Consumer Protection Act, 2019
- The new Consumer Protection Act, 2019 came into force on 20th July, 2020.
- It replaced the existing Consumer Protection Act, 1986, and in its overarching mandate, aims to provide a mechanism for the redressal of consumer complaints regarding defects in goods and deficiency in services, right down to the level of districts.
- The Consumer Protection Bill, 2019 was introduced in the Upper House of Parliament on July 8, 2019.
- It was passed by the Lok Sabha on July 30, 2019 and Rajya Sabha on August 6, 2019. The Bill was then signed into law by President on August 9, 2019.
Salient Features of the Act
Covers E-Commerce Transactions
- The New Act has widened the definition of 'consumer'.
- The definition now includes any person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing.
- The earlier Act did not specifically include e-commerce transactions, and this lacuna has been addressed by the New Act.
Creation of Central Consumer Protection Authority
- It proposes the establishment of a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers, and make interventions in situations of unfair trade practices.
It will be empowered to -
- conduct investigations into violations of consumer rightsand institute Complaints / Prosecution;
- order recall of unsafe goods and services; and
- order discontinuance of unfair trade practices andmisleading advertisements.
Rules on e-Commerce and Direct Selling
- Now every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.
- e-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act.
Simplifying Consumer Dispute Adjudication Process
- Empowering the State and District Commissions to review their own orders.
- Enabling a consumer to file complaints electronically and in consumer commissions that have jurisdiction over the place of his residence.
- Video-conferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.
Alternate Dispute Resolution Mechanism of Mediation
- A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it.
- Mediation will be held in the Mediation Cells to be established under the aegis of the Consumer Commissions.
- There will be no appeal against settlement through mediation.
- A manufacturer or product service provider or product seller to be responsible to compensate for injury or damage caused by defective product or deficiency in services.
- Basis for product liability action -
- Manufacturing defect
- Design defect
- Deviation from manufacturing specifications
- Not conforming to express warranty
- Failing to contain adequate instructions for correct use
- Service provided-faulty, imperfect or deficient
- A significant note for customers under this Act is that there will be no fee for filing cases up to Rs 5 lakh.
- There are provisions for filing complaints electronically, credit of amount due to unidentifiable consumers to Consumer Welfare Fund (CWF).
Penalties for Misleading Advertisement
- The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.
- In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
Penalty for Adulteration of Products/Spurious Goods
- In case of the first conviction, a competent court may suspend any license issued to the person for a period of up to two years and in case of second or subsequent conviction, may cancel the license permanently.
Central Consumer Protection Council
- It provided for constitution of the Central Consumer Protection Council, an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields.
- The Council, which has a three-year tenure, will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and NER.
Protecting Consumer Right
- Earlier Consumer Protection Act, 1986, a single point access to justice was given, which was also time consuming.
- The new Act has been introduced after many amendments to provide protection to buyers not only from traditional sellers but also from the new e-commerce retailers/platforms.
- It will prove a significant tool in protecting consumer rights in the country.