All things go Digital these days and a customer has high expectations. Therefore, the digital world provides easy access, a large number of choices, convenient payment. Digitalization has tried to improve all the hurdles, that a customer was facing like services or shopping as per convenience, consequently, on the other side, it brought challenges related to consumer protection as well. Keeping this in mind, the Indian parliament passed the new Consumer Protection Act, 2019 by replacing old Consumer Protection Act, 1986. It aims to protect the rights of consumers and enforce it and also provides to a customer the timely and effective administration and settlement to address consumer disputes.
Modifications made by the Consumer Protection Act, 2019(hereinafter referred to as CPA,2019)
As it comes into force on 20th July 2020 and from various notified rules and provisions, it empowers and protects the rights of consumers. The Act is less time consuming as compared to older Consumer Protection Act.
The definition of ‘Consumer’ is enlarged in the new Act i.e. it includes any person who buys goods either by online mode or through the offline transaction, electronic means, teleshopping, direct selling or multi-level marketing. Whereas the earlier Act didn’t specifically include e-commerce transaction, but this unfilled space or gap has been filed by the New Act.
- It established the Central Consumer Protection Authority(CCPA) whose primary goal is to protect, promote and enforce the rights of consumers.
It is authorized to:
- Investigation of conduct which violates consumer rights and institute complaints/prosecution.
- Order to recall unsafe goods and services.
- Discontinuance of Unfair trade practices and misleading advertisements.
- Impose penalty for such misleading advertisements, Manufacturers of goods etc.
- Rules related to E-Commerce and Unfair Trade Practices
- In this Act, E-commerce organization are required to give all the information to customers such as provide information for a refund, exchange, warranty, return and guarantee, delivery date, shipment, modes of payment, delivery cost, and country of origin.
- This information is necessary for the consumer before he/she makes the decision to purchase online.
- If any consumer makes complaint then these platforms will have to acknowledge to a consumer within 48 hours and also readdress the complaints within one month from the date of receipt. Also, their duty is to appoint at least one person who acts as a grievance officer for consumer grievance redressal.
- Therefore, it is mandatory rules and not only advisories (for E-commerce).
- If such goods which are purchased are defective, deficient, or delivered late or any other bad reason, sellers cannot refuse to return back goods or withdraw services or refuse to return funds.
- The Act also prohibits those E-commerce companies from manipulating the price of goods or services which are unreasonable, unjustified prices.
- Product Liability
A manufacturer or which provides product service to consumer or product seller will be held liable to compensate for injury or damage caused by defective product or deficiency.
- Penalties for Misleading Advertisement
The CCPA may impose a penalty of up to Rs. 1,000,000 on a manufacturer or an endorser, for a false or misleading advertisement. The CCPA may also sentence them to imprisonment for up to 2 years for the same. In case of a subsequent offence, the fine may extend to Rs. 5,000,000 and imprisonment of up to 5 years. The CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to 1 year. For every subsequent offence, the period of prohibition may extend to 3 years.
- Punishment for Manufacturer or who sale Adulterated/Superior Goods
In case of the first conviction, Court (Competent Court) may suspend any licence to the person for a period up to two years and in case of second, may cancel licence permanently.
- Mediation under ADR (Alternative Dispute Resolution)
- By Consumer Commission a complaint will be referred for Mediation whenever if it is likely that earlier settlement exists and also parties too agree for it.
- There is Mediation Cell which is established under the aegis of the Consumer Commissions.
- No appeal under Mediation against the settlement.
- Unfair Trade Practices
The definition of Unfair Trade Practices is broadened to include the sharing of consumer personal information which is in confidence given by consumer unless such disclosure is made in accordance with the provision of law.
- Consumer Dispute Redressal Commission
In the new Act, there is provision for the establishment of Consumer Disputes Redressal Commissions (CDRCs) at the District, State and National levels. Therefore, it entertains complaints related to;
- Overcharging or deceptive charging
- Unfair or restrictive trade practices
- Sale of hazardous goods and services which may be hazardous to life.
- Sale of defective goods or services
- Simplification in Adjudication Process
- It gives power to the State and District Commission to review their own order.
- A consumer can file complaints electronically or in Consumer Commission which has jurisdiction over the place of his residence or place of work of consumer.
- If the question of admissibility is not decided within 21 days of a specified period then will be done by video-Conferencing hearing and deemed admissibility of complaints will be done.
- The regulatory authority which is known as the Central Consumer Protection Authority (CCPA), is now having wide power of enforcement. It has the power of investigation or inquiry when consumer law is violated. CCPA has the power to take Suo-moto actions, recall product or order reimbursement of the piece of goods /services, also cancel the licence and has power to file action suits, if in complaints of consumer affect more than one person.
|Provision||Consumer Protection Act,1986||Consumer Protection Act,2019|
|Regulator||No separate Regulator||Central Consumer Protection Authority to be formed|
|Consumer Court||Complaint could be filed in a consumer court where the defendant office is located.||Complaint could also be filed in a consumer court where the complainant resides or works|
|Product Liability||No provision in Consumer court but consumer could approach to civil court.||Consumer can seek compensation for harm caused by a product or service.|
|Pecuniary Jurisdiction||District up to Rs 20 lakh State up to Rs 20 lakh to Rs 1 cr. and National above Rs 1cr.||District up to Rs 1 cr. State up to Rs 1 cr. to 10 cr. And National above Rs10 cr.|
|E-commerce||No provision||All rules of direct selling extend to e- commerce|
|Mediation Cells||No Legal provision||Court can refer settlement through mediation|
These are the days where all the things go digital and the consumer has high expectations but in old consumer protection, 1986, there was no such provision in relation to E-commerce and the consumer faces so many difficulties like fraud, misrepresentation of product etc. But in the new Consumer Protection Act, 2019 resolve all the impediments of consumers and cover up the loopholes of old consumer protection Act. Taking justice was a time-consuming process but by the introduction of the new Act, it becomes easier.