Last updated: December 17th, 2019 5:13 PM

Consumer Protection Bill 2019

On July 30^th 2019, the Lok Sabha passed the Consumer Protection Bill 2019. This bill seeks to simplify many of the rules associated with consumer protection. It is aimed at ensuring timely and effective administration and settlement of consumer disputes. The entire process of redressing consumer grievances is sought to be simplified. This bill will replace the Consumer Protection Act, 1986.

Central Consumer Protection Authority (CCPA)

CCPA will be a national level regulator to tackle consumer rights violation, unfair trade practices and false or misleading advertisements. CCPA will have an investigation wing headed by a Director-General vested with powers of search and seizure. The District Collector will be empowered to report to the CCPA regarding mass consumer complaints in his jurisdiction. The powers of the CCPA include:

• Promote, protect and enforce consumer rights
• Empowered to investigate, recall, refund and impose penalties–recall unsafe goods and services
• Regulate matters related to consumer rights violation, unfair trade practices including misleading advertisements
• Provides for a class-action lawsuit
• Empowered to levy penalty of up to 10 lakhs on manufacturer or endorser for misleading advertisement
• Can order the discontinuation of Unfair Trade Practices and misleading advertisements
• Can conduct investigations into consumer rights violations and institute complaints and prosecution
• Empowered to direct discontinuation of practices that are unfair and prejudicial to consumer interests
• CCPA can file complaints to the Consumer Dispute Redressal Forum
• Issuing direction to concerned manufacturers/endorsers/advertisers/traders to discontinue a false or misleading advertisement or modify it.
• Imposing penalties
• Issuing safety notices to consumers regarding unsafe goods and services

Salient Features of Consumer Protection Bill 2019

Product liability provision serves as a deterrent to manufacturers and service providers from delivering defective products or deficient services. Product liability will encompass:

• Manufacturing defect
• Design defect
• Non-conformance to warranty
• Deviation from manufacturing specifications
• Imperfect or deficient services
• Not providing adequate usage instructions

Simplified Dispute Resolution

1. Consumer commission empowered to enforce orders
2. Ease of approaching consumer commission and filing for consumers–through e-filing and videoconferences
3. Ease of approaching
4. Appeals only on the question of law after the second stage
5. Consumer Disputes Redressal Commissions (CDRC) will be set up at the district, state and national The pecuniary jurisdiction has been enhanced:
   • District Commission up to 1 crore
   • State Commission from 1 crore to Rs.10 crores
   • National Commission Above 10 crores

Consumer Rights

1. A consumer is anyone who buys good or avails service for consideration. Those who buy goods for resale or goods or services for commercial purpose do not come under the purview of a consumer. Transactions that come within the gamut are offline, online, teleshopping, direct sales or multi-level marketing.
2. Rights of the consumer as defined in the Consumer Protection Bill 2019
3. To be protected against the marketing of any goods and services that are hazardous to life and property
4. To be informed of the details of products like quality, quantity, potency, purity, standard and price of goods and services
5. To be assured of clear access to a variety of goods and services at competitive prices
6. To seek redressal against unfair or restrictive trade practices

Mediation

• Alternate Dispute Resolution (ADR) mechanism is set in place
• Mediation Cells are to be attached to Consumer Forum
• Scope of early settlement through mediation
• No appeal against any settlement through mediation

Penalties under the Consumer Protection Bill 2019

The penalty of Rs.10 lakh is levied on celebrities endorsing misleading advertisements. This is for the first offence and also includes a one-year ban on any endorsement. The penalty is Rs.50 lakhs for the second offence with a ban of 3 years on endorsements. However, there are few exceptions when an endorser will not be held liable for such a penalty. The penalty is up to Rs.10 lakhs for manufacturers and companies along with up to 2 years jail term. On subsequent offences, the penalty is raised to Rs.50 lakhs and the jail term to nearly 5 years. Penalty for adulteration can be a life-term jail sentence. The Consumer Protection Bill 2019 seeks to plug the gap in the advertising industry which is monitored by the Advertising Standards Council of India (ASCI). This bill seeks to bring about far-reaching changes in the protection of consumer rights and provides a framework for redressal and litigation settlement.