Consumer can cheer as the Consumer Protection
Act, 2019 has recently replaced the three-decade old Consumer Protection Act,
1986. The new act proposes a slew of measures and tightens the existing rules
of further safeguard consumer rights. Introduction of a central regulator,
strict penalties for misleading advertisements and guidelines for e-commerce and
electronic service providers are some of the key highlights.
Consumer Courts – Consumer redressal commissions, aka consumer
courts, are present at the district, state and national levels to address
consumer complaints. The Act has increased the pecuniary jurisdiction, which
means ability of courts to take up cases depending on the value of the case, of
the consumer courts. Another crucial change says that now the money spent on
buying the product till that time will determine the value of the case as
opposed to the previous parameter of total value of the purchased
goods/service. In another move, the Act
allows consumers to file their complaint with the court from anywhere. This
comes as a big relief as earlier they were required to file complaint in the
area where the seller or service provider was located. This is a fitting move
considering the rise in e-commerce purchases, where the seller could be located
anywhere. In addition, the Act also enables the consumer to seek a hearing
through video conferencing, saving him both money and time.
Product Liability – The Act has proposed provisions for product
liability under which a manufacturer or a service provider has to compensate a
consumer if their good/service cause injury or loss to the consumer due to
manufacturing defect or poor service. For instance, if a pressure cooker
explodes due to a manufacturing defect and harms the consumer, the manufacturer
is liable to compensate the consumer for the injury. Earlier, the consumer
would only be compensated with the cooker’s cost. The consumer could ask for
compensation, but through a civil court, which usually takes years to resolve a
case, and not consumer forum. The most significant impact of this provision
will be on e-commerce platforms as it also includes service providers under its
ambit. Product liability is now extended to service providers and sellers along
with manufacturers. This means e-commerce sites cannot escape as aggregators
anymore.
E-commerce under the radar - E-commerce will now be governed by
all the laws that apply to direct selling. The guidelines propose that
platforms like Amazon, Flipkart, Snapdeal etc will have to disclose sellers’
details, such as their address, website, email, etc and other conditions
related to refund, exchange, terms of contract and warranty on their website to
increase transparency. The onus of ensuring that no counterfeit products are
sold on these platforms will also most likely lie with the companies. If any
such product is reported or recognised, the company could be penalised. This
move is fitting since cases of fake products sold through e-commerce platforms
is rampant. A survey by a social community platform LocalCircles conducted in
December last year showed that 38% respondents out of 6,923 were sold
counterfeit products from an ecommerce site in one year.
Separate Regulator – The Act proposes establishment of a
central regulator, Central Consumer Protection Authority (CCPA), to address issues
related to consumer rights, unfair trade practices, misleading advertisements
and impose penalties for selling faulty and fake products. Broadly, regulatory
moves of CCPA will be directed towards the manufacturers, sellers and service
providers and will not address customer grievances and disputes directly.
Nevertheless, the overall purpose of CCPA is to strengthen the existing
consumer rights.
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