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Everything You Need to Know About The Consumer Protection Laws in India

IndianMoney.com Research Team | Posted On Wednesday, March 20,2019, 11:42 AM

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Everything You Need to Know About The Consumer Protection Laws in India

 

 

The setting up of a consumer forum is meant to offer relief to consumers and safeguard their interests from unfair market practices like frauds, adulteration and also ensure a redressal mechanism and a legal structure to properly address consumer complaints.

History Of The Consumer Rights:

Consumer rights are not a new concept and have a long history. The practice of customer redressal is followed in many countries and societies. The first instance of protection of customer’s rights can be read from the Old Testament of the Bible which mentions a form of customer protection. Customer rights also find a mention in the Code of Hammurabi. 

The earliest movement for the protection of consumers took off in the United States, which serves as the base for development of monopoly and oligopoly market structure. The primary consumer organizations took off in Denmark in the year 1947 and Great Britain in the year 1955. The government created the consumer council to safeguard consumer rights and employs a system where customers can express themselves on issues related to traders and retailers.

However, the real change came with the implementation of the Single European Act; a modified form of the treaty of Rome. The Act solidifies the role of economic and social committees who are given the power to safeguard the interests of consumers.

Over the years, some important changes were made to the above-mentioned legislation which paved the way for a wider consumer policy. But, despite these additions, it still lacked a solid foundation which focused on consumer protection.

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SEE ALSO:  Consumer Rights

Everything you need to know about the Consumer Protection Laws in India

Historical Development in the International Scenario:

U.S.A:

In the United States, the Government has enacted certain guidelines to prevent degradation of market standards and protect the rights of consumers. To check the concentration of power and its effect on economic development, the Sherman Act was passed in the year 1890. The Act declared every contract which restricts trade as illegal. The Federal Trade Commission act and Clayton Act were passed in the year 1914, to overcome certain monopolistic and restrictive trade practices.

Some essential steps were taken by the government of the United States which shaped the Consumer Protection Act in the year 1962. A Consumer Bill of rights was passed and the main elements of the bill were as follows:

  • Right to choose
  • Right to information
  • Right to safety
  • Right to be heard

United Kingdom:

Consumer Protection Laws were enacted after the Second World War. A series of Acts were passed and enacted between the years 1948 to 1973, like the Monopolies and Restrictive Practices Enquiry and Controls Act, 1948 amended by the Monopolies and Restrictive Practices Act, 1953, the Restrictive Trade Practices Act, 1968; the Resale Price Act, 1964; the Monopolies and Mergers Act, 1965 and the Fair Trading Act, 1973 to curb business malpractices and ensure quality products and services to customers.

The above mentioned acts helped in developing a new and comprehensively organized market environment. The act not only applies to traders and consumers, but is also applicable to other entities like business, professionals, nationalized industries and public undertakings with the aim to empower business and consumers.

Germany:

The anti-monopoly Act was enacted in Germany in the year 1957 and was also known as the Act against Restraint of Competition. There have been a number of amendments to this act. It doesn’t ban monopolies, but states that such practices cannot be used to harm other people.

UN and Guidelines for Consumer Protection:

In the year 1985 the General Assembly of the United Nations adopted guidelines to protect consumers from fraud and cheating. These guidelines were adopted to provide a standard framework for all nations, particularly for developing countries, that could be used in modifying and strengthening consumer protection policies and legislation to protect consumers and also promote international cooperation in this field.

The objective of the guidelines adopted by U.N is discussed below:

  • To help countries in achieving and providing adequate protection to consumers.
  • To facilitate production and distribution arrangements reactive to the needs and desires of consumers.
  • To regulate the distribution and circulation of goods and services to customers.
  • To assist countries in eliminating objectionable and old business practices, extending from enterprises within the country and internationally which adversely affect customers.
  • To encourage the development of self-governing consumer groups.
  • To extend international corporation in the area of consumer protection.
  • To encourage the establishment of market places which provide consumers with greater choices at a reasonable price.

The government should make an attempt to ensure essential goods are offered to consumers, giving due regard to both price and quality. 

SEE ALSO: Consumer Protection Laws in India

History of Consumer Protection Laws in India:

The process of regulating markets and unfair trade practices, exists from the Vedic period. We find a mention on the laws on weights and measures in Arthashastra written by Kautilya. Manu Smriti contains punishments for adulteration in measures and weights. Provisions with regard to sale and purchase transactions are the essence of Yajnavalkya-Samhita, wherein rules have been laid for safeguarding interests of the purchasers and provides him time to evaluate the utility of goods purchased and allows the return of goods found unsuitable or unworthy along with pricing policy and rules on profit sharing.

We also find mention of laws relating to consumer rights in the medieval period. The ancient Hindu codes and the Holy Quran have laws to safeguard ad protect consumers from market malpractices.

After independence, the government focused heavily on the subject of consumer rights and devoted time to frame the laws related to consumer rights. The government wanted to ensure that customers are not subject to business malpractices and make sure they are satisfied with the goods and products purchased.

Listed below are some of the consumer laws to prevent unfair and obnoxious market practices and protect consumers:

  • The Drugs Control Act, 1950
  • The Prevention of Food Adulteration Act , 1954
  • The Essential Commodities Act, 1955
  • The Monopolies And Restrictive Trade Practices Act, 1969
  • The Bureau of Indian Standard Act, 1986
  • The Consumer Protection Act, 1986

Consumer Protection Act, 1986:

The Consumer Protection Act was enacted in the year 1986, with the aim to shield customers against market malpractices and provide a quicker and simpler solution to consumer grievances. The law is effective in dealing with the problems faced by customers. The law is an attempt to diminish the helplessness of customers against powerful and dominant traders and retailers, merchants and businessman and prevent hoarding and black marketing and enacting rules to provide commodities at fair prices.

The Act seeks to promote and protect the interests of consumers against deficiencies and defects in goods or services. It also aims to secure the rights of a consumer against unfair trade practices, which may be practiced by manufacturers and traders. The Act applies to all goods and services, unless specifically exempted by the Union Government and covers all sectors, whether private, public, or co-operative.

Basic Rights of Customers:

Listed below are the basic rights of the customers which include:

  • Right to be protected against marketing of goods and services which are deemed hazardous to life, limb and property.
  • Right to be informed on the quality, quantity, standard and price of goods and services, so as to protect the consumer against unfair trade practices.
  • Right to consumer education.
  • Right to seek redressal against unfair trade practices
  • Right to receive assured access, wherever possible, to a variety of goods and services at competitive prices.
  • Right to be heard and to be assured that consumers interest receives due consideration at appropriate forums.

Consumer Redressal Forum:

The consumer protection act establishes a legal system for safeguarding the rights and interests of the consumers. Under the consumer protection act, every district has at least one consumer forum to address consumer related disputes. The act provides authority to such bodies for providing relief to the consumers/ traders who has been cheated and award appropriate compensation to the victim.

Above the district forum comes the State Redressal Commission. At the center we have National Consumer Disputes Redressal Commission in New Delhi. Cases involving claims of Rs 5 Lakh must be filed with the district consumer forum courts and cases where the claim involves an amount between Rs 5 Lakh and Rs 20 Lakh must be filed with the state commission. Cases involving claims of more than Rs 20 Lakh must be filed with the National Consumer Court.

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