“I will drag you to consumer court”. This is one threat you will hear from dissatisfied customers across the length and breadth of the country. Unfortunately, though, this has never been quite enough to spur service providers into action. With the Union Cabinet giving the new Consumer Protection Bill its nod, however, it seems likely that the rights of the Indian consumer may find strong legal backing and India shall soon be a buyers’ market. Given the strident developments in the e-commerce industry and the introduction of new tax reforms, a overhaul of the protection of consumers’ rights has become imperative.
Consumer Protection Bill 2017
Focusing on the need for an improved mechanism for addressing consumer complaints and averting trade malpractices particularly with regard to online sales and e-commerce, the Union Cabinet has approved the introduction of the Consumer Protection Bill 207 in the winter session of the parliament. If cleared, the bill will replace the decades old Consumer Protection Act of 1986 and will bring about a revolutionary change in consumer rights and laws in the country. Back in October, Ram Vilas Paswan, the Union Minister of Consumer Affairs, Food and Public Distribution had said, “Consumer empowerment is one of the main components of the new Act. Misleading ads will be tackled even more strictly”.
The Consumer Protection Act of 1986
Before we take a look at the features of this new bill to be introduced, let us understand the existing Consumer Protection Act which was passed by the parliament in 1986. In the 31 years since the bill was enacted Indian markets have undergone a complete change.As of 2016, retail consumer spending in the country was estimated to be about USD 750 billion. Retail e-commerce sales alone clocked USD billion. Smartphones are now the equivalent of shop windows and cashless (digital) payment, innovations in advertising, multi-layered delivery models are the new game changers. None of these developments were even anticipated in 1986 when the law was framed. The need to protect consumers from online frauds and unfair ecommerce practices is felt strongly now. The Consumer Protection Act of 1986 was later amended in 1991, in 1993, and again in 2002. All these amendments, however, failed to keep pace with the changing dynamics of the Indian markets.
Two years ago, the Consumer Protection Bill 2015 was introduced in the Lok Sabha on 10 August, 2015. The government had at the time invited comments and suggestions from the general public and from various government departments. Now, having incorporated a number of these, the bill is likely to be reintroduced in the winter session.
Features of New Protection Consumer Bill
- Due to the phenomenal growth in the e commerce industry, the new Consumer Protection Bill will propose amendments that will being all online transactions under the ambit of this act. Currently in case of a dispute, the consumer may only file a case in the place of transaction which is often the seller’s location. This act will facilitate electronic filing of complaints or approaching the court in the consumer’s place of residence.
- The bill will also explore the possibility of affixing liability on the manufacturer or service provider in case of any accident or injury or loss to the consumer arising from faulty design, manufacturing, lack of quality control, misleading labeling, warning, or false advertisement.
- One of the major features of the bill that will benefit the traders and service providers is the move to minimize frivolous suits and unnecessary litigation. The bill aims at penalizing the party filing a frivolous suit and baseless complaints with a fine of up to INR 50,000.
- Another one of the key changes proposed by the new bill is a revaluation of the Indian Contract Act of 1872 – the act based on which the validity of the terms of any contract is upheld. The new bill will lay down unfair terms of contract which may lend greater scope to the contract law.
Central Consumer Protection Authority
The new Consumer Protection Bill 2017 (if approved) will make way for the setting up of a Central Consumer Protection Authority. This authority will function on the lines of trade commissions in other countries such as the US. It shall be headed by a Commissioner, will receive and expedite inquiries into these complaints, and in case violation of consumers’ rights is revealed by the inquiry, it will also initiate legal action at an appropriate court. It will also initiate and follow up class-action suits – cases which deal with a group of consumers who have the same kind of complaints.