A Critical Analysis Consumer Protection Act 2019: A Comparative Study With USA & UK by: Arathi Unnikrishnan
A
Critical Analysis Consumer Protection Act 2019: A Comparative Study With USA
& UK
Authored by: Arathi Unnikrishnan
2050444
School of Law,
Christ (Deemed to be University) Bangalore
Introduction: -
Consumer protection is the practice
of safeguarding buyers of goods and services against unfair practices in the
market. It refers to the steps adopted for the protection of consumers from
corrupt and unscrupulous malpractices by the sellers, manufacturers, service
providers, etc. and to provide remedies in case their rights as a consumer have
been violated.
The Consumer Protection Act of 2019
governs the administration of consumer rights protection in India. To replace
the Consumer Protection Act of 1986, the Consumer Protection Act of 2019 was
proposed. The new Act includes several provisions that consider the
difficulties faced by contemporary, technologically dependent customers. The
Act also includes several clauses aimed at advancing and defending consumer
rights.
By establishing Consumer Protection
Councils to resolve disputes should they occur and to give adequate
compensation to consumers if their rights have been violated, the Act aims to
better protect the rights and interests of consumers. Additionally, it offers
quick and efficient handling of customer concerns through alternative dispute
resolution procedures. The Act also encourages consumer education to inform
consumers of their rights, obligations, and options for resolving complaints.
RESEARCH PROBLEM: -
In the current consumer protection
act 2019, mandatory services, water supply etc provided by state authorities
are not covered in this act. This act only covers two clauses regarding supply
of hazardous products. Consumer protection act don’t empower consumer redressal.
RESEARCH QUESTION: -
Whether there is a rift between
judicial and non-judicial member of the consumer courts or not?
RESEARCH OBJECTIVE: -
1. To determine the rights and
responsibility of the consumer.
2. To critically analyze the consumer
protection Act of 1986 and 2019.
3. To understand the changes
incorporated in consumer protection act 2019.
4. To do a comparative study of laws of
UK and US.
Objectives of Consumer Protection
Act, 2019
The main objective of the Act is to
protect the interests of the consumers and to establish a stable and strong
mechanism for the settlement of consumer disputes. The Act aims to:
Ø
Protect against the marketing of
products that are hazardous to life and property.
Ø
Inform about the quality, potency,
quantity, standard, purity, and price of goods to safeguard the consumers
against unfair trade practices.
Ø
Establish Consumer Protection
Councils for protecting the rights and interests of the consumers.
Ø
Assure, wherever possible, access to
an authority of goods at competitive prices.
Ø
Seek redressal against unfair trade
practices or unscrupulous exploitation of consumers.
Ø
Protect the consumers by appointing
authorities for timely and sufficient administration and settlement of
consumers’ disputes.
Ø
Lay down the penalties for offences
committed under the Act.
Ø
Hear and ensure that consumers’
welfare will receive due consideration at appropriate forums in case any
problem or dispute arises.
Ø
Provide consumer education, so that
the consumers can be aware of their rights.
Ø Provide speedy and effective disposal of consumer complaints through
alternate dispute resolution mechanisms.
Changes Incorporated in Consumer
Protection Act:
The changes that were incorporated
with the enactment of the Consumer Protection Act, 2019 are:
1.
The District Commissions will have
the jurisdiction to entertain complaints where the value of the goods, services
or products paid as consideration to the seller does not exceed 50 lakh
rupees.
2.
State Commissions will have the
jurisdiction to entertain complaints where the value of the goods, services or
products paid as consideration to the seller exceeds 50 lakh rupees but does
not exceed two crore rupees.
3.
The National Commission will have the
jurisdiction to entertain complaints where the value of the goods, services or
products paid as consideration to the seller exceeds two crore rupees.
4.
The Act further states that every
complaint concerning consumer dispute shall be disposed of as expeditiously as
possible. A complaint filed under this Act shall be decided within the period
of three months from the date of receipt of notice by the opposite party in the
cases the complaint does not require analysis or testing of the goods and
services and within a period of 5 months, if it requires analysis or testing of
the goods and services.
5.
The Consumer Protection Act, 2019
also facilitates the consumers to file complaints online. In this regard, the
Central Government has set up the E-Daakhil Portal, which provides a convenient, speedy and inexpensive facility to the
consumers all over India so that they are able to approach the relevant
consumer forums in case of any dispute arises.
6.
The Act lays down the scope for
e-commerce and direct selling.
7.
The Consumer Protection Act, 2019
lays down provisions for mediation and alternative dispute resolution so that
the parties are able to dispose of the case conveniently without going through
the trouble of litigation.
8.
The Consumer Protection Act, 2019
contains provisions for product liability, unfair contracts and it also
includes three new unfair trade practices. In contrast, the old Act just stated
six types of unfair trade practices.
9.
The Act of 2019 acts as the advisory
body for the promotion and protection of consumer rights.
10. Under the Consumer Protection Act, 2019 there is no scope for selection
committees, the Act authorises the Central Government to appoint the members.
Therefore, with the changes in the digital era, the Indian Parliament
enacted and brought the Consumer Protection Act, 2019 in force to include the
provisions for e-commerce as digitalization has facilitated convenient payment
mechanisms, variety of choices, improved services, etc.
MEDICAL NEGLIGENCE CONSUMER
PROTECTION ACT, 2019
Medical profession is considered to be a noble profession
however, it has been time and again placed under scrutiny and so have all
persons working in this profession. Medical negligence is considered to be one
of the most crucial concerns not just in our country but throughout the world.
The primary reason is that numerous cases have been reported where an under
qualified medical professional has been taken under inquiry for not taking
reasonable care during the time of operation, diagnosis, etc.
When a medical expert or hospital
violates the proper standard of care and the patient suffers as a result, they
are accountable for all actions performed against the patient. It is the
complainant's responsibility to establish a case of carelessness. In order to
proceed, they must first prove that the accused owed a duty of care and that
this duty was broken.
However, the "ipsa
loquitur" principle, which states that objects speak for themselves, is
occasionally used by courts. In such a situation, it is assumed that the
medical professional acted negligently by acting below the established level of
care. According to this theory, it is assumed that the injury could not have
resulted from anything else than the medical professional's negligence. In
actuality, the judge's use of this concept would imply that negligence has
already occurred. The onus here shifts to the doctor to establish the contrary.
Examples include operating on the wrong patient or leaving an object within the
patient's body.
CIVIL LIABILITY UNDER CONSUMER FORUM
An individual who feels wronged may
take the accused and the hospital to court in a case against them. Medical
practitioners are regulated by the Consumer Protection Act of 1986, and the
services they provide should be considered services under the Act's provisions
under section 2(1)(o). As with the previous law, the new Consumer Protection
Act of 2019 will include medical services within the scope of services listed
in section 2(42) of the new Act. According to section 42(11) of the 2019 Consumer
Protection Act, any instance of medical negligence on the part of the service
provider is a deficit. Any
aggrieved person can claim damages for medical negligence against a doctor or a
hospital. Section 69(1) of the Consumer Protection Act, 2019 lays down the time
limit within which a complaint for medical negligence must be filed as 2 years
from the date of injury.
CONSUMER LAWS
IN INDIA
The 1986 Consumer
Protection Bill in India was inspired by and made like the laws of several
common law nations, including the United States of America, the United Kingdom,
Australia, and New Zealand. It was based on the UN framework. The former Act from 1986 was replaced by the new Consumer Protection
Act, 2019 when it went into effect in India on July 20th, 2020. The new Act
revises how consumer complaints are handled and resolved in India. For
adulteration and false advertising, there are severe penalties, including imprisonment. It now establishes
guidelines for the sale of items via online commerce. Due to increased
awareness and globalization, consumer needs and expectations have evolved
in the modern day, making it crucial to preserve their rights.
The key difference between the
Act of 1986 and 2019 are as follows:
·
The
Consumer Protection Act of 1986 had a more limited reach; it only addressed six
different categories of unfair trade practices and deceptive practices, whereas
the Consumer Protection Act of 2019 has a wider reach and adds more than three
more unfair trade practices.
·
There
were no provisions for product liability in the Consumer Protection Act of
1986, but there are provisions for product liability in the current
legislation.
·
Unfair
Contacts were not covered under the Consumer Protection Act of 1986, but they
are now covered by the current act.
·
E-commerce
and direct selling were not covered by the previous act's requirements, but
they are covered explicitly by the Consumer Protection Act 2019.
·
When
compared to the New Act of 2019, which has higher Pecuniary limits for District
Forum up to 1 crore, State commission up to 10 crores, and National Commission
above 10 crores, the Consumer Protection Act of 1986 had lower financial
thresholds for District Forum up to 20 lakhs, State commission up to 1 crore,
and National Commission above 1 crore.
·
The
responsibility of Central Protection Councils in the 1986 act was to promote
and protect the rights of Consumers and the role of CPCs in the new act 2019 is
to operate as advisory bodies for the promotion and protection of Consumer
rights.
·
There
were no provisions for alternative dispute resolution procedures in the
Consumer Protection Act of 1986. There are provisions for mediation and other
forms of ADR in the New Consumer Protection Act 2019.
·
In
the previous legislation, there was no regulator; the new Act calls for the
establishment of the Central Consumer Protection Authority.
·
According
to the CPA 1986, a person who fails to follow the Commission's directives may
be sentenced to one month to three years in prison, a fine of Rs 2000 to Rs
10,000, or both. According to the CPA 2019, if someone refuses to follow the
commission's directions, they could get a fine of up to one lakh rupees or a
sentence of up to three years in prison.
·
Different
Committees were authorized in CPA 1986 for the selection of members in consumer
dispute Redressal Commissions, however selection Committees are not included in
CPA 2019. The members may be appointed by the central government.
Various
Rights of a Consumer
Right to
Safety:-
Means right to be
protected against the marketing of goods and services, which are hazardous to
life and property. The purchased goods and services availed of should not only
meet their immediate needs, but also fulfil long term interests.
Before purchasing,
consumers should insist on the quality of the products as well as on the
guarantee of the products and services. They should preferably purchase quality
marked products such as ISI, AGMARK, etc.
Right to be
Informed: -
Means right to be
informed about the quality, quantity, potency, purity, standard and price of
goods so as to protect the consumer against unfair trade practices.
Consumer should
insist on getting all the information about the product or service before
making a choice or a decision. This will enable him to act wisely and
responsibly and also enable him to desist from falling prey to high pressure
selling techniques.
Right to
Choose: -
Means right to be
assured, wherever possible of access to variety of goods and services at
competitive price. In case of monopolies, it means right to be assured of
satisfactory quality and service at a fair price. It also includes right to
basic goods and services. This is because unrestricted right of the minority to
choose can mean a denial for the majority of its fair share. This right can be
better exercised in a competitive market where a variety of goods are available
at competitive prices.
Right to be
Heard: -
Means that
consumer's interests will receive due consideration at appropriate forums. It
also includes right to be represented in various forums formed to consider the
consumer's welfare.
The Consumers
should form non-political and non-commercial consumer organizations which can
be given representation in various committees formed by the Government and
other bodies in matters relating to consumers.
Right to Seek
Redressal: -
Means right to seek
redressal against unfair trade practices or unscrupulous exploitation of
consumers. It also includes right to fair settlement of the genuine grievances
of the consumer. Consumers must make complaint for their genuine grievances.
Many a times their complaint may be of small value but its impact on the
society as a whole may be very large. They can also take the help of consumer
organisations in seeking redressal of their grievances.
Other
Highlights are:
Instead of the
place of business or house of the seller or service provider, an irate customer
may register complaints about a defect in goods or a lack of services from
where she resides. If the claim is less than or equal to 5 lakh Indian rupees,
no fees are payable. Through video conferencing, a consumer can manage her own
case; hiring counsel is optional. The new law has established the idea of
product liability, enabling irate customers to seek sizeable compensation as
restitution for the negligence of the manufacturer or service provider. To
reduce costs and improve the likelihood of redress or settlement, a group of
aggrieved customers can group together and file a class action lawsuit (as in
the US). E-commerce businesses are now required to disclose all pertinent
product information, including the country of origin, and address customer
complaints within set time frames because the industry is now highly regulated.
Even after
excluding state laws, the USA has more than 7 (seven) federal statutes that
deal with consumer law, including the Federal Trade Commission Act,
Gramm-Leach-Bliley Act, Truth in Lending Act, Consumer Product Safety Act,
Dodd-Frank Wall Street Reform and Consumer Protection Act etc.
Most consumer
legislation in the UK is contained in a single Act, the Consumer Rights Act of
2015. Aside from the Consumer Protection Act of 1987 and the General Product
Safety Regulations of 2005, other laws such as the Consumer Protection from
Unfair Trading Regulation of 2008 (which establishes a general obligation for
traders not to engage in unfair trade) and the Consumer Contracts (Information,
Cancellation, and Additional Charges) Regulations (which impose requirements on
traders) also supplements.
Given the
various of legislations in the USA, there are multiple consumer
definitions. The Dodd Frank Act, for instance, defines a consumer as an
individual or an agent, representative, or other person operating on an
individual’s behalf. The term & consumer in the Fair Credit Reporting Act
merely refers to an individual.
According to the
UK’s Consumer Rights Act, a consumer is a natural person acting for purposes
that are entirely or primarily unrelated to their trade, business, craft, or
profession. The concept departs from conventional practice by including all
people regardless of whether they are manufactured or natural. The definition’s
final clause includes a similar practice of excluding commercial
transactions from the purview of consumer protection laws.
In the USA, several
federal agencies enforce consumer protection legislation. This includes
agencies like the Food and Drug Administration, the Consumer Financial
Protection Bureau, and the Federal Trading Commission. Investigation and
enforcement of these laws are also the responsibilities of various state
attorneys. Given the distinct laws for each part of the USA, there are many
agencies and bodies in place to assure enforcement. The benefit of this system
is that, given a narrower area of specialization, they become specialized and
skilled in enforcing a particular sector.
UK, on the other hand, has two
major enforcement agencies. These Trading Standard Services enforce at the
local level, with the potential for regional or even national enforcement in
some circumstances. The second is the Competition and Markets Authority, which
oversees all aspects of UK competition law. Both organizations have
successfully assigned duties to their various departments. Additionally,
consumers can directly assert their rights through courts, just like in India.
UK
The Consumer Rights Act of 2015 (the
"CRA") contains the majority of the rights and safeguards available
to UK consumers. The CRA, which went into effect on October 1, 2015,
streamlined and consolidated different pieces of UK consumer protection law.
The Consumer Protection from Unfair
Trading Regulations of 2008 (the "CPRs"), which contain a general
responsibility on traders not to trade unfairly and forbid aggressive and
misleading methods, are other important sources of consumer protection in the
UK. These outline a "blacklist" of actions that are always prohibited
as unfair and unethical.
The Consumer Contracts (Information,
Cancellation, and Additional Charges) Regulations of 2013 impose different
informational standards and other duties on merchants when selling to
customers.
USA
Consumer protection law is made up of
a large patchwork of Federal and state laws governing everything from products
like cosmetics and medicine to services like lending practices. Among them are
the Federal Food, Drug, and Cosmetic Act, Fair Debt Collection
Practices Act, the Fair Credit Reporting Act, Truth in Lending
Act, Fair Credit Billing Act, and the Gramm–Leach–Bliley Act. Federal
consumer protection laws are mainly enforced by the Federal Trade
Commission, the Consumer Financial Protection Bureau, the Food and
Drug Administration, and the U.S. Department of Justice. The Federal
government oversees antitrust law and consumer protection through
the Federal Trade Commission which inspects complaints of scams and
fraud against businesses. States use a variety of agencies and statutes to
enforce consumer protection, expanding on the Federal law in many areas.
At the state level, many states have
adopted the Uniform Deceptive Trade Practices Act. The deceptive trade
practices prohibited by the Uniform Act can be roughly subdivided into conduct
involving either a) unfair or fraudulent business practice and b) untrue or
misleading advertising. The Uniform Act contains a private remedy with
attorney’s fees for prevailing parties where the losing party & wilfully
engaged in the trade practice knowing it to be deceptive. Most states
have a Department of Consumer Affairs devoted to regulating certain industries
and protecting consumers who use goods and services from those industries.
UNITED NATIONS GUIDELINES FOR
CONSUMER PROTECTION
The United Nations Guidelines for
Consumer Protection (UNGCP) are "a valuable set of principles for setting
out the main characteristics of effective consumer protection legislation,
enforcement institutions and redress systems and for assisting interested
Member States in formulating and enforcing domestic and regional laws, rules
and regulations that are suitable to their own economic and social and
environmental circumstances, as well as promoting international enforcement
cooperation among Member States and encouraging the sharing of experiences in
consumer protection." UNCTAD promotes
the guidelines and encourages interested member States to create awareness of
the many ways in which member States, businesses and civil society can promote
consumer protection in the provision of public and private goods and services.
The Intergovernmental group of experts on consumer
protection law and policy has been established to monitor the implementation of
the guidelines, provide a forum for consultations, produce research and
studies, provide technical assistance, undertake voluntary peer reviews, and
periodically update the UNGCP. Its first session was held on 17 and 18 October 2016 in Geneva.
The UNGCP were adopted by consensus in
1985. This followed a long campaign by consumer associations in many countries,
with Consumers International (then known as the International Organisation of
Consumer Unions since its establishment in 1960 and granted general
consultative status by the Economic & Social Committee in 1977) acting as
interlocutor with the United Nations, having called upon the United Nations to
prepare a 'Model Code for consumer protection' at its World congress in Sydney
in 1975. This led, in 1977, to the Economic and Social Council (ECOSOC)
directing the Secretary General to prepare a survey of national institutions
and legislation in the area of consumer protection and in 1981, ECOSOC
requested the Secretary General 'to continue consultations on consumer
protection with a view to elaborating a set of general guidelines for consumer
protection, taking particularly into account the needs of the developing
countries'. Draft guidelines were circulated to governments for comments in
1982, submitted to ECOSOC in 1983, drawing on many sources including the
Organisation for Economic Co-operation and Development (OECD), the United
States Consumer Bill of Rights and materials from national consumer protection
agencies and consumer associations.
LANDMARK CASES: -
Horlicks Ltd. v. Zydus Wellness Products Ltd. (2020)
In this case, both parties are manufacturers of nutritional
drinks, however, Zydus advertised a television commercial trivialising the
products of Horlicks Ltd. The commercial was being telecasted in various
languages including English, Tamil and Bengali. Therefore, the Delhi High Court
relied on various judgments on misleading advertisements, disparagement and law
governing the publication of advertisements on television and held that the
advertisement is disparaging as it does not provide any concrete proof
regarding the quality of the product. Further, electronic media leaves an
impression on the minds of the viewers thus, these types of advertisements
would not only be detrimental to the consumers but also the complainant would
suffer irreparable damage. A famous judgement relied on by Delhi High
Court while deciding this case is Pepsi Co. Inc. v. Hindustan Coca Cola Ltd.,
2003 where the Delhi High Court held
that there are certain important factors that are to be kept in mind in case of
disparagement which are; manner of the commercial, intent of the commercial and
storyline of the commercial.
Veena Khanna v. Ansal Properties & Industries Ltd, NCDRC
(2007)
In this case, the complainant offered to purchase a flat from the respondent which
the respondent agreed to deliver on 1.6.1999 through a letter. However, the
flat was not constructed within the specified date and hence it was not
delivered. For such deficiency in services, the complainant demanded the refund
of the deposited amount with interest at the rate of 18% pa which was refused
by the opposite party.
The National Commission observed that
due to delays in construction and delivery of possession it is quite difficult
for a consumer to purchase a flat at market price. The National Commission
stated that it is the duty of the State Commission to direct the builders to
deliver the possession of the flat as soon as it is completed and the
complainant should be awarded suitable compensation for the delay in
construction. The complainant just claimed the refund amount before the State
Commission, but the case was pending before the commission for five years and
during that time there was a tremendous rise in the market prices of the
immovable property. The National Commission further stated that it was the duty
of the State Commission to direct the respondents to deliver the possession of
the flat or any other flat of equivalent size to the complainant with
appropriate compensation, due to the delay in delivering the possession within
the specified time. Or, adequate compensation ought to have been provided to
the complainant so that they could purchase a new flat of the same size at the
prevailing market rate in that same locality.
CONCLUSION: -
The updated Consumer Protection Act of 2019 provides
consumers with a wide range of advantages and rights to safeguard them against
unfair business practices, false or misleading advertising, etc. The Act gives
customers the option to use mediation and other alternative dispute resolution
processes so that the parties can choose a quick and efficient resolution of
their issues. The Act's inclusion of e-complaints and e-consumers shows that
certain members of the legislature were forward-thinking. Additionally, the Act
added new concepts like "product responsibility" and "unfair
contracts," broadening the extent of protection for consumers' rights and
enabling them to complain when those rights have been infringed. Thus, the inclusion of the provisions in this
fills up the lacunae in the Consumer Protection Act, 1986. The enactment of the
Act was paramount and it changed the ambit of protecting the rights of
consumers in the country.
REFERENCES: -