05/08/2019 - Government Policies | GS II |

IAS Parliament 5 years

KEY POINTS

Positives of the bill

· The Bill recognises this, bringing within its fold online sales, tele-shopping, direct selling and multi-level marketing in addition to the traditional methods.

· The new law will apply to all goods and services, including sale or construction of homes or flats and telecom services. While the earlier law did cover unfair trade practices, the current one makes it more comprehensive. It also defines unfair contracts.

· The Bill improves upon the Act of 1986 on a few counts. It provides for product liability action on account of harm caused to consumers due to a defective product or by deficiency in services.

· Manufacturers, sellers or service providers are legally bound to compensate consumers for defects or deficiency.

· It envisages a regulatory authority known as the Central Consumer Protection Authority (CCPA) with powers of enforcement, unlike the existing Consumer Protection Councils which are only advisory bodies.

· The CCPA will have powers to initiate class action including enforcing recall, refund and return of products.

· The Bill calls upon the endorsers to exercise due diligence before they plunge into advertisements. Failure to do so will attract a penalty of Rs10-50 lakh and/or a ban from further endorsements for a period of 1-3 years.

Criticisms of the bill

· The Bill does not address the fundamental problem of protracted and complicated litigation, the bane of consumer forums constituted under the Consumer Protection Act of 1986.

· Instead, it provides an alternative to the consumer forums, in the form of mediation.

· The Bill does provide for a regulator, but there is no proper focus on the duties of the regulator.

· Even the definition of ‘consumer rights’ in the Bill is not simple and straight forward, so that consumers at least know what their entitlements are.