent marks (duplicate trademarks of other companies) on products.

9.    The Competition Act 2002 – This Act replaced the MRTP Act 1969 (Monopolies and Restrictive Trade Practices). It gives protection to consumers in case policies adopted by business firms hamper competition in the market.

10. The Bureau of Indian Standards Act 1986 – The Bureau has two sets of activities –

 (1)Formulation of quality standards and (2) Certification through BIS. By this, producers can use ISI mark on their products only if the products meet the prescribed quality. Also there is a grievance cell under the bureau accepts complaints from consumers.

Common unfair trade practices

·	Adulteration	·	Exorbitant price
·	Black marketing	·	Misleading advertisement
·	False weights	·	Duplication of brands

  ·    Poor quality

Consumer Rights

Right to safety – Consumers have the right to be protected against the goods which are hazardous to health and safety. Manufacturing defects in electrical goods, pressure cookers etc. may endanger the life of consumers.

2.  Right to be informed – It implies that the producer should disclose all the facts regarding his products. Information as to the quantity, quality, price, date of manufacture, ingredients, precautions of use etc. should be give n.

3.  Right to choose – It implies that consumer has the chance to choose from the alternatives, the producer should not take away the right through aggressive selling techniques.

4.    Right to be heard – Every consumer would like to be assured that complaints or grievances regarding a product or service will be considered.

5.    Right to seek redressal – When the consumers are cheated or exploited they have the right to get compensation.

6.    Right to consumer education – A consumer can get prot ected against fraud and malpractices only with the help of knowledge and proper education, he should know the rights and remedies available to him. It is possible only with proper consumer education.

Consumer Responsibilities

1.    Awareness about various goods and services available in the market, so that an intelligent and wise choice can be made.

2.    Consumer must exercise his right – Consumers must be aware of their own rights with regard to the products or services they buy from the market.

3.    Cautious consumer – Before purchasing, the consumer should insist on getting complete information on quality, quantity, price, utility etc. of the goods.

4.    Filing complaints for redressal of genuine grievances – Sometimes, consumers ignore the deception (dishonesty) of traders believing that the loss is small. This attitude encourages corrupt business practices to continue.

5.    The consumer must b e quality conscious – While making purchases, he should look for quality certification. Only products having ISI, Agmark, B IS, ISO etc. should be purchased.

1.      ISI – Indian Standards Institute (Manufactured Goods)

2.      Food Process Order (Food Products)

3.      BIS Hallmark (Jewellery)

4.      Agmark (Agricultural Products)

5.      Eco-mark (Environment - friendly Products)

6.    Understand the risks – associated with the products, follow strictly the instructions.

7.    Be honest – Go in for only legal goods and services and discou rage illegal marketing.

8.  Insist on cash memo – If there is any defect in the gooods purchased and the consumer has to make a complaint, the cash memo must be produced as proof of purchase. A seller is bound to give cash memo.

9.    File complaints – if a ny in appropriate consumer forum, even if the amount involved is very small.

    10.  Educate consumers – Take initiative to educate consumers about their rights.

Ways and means of consumer protection

1. Self regulation by business – Firms with social commitment follow ethical standards and good practices in serving the customers. Such firms have set up their customer service and grievance cells to redress the grievances of their customers.

2.    Business Associations – Federation of Indian Chambers of Commerce, (FCCI), Confederation of Indian Industries (CII), etc. lay down their code of conduct for their members to deal with consumers.

3.    Consumer awareness – A consumer aware of high rights will be in a position to raise his voice against unfair trade practices.

4.    Consumer organizations – These organizations can take necessary steps to eliminate consumer exploitation and force the business firms to avoid unfair trade practices.

5.  Government – Government is always protecting the interest of consumers by implementing rules and regulations in the form of various laws and Acts. Also it provides a three tier system of District Forum, State Commission and the Natinal Commission for redressal of consumer grievances.

Who can a file a complaint under the Act?

1.     A consumer.

2.     Any voluntary consumer association, registered under the Companies Act, 1956 or under any other law.

3.    The Central Government.

4.    The State Government.

5.    One or more consumers, where there are numerous consumers having the same interest.

6.    A legal heir or representative of a deceased consumer.

Redressal Agencies under the CPA 1986

There is a three-tier grievance redressal system for enforcement of the rights of the consumers, they are:-

	1. District Forum	2.	State Commission		3. National
					Commission
a.  Established by State Govt.		a.  Established by State		a.  Established by
b.	In all the Districts		Govt.		Central Govt.
		b.	In all the States	b.	Only at national
c.	Entertain the complaints				level.
	where value of goods or	c.  Above 20 lakhs but
	service and compensation		less than 1 crore.	c.	1 crore or more.
	claimed up to 20 lakhs.
d.  Appeal to State Commission		d.  Appeal to National		d.  Appeal to Supreme
	within 30 days of order from		Commission within		Court within 30 days
	District Forum		30 days of order		of order from
			from State		National
			Commission.		Commission.

Relief available through redressal agencies

a.    Removal of defects.

b.    Replacement of goods or service.

c.    Return of price by seller.

d.    Payment of compensation by seller for the loss suffered.

e.    Discontinuance of unfair trade practices.

f.     Withdrawal of hazardous goods.

g.    To issue corrective advertisement to neutralize the effect of a misleading advertisement.

Role of Consumer Organisations and NGOs

1.    Bringing out brochures, Journals and Monographs (book which is a detailed study of one subject).

2.    Accelerating consumer awareness.

3.    Collecting data on different products and testing them.

4.    Arranging talks, seminars, workshops and conferences for the purpose of focusing the problems of consumers and finding solutions.

5.    Encouraging consumers for boycotting goods which are defective and bad quality.

6.    Filing suits on behalf of consumers.

7.    Investigating into problems of consumers.

8.    Resisting against price rigging (dishonesty), adulteration, black marketing etc.

9.    To produce films on food adulteration, misuse of drugs and cosmetics.

10. To educate women regarding consumerism.

11. To help business to standardize their products.

12. Helping schools to start consumer education.

Prominent Consumer Organization in India

·         Consumer Coordination Council, Delhi.

·         Consumer guidance society of India (CGSI), Mumbai.

·         Citizens Action group, Mumbai.

·         Consumer Education and Research Centre (CERC) Ahammedabad.

·         Common Cause, New Delhi.

·         Consumer Unity and Trust Society (CUTS), Jaipur.

·         Voluntary Organization in Interest of Consumer Education (VOICE).

·         Consumer Action Forum, Kolkatta, Delhi and Chennai.

·         Consumer Protection Council, Ahamedbad.