govt-to-establish-central-consumer-protection-authority

Recently, the government has decided to set up the Consumer Protection Authority under the Consumer Protection Act 2019. Union Minister of Consumer Affairs, Food and Public Distribution also consulted industry representatives about the role and functioning of a proposed CCPA.

Background:  

Definition of the consumer according to Consumer Protection Act 2019: A consumer is defined as a person who buys any goods or avails a service for a consideration.  It does not include a person who obtains a good for resale or a good or service for commercial purposes. It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling. 

Consumer protection act 2019:

  • It seeks to strengthen consumer rights and provides a mechanism for redressal of complaints regarding defects in goods and deficiency in services.
  • The Act replaced The Consumer Protection Act, 1986, and seeks to widen its scope in addressing consumer concerns. 

Six consumer rights have been defined under the act:

  1. Right to Safety: Right to be protected against the marketing of goods and services which are hazardous to life and property.
    1. The act also specifies the action to be taken if goods and services are found “dangerous, hazardous or unsafe.
  2. Right to be informed: Right to be informed of the quality, quantity, potency, purity, standard and price of goods or services.
  3. Right to choose: Right to access a variety of goods and services at a competitive price.
  4. Right to be heard:  Right to be represented in various forums formed to consider the consumer's welfare.
  5. Right to consumer education: the right to acquire the knowledge and skill to be an informed consumer throughout life.
  6. Right to grievance redressal: right to seek redressal against unfair or restrictive trade practices.

Consumer Protection Authority: 

  • To promote, protect and enforce the rights of consumers.  
  • Regulating authority: To regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.  
  • Investigation wing: The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.

Functions of the Central Consumer Protection Authority (CCPA):

  • Inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum.
  • Passing orders to recall goods or withdraw services that are hazardous, reimbursement of the price paid, and discontinuation of the unfair trade practices.
  • Issuing directions to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher.
  • Penalties for misleading advertisement: The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.  In case of a subsequent offense, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
  • issuing safety notices to consumers against unsafe goods and services.

Disputes Redressal Mechanism: Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels. 

Product liability: Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.

Establishment of Consumer Protection authority: It is constituted under Section 10(1) of The Consumer Protection Act, 2019.

  • CCPA aims to protect the rights of the consumer by cracking down on unfair trade practices, and false and misleading advertisements that are detrimental to the interests of the public and consumers.
  • CCPA will ensure that all standards on packaged food items set by regulators such as the Food Safety and Standards Authority of India (FSSAI) are being followed.
  • Issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services.

Possible structure of CCPA: 

  • Small Body with 3 members:  Chief Commissioner as head, and two other commissioners as members.One of whom will deal with matters relating to goods while the other will look into cases relating to services.
  • Headquarter: National Capital Region of Delhi with regional offices.
  • Investigation Wing: It will be headed by Director-General. District Collectors will have the power to investigate complaints of violations of consumer rights, unfair trade practices, and false or misleading advertisements as well.

Powers of CCPA during the investigation: 

  • Powers under Code of Criminal Procedure, 1973 for search and seize: to enter any premise and search for any document or article, and to seize.
  • CCPA can file complaints of violation of consumer rights or unfair trade practices before the District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission, and the National Consumer Disputes Redressal Commission.

Defined “ Misleading advertisements”: providing false information regarding the quality or quantity of a good or service.

If goods or services are not meeting the “standards”?

  • Recall/withdrawal of goods or services: Under Section 20 of The Consumer Protection Act, the proposed authority will have powers to recall goods or withdrawal of services that are “dangerous, hazardous or unsafe.
  • Refund the prices of goods or services.

How will CCPA  deal with false or misleading advertisements?

  • Section 21 of Consumer Protection act 2019: CCPA may issue directions to the trader, manufacturer, endorser, advertiser, or publisher to discontinue such an advertisement or modify it in a manner specified by the authority, within a given time. The authority may also impose a penalty up to Rs 10 lakh, with imprisonment up to two years, on the manufacturer or endorser of false and misleading advertisements. 
  • For every subsequent offense committed by the same manufacturer or endorser, the penalty may go up to Rs 50 lakh, with imprisonment up to five years.
  • CCPA may ban the endorser

What are the penalties for the manufacture, selling, storage, distribution, or import of adulterated products?

  • If the injury is not caused to a consumer, fine up to Rs 1 lakh with imprisonment up to six months.
  • If the injury is caused, fine up to Rs 3 lakh with imprisonment for up to one year.
  • If grievous hurt is caused, fine up to Rs 5 lakh with imprisonment up to 7 years.
  • In case of death, fine of Rs 10 lakh or more with a minimum imprisonment of 7 years, extendable to imprisonment for life.

Also readThe Consumer Protection Bill Passed

Consumer Protection Bill 2019

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