CONSUMER
PROTECTION IN INDIA
WHO OR WHAT
IS A CONSUMER?
A consumer is an entity which purchases goods and services and is engaged in
evaluating, acquiring, and using them to satisfy his needs and wants. A
consumer is a key figure in the market and all activities are carried on around
this person.
Consumers today are informed and
self-determined, critical and responsible (or they should be this way) . They are citizens, who express their ideas
of a good and just life through their choices on the market. On the other hand consumers are helpless and trusting.
Consumer protection is important because
consumers in any modern market economy often experience information asymmetry
and a significant imbalance of bargaining power as compared to producers and
sellers of products and services.
In competitive markets, producers and
sellers must gain new sales, new clientele by satisfying consumer needs through
increasing the range of choices available, since if consumers dislike the
offerings of one producer/seller, they might turn to others. This is because
the availability of substitutable goods at acceptable prices in competitive
markets enables consumers to shift purchases, which pushes each producer/seller
to try to meet consumer preferences.
However, producers/sellers may not always
act competitively and very often would resort to unfair means, for example
offering low-quality products at lower prices or misleading the consumers to
believe that the products offered are of good quality. As a result, consumer
interests are affected. Not only consumers do not receive a fair value for
their money, their health and safety could also be adversely affected by the
unsafe or defective products and services.
Hence the need for interventions, either
by governmental consumer protection agencies, consumer associations or
organizations, or any other relevant stakeholders, in accordance with rules and
regulations laid down to protect the legitimate interests of consumers.
According
to the Consumer Protection Act (Section 2d) a consumer is any person
(i)
buys any goods for a consideration which has
been paid or promised or partly paid and partly promised, (buying on credit- esp regular basis) or under any system of deferred
payment, and includes any user of such goods other than the person who buys
such goods for consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment when such use is made with
the approval of such person, but does not include a person who obtains such
goods for resale or for any commercial purpose; or
(ii)
hires or avails of any services for a
consideration which has been paid or promised or partly paid and partly promised,
or under any system of deferred payment, and includes any beneficiary of such
services other than the person who hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or under
any system of deferred payment, when such services are availed of with the
approval of the first mentioned person
Let us try to understand the meaning
of these provisions:
The person who claims to
be the consumer should be satisfied that THE GOODS HAVE BEEN BOUGHT FOR A
CONSIDERATION. It should be the outcome of a contract between the buyer and the
seller
The word
goods here is as per Sale of Goods Act and the words consideration, buyer and
seller is as per Indian Contract Act.
A person who uses the goods with the approval
of the buyer is the consumer. Here the Act indicates that the buyer’s family
friends and associates using the product would also fall under the purview of
the term consumer.
THERE IS ONE
EXCEPTION TO THE ABOVE. IF THE GOODS ARE USED FOR RESALE OR COMMERCIAL PURPOSE
THEN THE PERSON USING THE GOODS WILL NOT BE THE CONSUMER EVEN IF THE GOODS HAVE
BEEN BOUGHT BY THE BUYER PERSONALLY
“Commercial purpose”
does not include use by a consumer of goods bought and used by him exclusively
for the purpose of earning his livelihood, by means of self-employment.
On
the other hand if the goods are bought for the purpose of self employment, even
then the buyer is the consumer. Such purchase satisfy the following criteria :
- the
goods are used by the buyer himself;
- exclusively
for the purpose of earning his livelihood;
- by
means of self-employment,
then such use would
not be termed as use for commercial purposes under the Act, and the user is
recognised as a consumer.
The above applies for
the consumption of goods while the consumer of services applies where
a.
services are hired or availed of
b.
the services are hired or availed for
a consideration
c.
payment for hiring the service is
fully or partly paid
d.
the services may be hired for self
or for any other person
A PERSON IS NOT A CONSUMER IF THERE IS
NO CONSIDERATION FOR THE SERVICE HIRED
The issues relating to consumer welfare
affects the entire 1.17 billion people since everyone is a consumer in
one way or the other. Ensuring consumer welfare is the
responsibility of the government. Accepting this, policies have been framed and
the Consumer Protection Act, 1986, was introduced. A separate
Department of Consumer Affairs was also created in the Central
and State Governments to exclusively focus on ensuring the rights of consumers
as enshrined in the Act. This Act has been regarded as the most
progressive, comprehensive and unique piece of legislation. In the
last international conference on consumer protection held in
Malaysia in 1997, the Indian Consumer Protection Act was
described as one “which has set in motion a revolution in the fields of consumer rights,
the parallel of which has not been seen anywhere else in the world.”
The
special feature of this Act is to provide speedy and inexpensive redressal to
the grievance of the consumer and provide him relief of a
specific nature and award compensation wherever appropriate. The aim of
the Act is also to ensure the rights of the consumer, viz. the right of
choice, safety, information, redressal, public hearing and consumer education.
The Act
defines the consumer as one who purchases goods and services for
his/her use. The
user of such goods and service with the permission of the buyer is also a consumer.
However, a person is not a consumer if he purchases goods and
services for resale purpose.
An
average Indian consumer is noted for his patience and tolerance. Perhaps because
of these two traditional traits and due to the influence of the Mahabharata,
the Ramayana and the Bhagavad Gita, he considers the receipt of
defective goods and services as an act of fate or unfavourable planetary
position in his horoscope.When a new television or refrigerator purchased
by him turns out to be defective from day one, he takes it reticently, blaming
it on his fate or as the consequence of the wrongs committed by him in his
previous birth. Very often he is exploited, put to avoidable inconveniences and
suffers financial loss. It is rather paradoxical that the customer is
advertised as the “king” by the seller and service provider, but in actual
practice treated as a slave or servant. Goods are purchased by him
along with the label “Items once sold by us will never be received back under
any circumstances whatsoever.”
Every consumer in
his own interest has to realize his role and importance in the right
perspective. Each citizen in a democracy derives his power at the time of
elections and exercises it through the ballot. In a competitive
economic environment the consumer has to exercise his choice either
in favour of or against the goods and services. His choice is going to
be vital and final. He should realize his importance and prepare himself to
exercise his rights with responsibility. It is very often stated “Customer
is sovereign and consumer is the King.” If that is really so, why do
we have the Consumer Protection Act? Why is there a need for
protecting the King? Should it not be rightly called “Consumer Sovereignty
Act”? It is for the consumers to decide. After all the dictum in
democracy is, the citizens get a government they deserve. Similarly the consumers
in society get a position in the market depending upon what they do or do not
do. It is agreed on all hands that “consumer empowerment” in India
has a long way to go.
Problems
faced by Consumers in the Market
In
modern times, a lot of efforts have made to protect the interest of consumer by
government and non-government organization.In spite of this, the exploitation
of consumers has not come to an end, and they are being be fooled by business
interests at all levels.It must be remembered that their exploitation will not
come to an end unless they themselves come forward to protect and promote their
own interest.
1. Lack of Information
Very often consumers
do not get proper and timely information. The information may be about the
arrival of new product or service, availability of a product; Changes in the
existing product, etc. In the absence of information consumers may not be able
to make proper decisions of purchasing product or services.
2. Malpractices by Suppliers
Malpractices by
suppliers create serious problems for consumers. Suppliers engaged in
antisocial activities like black marketing, hoarding, profiteering, etc. Spoil
the relations between the buyer and sellers.
3. Irregular Supply
Consumer faces the
problem of irregular supply. Especially in case of necessities unsystematic
supplies create serious shortages. Many times the irregularities are deliberate
and exploitative, caused by hoarding and black marketing.
4. Not Heard Properly
Consumers often feel
that they are not heard properly. Their complaints, grievances and doubts are
not carefully attended to and not promptly redressed or clarified by suppliers
of goods and providers of services.
5. Wrong Weight & Measures
Consumers in this
world are cheated by traders and others with false weight and Measures. The
customers are cheated with false weights and measures in an unorganized market.
Even in the organized markets such as shopping malls, customers are cheated
with wrong weights pasted on the packets.
6. Poor after-Sale-Service
Consumer in this
world, after sale service is very poor. Even the Multinational corporations in
this world do not provide effective after-sale-service in the case of office
equipment, and consumer durables. Customers have to give constant reminders for
after-sale-service. At many times, customers have to get the equipment repaired
or serviced by third party even during the service contract period due to poor
after-sale-service.
7. Problem of Duplicate Goods
Consumer in this
world, the customers face a major problem of duplicate goods. Unethical
producers duplicate popular brand names, and thereby customers get cheated.
Even products like medicines are duplicated by illegal producers.
8. Problem of Delivery of Goods
Customers also face
the problem of delivery of goods. There are cases, where customers have to book
in advance certain products, and they are promised a specific delivery date.
However, in spite of repeated reminders, they do not get delivery of goods on
time.
9. Unethical Advertising
Many businessmen
resort to unethical practices in advertising. They make fall claims about the
benefits of the product. They do not disclose true information. Consumers fall
prey for such practices and get cheated.
10. No proper Return for Money
Many a time consumer
feels that they do not get proper returns for the price they have paid to buy
the products. This may be due to inferior quality, less durability,
adulteration, unsatisfactory packing, etc.
11. Health & Safety Hazards
Many a time customers
face problems of health hazards when they buy goods in the shops. For instance,
shopkeepers sell products even after the expiry date; fruit vendors use
chemicals to ripen the fruits faster; manufacturers use inferior quality of
materials to keep the prices low; and so on.
12. Poor Quality of Sales Personnel
Many times customers
find that the sales personnel cannot give proper information about the products
because they are not given appropriate training by their employers. Sometimes
such persons exaggerate the merits of the products and force the customers to
buy products, which may not be needed by the customers
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