Context: Recently, the new Consumer Protection Act, 2019 came into force on 20th July 2020 and it will empower consumers and help them in protecting their rights through its various notified rules and provisions.

• It will come by replacing  Consumer Protection Act, 1986 in which single-point access to justice was given making it a time-consuming exercise.

Issues in consumer protection act 1986:

• A high number of consumers are unaware of their rights under the 1986 Act due to ambiguities and complexities in the act.
• While the disposal rate of consumer cases is high, the time taken for their disposal is very long. It took 12 months on an average to resolve a consumer case.
• Act does not address consumer contracts between a consumer and manufacturer that contain unfair terms. In this context, the Law Commission of India had recommended that a separate law should be enacted in relation to unfair contract terms.

Key points of Consumer Protection Act, 2019

• A consumer is defined as a person who buys any good or avails a service for a consideration.
• The definition of consumer does not include a person who obtains a good for resale or a good or service for commercial purpose.
• It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.

There are six consumer rights which have been defined in the Bill, including the right to:

• be protected against marketing of goods and services which are hazardous to life and property;
• be informed of the quality, quantity, potency, purity, standard and price of goods or services;
• be assured of access to a variety of goods or services at competitive prices; and
• seek redressal against unfair or restrictive trade practices
• The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.
• The Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state and national levels.

The jurisdiction of the Consumer Disputes Redressal Commissions (CDRCs) will be:

• The District CDRC will entertain complaints where value of goods and services does not exceed Rs 1 crore.
• The State CDRC will entertain complaints when the value is more than Rs 1 crore but does not exceed Rs 10 crore.
• Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.

Why need Central Consumer Protection Authority (CCPA)?

• The new Act recognizes offences such as providing false information regarding the quality or quantity of a good or service, and misleading advertisements.
• It also specifies action to be taken if goods and services are found “dangerous, hazardous or unsafe”.
• The CCPA will have the powers to inquire or investigate into matters relating to violations of consumer rights or unfair trade practices suo motu, or on a complaint received, or on a direction from the central government.

Salient features of Consumer Protection Act, 2019:

• Consumer Protection Councils
• Central Consumer Protection Authority (CCPA)
• Simplified Dispute Resolution Process
• Mediation- An Alternate Dispute Resolution (ADR) mechanism
• Product Liability
• Rules on e-commerce and direct selling
• Penalty for adulteration of products/spurious goods

Benefits to Consumers:

• The CP Act 1986- single point of access to justice, which is time consuming. Additional swift executive remedies provided through CCPA.
• Deterrent punishment to check misleading advertisements and adulteration of products.
• Product liability provision to deter manufacturers and service providers from delivering defective products or deficient services.
• Ease of approaching Consumer Commissions and Simplification of adjudication process.
• Scope for early disposal of cases through mediation.
• Provision for rules for new age consumer issues: e-commerce & direct selling.

Impact of Consumer Protection Act, 2019 on e-commerce platforms

• The e-commerce portals will have to set up a robust consumer redressal mechanism as part of the rules under the Consumer Protection Act, 2019.
• The e-commerce entities will have to provide every detail 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 and so on.
• They will also have to mention the country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.
• The e-commerce platforms also 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.

Significance of New e-commerce Rules under Consumer Protection Act, 2019

• The rules mentioned under the Act are mandatory for e-commerce platforms and not merely advisories as issued earlier.
• It is for the first time that such detailed rules have been published by the government of India regarding e-commerce entities.
• The mentioning the country of origin is equally essential as an e-commerce entity offers imported goods or services for sale, it shall mention the name and details of any importer from whom it has purchased such goods or services, or who may be a seller on its platform.
• As per the rules, sellers cannot refuse to take back goods or withdraw services or refuse refunds, if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform.
• The rules also prohibit the e-commerce companies from manipulating the price of the goods or services to gain unreasonable profit through unjustified prices.

What Consumer Protection Act, 2019 brings for Customers?

• The new Act broadens the definition of consumer, by recognising those engaged in offline as well as online multi-level and telemarketing transactions.
• The broadening of definition of consumers will protect those rendered vulnerable in the wake of rapidly-developing technology.
• Unlike the provision in previous acts, a consumer can now institute a complaint from where he resides or from where he works for gain.
• The provisions related to increasing pecuniary limits, providing statutory recognition to mediation processes, enabling filing of complaints from any jurisdiction and for hearing parties through video-conferencing will increase accessibility to judicial forums and afford crucial protection in times when international e-commerce giants are expanding their base.
• The limitation period for filing of appeals to the State Commission has been increased from 30 days to 45 days.

Challenges of Consumer Protection Act, 2019

• It is unclear as to how the Central Consumer Protection Authority (CCPA) will function and certain function relating to investigations and inquiries.
• There is an overlap between the functions of director General while considering the investigative wing and search and seizure functions.
• It is unclear whether the existing cases will be transferred on account of change in pecuniary jurisdiction.
• There are certain provisions regarding misleading advertisements, celebrity endorsement of products, constitution of the Apex Central Protection Authority, e-commerce etc. which have not been notified yet.

Other Rules and Regulations

• As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases up to Rs. 5 lakh.
• The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund (CWF).
• State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters.
• Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council (CCPC).
• It will be 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.
• It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and North-East Region.