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Ch 10 Ethics of Consumer Protection

The document discusses the importance of consumer protection, emphasizing the roles of consumers, businesses, and the government in safeguarding consumer rights. It outlines the legal framework in India, including the Consumer Protection Act of 1986, which provides consumers with rights and mechanisms for redressal against malpractices. The document also highlights the various forms of consumer exploitation and the need for consumer education and awareness.

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0% found this document useful (0 votes)
14 views25 pages

Ch 10 Ethics of Consumer Protection

The document discusses the importance of consumer protection, emphasizing the roles of consumers, businesses, and the government in safeguarding consumer rights. It outlines the legal framework in India, including the Consumer Protection Act of 1986, which provides consumers with rights and mechanisms for redressal against malpractices. The document also highlights the various forms of consumer exploitation and the need for consumer education and awareness.

Uploaded by

kaushalt060
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Ethics of Consumer Protection

Chapter-10
Consumer – An important
stakeholder
 Good business ethics should place the customer as one
of the important stakeholders and should give the
customer his or her due share in the business practices.
 Consumer is considered as the king who through the
market forces dictates the quantity and quality of goods.
 Leaders like Mahatma Gandhi consider him as the sole
purpose for which an enterprise exists.
Consumer and Consumer
Protection
 A consumer is any person who, or firm, HUF, cooperative
groups or firms, or association which,
• Buys any goods for a consideration which has been fully or partly paid for with
a purpose that does not include resale or any commercial purpose; and
• Hires or avails of any services for a consideration which has been fully or
partly paid for, with a purpose that does not include free service or services
under a personal contract.
 Consumer Protection refers to the step necessary to be
taken or measures required to be accepted to protect
consumers from business malpractices.
 This is primarily necessary because businesspersons aim
at maximizing profits, often at the expense of consumers.
Parties to Consumer Protection
 Role of consumer
 Consumer should take care of their own interest and protect themselves from
malpractices.
 They should know their rights and exercise them.
 They should not depend on the good sense of businesspersons.
 Consumer have a right to education and heard.
 They should attend training programmes for consumer arranged by local consumer
association or by their own association and invite consumer activists to speak to
them on consumer rights and remedies available under the law to protect them.
 Role of Business person
 Producers, distributors, dealers, wholesales, as well as retailers should pay due
attention to consumer rights in their own interest by ensuring supply of quality
goods and services at reasonable prices.
 To prevent unfair practices, associations should entertain consumer complaints
against their members and take proper action against those culprit of malpractices.
Parties to Consumer Protection
 Role of Government
 Government to ensure the general interest of society.
 Appropriate laws should be enforced and existing laws amended to protect
consumer interests in the light of recommendations of consumer associations.
 Representation of consumer group should also be associated with the policy-
making bodies set up by govt. both at the center and the states.
 A number of consumer protection measure have been taken by the Indian
Government from time to time.
Consumer protection, Why and
How?
 The consumers has been at the receiving end due cheat and deceive in most of the
countries of the world, especially in the developing nations like India.
 On account of such exploitation, a strong public opinion has been built over the past
five decades demanding protection to consumers.
 Consumer protection is only possible if adequate and appropriate cooperation is
forthcoming form the three concerned parties – consumer, government and business
 Consumers rights are  As per UN report CR must be defended
 Right to be heard with
 Right to safety  Product labelling about the content and proper use of
 Right to be informed product and their environmental and social impact
 Strict standard for consumer safety and health
 Right to choose  Information and awareness campaigns about potential
 Right to seek redressal hazard, such as smoking and improper use of feeding
 Right to consumer education formula for infants.
 Consumer protection can be achieved by producers and traders adopting
discipline, and self regulation; NGOs, association, and voluntary orgs. have
protected consumer interest by spreading information & awareness about
different products & services.
Consumer duties and
responsibilities
 Substantiate the complaint: When a consumer make a complaint against the seller of the
product, it should be specific and supported by appropriate evidence, such as bills,
acknowledge copies of correspondence. Complaints must be genuine in his/her claims.
 Give a chance to seller to explain his viewpoint: The consumer complainant should seek the
opinion/viewpoint of the seller before lodging a complaint with appropriate authorities. It is
likely that some cases the explanation of the them seller may convince the consumer that he/she
not considered the other side of the problem, and to what extent remedy is available to him/her.
 Cooperate with the seller if needed: If many consumer superior with one another to get a product
or services in short supply, the seller may want the buyer to come in a queue and take it on FCFS
basis. Moreover, buyers should not try to misuse their rights to exploit or embarrass the seller. They
should give first opportunity to redress their complaint to the seller himself; going to consumer
court should be the last option.
 Avoid inconvenience to others unconnected with the issue: consumer even while they claims
their rights from sellers or producers of products or services, should not cause trouble or
inconvenience to others. When they resort to dharna or such type of movements, it should not cause
problem to the public.
 Do not personalize issues: Consumer should make it a point to complain against the system that
causes them problem, and not against individuals, who may be replaced by others who may be as
helpless as the former.
Consumer duties and
responsibilities
 Don’t allow others to use you: consumer should ensure that they fight for their own
causes, and should not lend themselves to be used as pawns in games played by
political parties.
 Be well informed before you complain: They must read and understand the teams
& conditions of sale before buying goods, especially before lodging complaints.
 Understand how to get your grievances/complaints redressal process: Consumer
should have a clear knowledge as to whom they should approach for redressal of
their grievances.
 Avoid impulsive (hurry/unplanned) buying: Consumer should plan their
purchases, devote some time to select the product or service that would satisfy their
wants, survey the market, gain knowledge about alternatives, have an idea of quality
and price and then make purchase decision.
 Buy goods from authorized agents: should buy goods or services from genuine
authorized agents, after paying due taxes and obtaining bills and receipts.
How are Indian consumers
exploited?
 Exorbitant (excess) prices of product and services
 Deceptive selling practices (Buy 2 get 1 free)
 False and misleading advertising
 Defective quality, higher prices
 Sale of hazardous products to ignorant consumers
 Suppression of material information
 False product differentiation (selling substandard products)
 Producers / sellers collusion
 Supply of adulterated and substandard (weak) products
 Cheating consumers by giving lesser quantity for the price
 Dishonored guarantees and warranties
 Poor redressal of customers’ genuine grievances
How are Indian consumers
exploited?
 Creating a scare out of scarcity
 Making consumer buy unwanted goods
 Misleading representation on utility of products
 Manipulating conditions of delivery
 Customers pay for numerous intermediaries
 Fall in prices – never passed to consumers
 Buying unaffordable goods
 Advertisement cost
 Hoardings and black marketing
 Gifts for products and services
Consumer protection in India
 The explosion of interest in consumer matters arose in the
second half of the 20th century.
 The reasons behind that is new business methods and
changing attitudes.
 The key factors are the complexity of goods that bring
about new business methods and the changing forms of
advertising and distribution.
 It is desirable for consumers to be aware of their rights,
and to exercise those rights responsibly and intelligently.
Consumer protection in India
 There are number of enactments in India such as the
Prevention of Food Adulteration Act 1954, the Drugs and
Magic Act 1964, the Essential Commodities Act 1969 etc.
 However, the remedies prescribed there under are time-
consuming, inadequate and expensive.
 In judicial processes, if ever, offenders/culprit are hardly
caught, and rarely legal actions proceeded taken against
them.
 When violators go scot-free, the victims have no remedy and
get frustrated.
Legal Protection to Consumers
1. Agricultural products (Grading and Marketing) act 1937
2. Industries (Development and regulation) act 1951
3. Prevention of Food Adulteration act 1954
4. Essential commodities act 1955
5. The standards of weights and measures act 1956
6. Monopolies and restrictive trade practices act 1969
7. Prevention of Black-Marketing and maintenance of
essential supplies act 1980
8. Bureau of Indian standards act 1986
9. Consumer protection act 1986
Consumer protection act 1986
(COPRA)
 The COPRA conferred a legal right to the individual
consumer to seek legal redress or recover costs and
damages for injury or loss suffered by him or her as a
result of faulty, defective goods and services.
 This act is applicable to all defective goods and deficiency
in service.
Consumer protection act 1986
(COPRA)
 The goods under this act means every movable property,
including stock and share, growing crops and thins
attached to or forming part of the land.
 Whereas service means any description which is made
available to potential users including facilities in
connection with banking, financing, insurance, transport,
processing, supply of electrical or other energy, boarding
or lodging or both, entertainment, amusement or the
purveying (examine) of news or other information.
Consumer protection act 1986
(COPRA)
 Consumers rights are
 Right to be heard and to be assured that consumer’s interest will received due
consideration at appropriate forum.
 Right to safety, that is the right to be protected against the marketing of G&S which are
hazardous to life and property.
 Right to be informed about the quality, quantity, potency, purity, standard price of G&S
and protect unfair trade practices.
 Right to choose that the assured, wherever possible, access to a variety of G&S at
competitive prices.
 Right to seek redressal against unfair trade practices or restrictive trade practices or
exploitation of consumers
 Right to consumer education
 Consumer disputes settlement through the consumer disputes redressal agencies which
includes
 A consumer disputes redressal forum known as the District Forum
 A consumer disputes redressal commission known as the State Commission
 A National consumer disputes redressal commission known as the National Commission
Consumer protection act 1986
(COPRA)
 Eligibility to file a claim
 Finds any defects in the quality, quantity, potency, purity or standard of the
goods or services
 Finds any fault, imperfection, shortcoming or inadequacy in the quality,
nature and manner of performance in relation to the service
 Within what period can a complaint be filed?
 A complaint should be filed at the earliest but not later than two years from
the date on which the cause of action arose.
 The court may entertain the delay in complaint if the complainant is able to
satisfy the court that there was sufficient cause for the delay.
 Appeals:
 An appeal from the order of the District Forum lies to the State
Commission, against the order of the State Commission to the National
commission and against the order of the National Commission to the
Supreme court (Filled within 30 days)
Three-Tier Consumer Dispute Redressal
System
 District Forums:
 Composition:
 the forum would consist of three persons, appointed by the State
government on the recommendations of a committee comprising (i) the
president of the State Commission who will act as Chairman of the
selection committee, (ii) Secretary, Law Department of the state, and (iii)
Secretary – in – charge of the department of consumer affairs of the state
 Qualification of members:
 (i) The president of the district forum could be qualified to be a District
Judge, (ii) A person of eminence in the field of education, trade or
commerce; or (iii) a lady social worker
 Apart from the President, the other two members should have adequate
knowledge of the Law, Commerce, Accountancy, Industry, Public affairs and
Administration
District Forums
 Term of office:
 The term of office of each member is five years or up to the age
of 65 years, whichever is earlier
 Remuneration
 The service conditions and monetary compensation
 Jurisdiction:
 The value of goods and services and the claimed compensation
do not exceed Rs 5,00,000
 The matter of complaint should fall within the local limits
assigned to the forum
District Forums
 Procedure for Filing Complaints:
 The consumer
 Any recognized consumer association
 One or more consumers where there are several consumers,
united in common interest
 The Central or The State Government
 Procedure for Settling Disputes:
 Product sent for testing (if test is required)
 Case is decided on the merits of available evidence
 Powers of the Forum:
 Same power as of civil court
District Forums
 Remedial Action
 Order to remove defect
 Replace the goods
 Refund the price or charge
 Pay compensation for loss or injury or damage
 Withdraw the supply of hazardous supplies from the market
 Dismissal of Frivolous (meaningless) or Vexatious
(harassing) Complaint:
 Complainant shall pay to opposite parties not exceeded Rs 10,000
 Appeal against Forums’ order:
 Filled with the State Commission within 30 days of passing order
State Consumer Dispute Redressal
Commission
 Organization and Structure:
 Has a chief office, a president, appointed by state government
on the recommendation of the Chief Justice of the High Court,
president is one who has been the Judge of a High Court.
 The two other members, one is a woman constitute the
commission.
 The members have to be persons of ability, integrity and
adequate knowledge of the Law, Commerce, Accountancy,
Industry, Public affairs and Administration.
National Commission
 NC as an apex body in consumer dispute settlement.
 As per Central Govt. has established the National Consumer Disputes
Redressal Forum at the national level.
 Composition:
 Commission has a president and four members, one of who is woman.
 The president is appointed by the Central Govt. on recommendation of the
Chief Justice of India.
 Other four members are appointed by Central Govt. on recommendation of
selection committee as consisting below
 I. A judge of Supreme Court nominated by the CJI, who is acts as chairman
of the selection committee.
 II. Secretary, Dept. of Legal Affairs, GOI.
 III. Secretary of department dealing with consumer affairs in the GOI.
National Commission
 Terms of office of members: 5 Year or till 70 years whichever is earlier.
 Service conditions: The remuneration, allowances and other service condition of
the members of the National Commission are decided by CGI.
 Jurisdiction: The monetary jurisdiction of the NC is above INR 10 million. Its
appellate jurisdiction includes all appeals against the order of the State
Commission.
 Manner of disposal of complaints: Same as the District Forum. The nature of
the powers same as the District Forum.
 Administrative controls: Over the State Commission to ensure that the
provisions of the act are suitably observed.
 Appeals: Can be filed in the Supreme Court within 30 days of its orders.
 Monitoring authority: The Department of Consumer Affairs under the Ministry
of Consumer Affairs, Food and Public Distribution monitor the disposal of cases
by consumer courts through the National Commission.
Thank You…

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