Consumer Protection

Consumer protection refers to the set of laws, institutions, and administrative mechanisms designed to safeguard buyers of goods and services—and the public at large—from unfair trade practices, fraud, exploitation, and misinformation in the marketplace.

The underlying idea is that in a market economy, consumers are the weaker party due to:

  • Information asymmetry
  • Limited bargaining power
  • Technical complexity of products and services

Therefore, the State intervenes to ensure fair competition, transparency, accountability, and informed consumer choice. Importantly, consumer protection laws may also safeguard non-consumers, such as by ensuring product safety for the general public.

Need for a Consumer Protection Mechanism

Ensuring Quality of Products

Consumer protection laws help safeguard consumers from substandard, defective, or unsafe products, thereby protecting health, safety, and economic interests.

Preventing Fraudulent Practices

Many businesses adopt fraudulent practices such as:

  • Deceptive warranties
  • False claims
  • Hidden charges

A legal framework is necessary to ban such unfair trade practices and penalize violators.

Effective Grievance Redressal

Consumers require accessible, affordable, and time-bound mechanisms to resolve complaints without excessive legal complexity.

Protection of Consumer Rights

Consumer protection ensures enforcement of key rights such as:
  • Right to information
  • Right to choice
  • Right to seek redressal
  • Right against unfair trade practices

Faster Dispute Resolution

Conventional courts are overburdened. Dedicated consumer fora provide speedy, specialized, and cost-effective dispute resolution outside the regular judicial system.

Uniting Consumers

While traders and businesses are often organized, consumers are fragmented. Consumer protection mechanisms collectivize consumer interests, enabling class action and collective redress.

Preventing Hoarding and Artificial Scarcity

Consumer laws deter hoarding of essential commodities, which creates artificial scarcity and leads to price rise, harming public interest.

Steps Taken by the Government

Consumer Protection Act, 1986

The Consumer Protection Act, 1986 marked a turning point by:

  • Establishing a three-tier consumer dispute redressal system
  • Recognizing six consumer rights
  • Providing an inexpensive and summary procedure for justice

Consumer Protection (Amendment) Act, 2019

The Consumer Protection Act, 2019 modernised the framework to address contemporary challenges:

  • Expansion of consumer rights, including:
    • Right to information on additional aspects
    • Right to file complaints from anywhere
    • Right to seek compensation under product liability
  • Coverage of e-commerce under the Act
  • Expanded definition of unfair trade practices, including:
    • Failure to issue bills or receipts
    • Refusal to accept goods returned within 30 days
    • Unlawful disclosure of personal data
  • Jurisdictional flexibility: Complaints can be filed where the consumer resides
  • Mediation as an ADR mechanism to promote consensual dispute resolution
  • Establishment of the Central Consumer Protection Authority to promote, protect, and enforce consumer rights
  • Revised pecuniary jurisdiction of consumer commissions (subsequently rationalised by rules):
    • District Commission
    • State Commission
    • National Commission

E-Daakhil Portal

The E-Daakhil Portal enables consumers to:

  • File complaints online
  • Track case status
  • Access forums without physical presence

This strengthens digital governance and ease of access to justice.

Consumer Protection (e-Commerce) Rules, 2020

These rules:
  • Prevent sellers from refusing refunds or returns
  • Prohibit manipulation of prices
  • Mandate transparency by e-commerce platforms

They address platform-based market power and consumer vulnerability.

Guidelines on Prevention of Misleading Advertisements, 2022

These guidelines regulate:
  • Misleading claims
  • Surrogate advertising
  • False endorsements

They strengthen accountability of advertisers and endorsers.

National Consumer Helpline (NCH)

The National Consumer Helpline:

  • Has witnessed a tenfold rise in calls between 2015 and 2024
  • Offers pre-litigation support in 17 languages
  • Allows complaints via INGRAM portal, WhatsApp, SMS, email, app, and web platforms

Consumer Awareness Campaigns

The Department of Consumer Affairs runs:
  • Jago Grahak Jago campaign
  • Jagriti mascot, to educate consumers using simple and relatable messaging

These initiatives focus on consumer empowerment through awareness.

Challenges in Consumer Protection

Case Pendency

There are over 5.5 lakh pending consumer cases, including thousands pending since before 2000, undermining speedy justice.

Lack of Remedy for Producers

The law provides limited relief to producers affected by product recalls, which can:

  • Cause long-term reputational damage
  • Create financial distress even when intent is not malicious

Violation of Advertising Norms

Despite strict guidelines, misleading advertisements continue, especially in:

  • Online gaming platforms
  • Fantasy sports and betting-related promotions

Arm-Twisting During Mediation

Mediation, though beneficial, may allow stronger parties to pressure weaker consumers, raising concerns of equity.

Vacancies in Consumer Commissions

Over 250 vacancies at the district commission level weaken institutional capacity and delay justice.

Way Forward

Performance-Based Ranking

District consumer commissions can be ranked based on disposal rate and efficiency, fostering competition and accountability.

Strong Executive Intervention

Swift executive action is needed to ensure compliance with → Advertising guidelines, Tele-marketing norms, Multi-level marketing regulations

Enhancing Consumer Awareness

Greater use of → Social media, Jagriti mascot, Regional language campaign → to ensure consumers are aware, informed, and vocal.

Guidelines for Celebrity Endorsements

There is a need for specific guidelines for celebrity endorsements of → Unhealthy food, Alcohol, Online gaming → to protect vulnerable consumers, especially children.

Emphasising Duties of Consumers

Along with rights, consumers must exercise duties such as → Filing complaints, participating in class actions, Engaging in consumer activism

This strengthens the institutional ecosystem of consumer protection.

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