Consumer Rights%2C Consumerism and Business 1

8/3/2019 Consumer Rights%2C Consumerism and Business 1

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Consumer

Consumer Rights

Consumer

Protection


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Removal of personal relationship between

buyer and seller as a result of massmarketing methods and consumers

increased mobility. Above all, the

growing consumer awareness about theirrights, consciousness and concern for

value for money have contributed to the

emergence of universal acceptance ofthe need for protection and promotion of

consumer rights


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Consumer movement

One of the earliest systematic movement inconsumerism was largely due to Mr. Ralph

Nader, the well-known American Consumer

Rights Advocate. History of protection ofconsumer rights by law has long been

recognised as dating back to 1824. Every

year, 15th of March is observed as theWorld Consumer Rights Day.


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On that day in 1962 President John F. Kennedy

called upon the U.S. Congress to accord its

approval to the Consumer Bill of Rights. Theserights are (i) right to choice; (ii) right to

information, (iii) right to safety and (iv) right to be

heard. President Gerald R. Ford added one moreright i.e. right to consumer education. Later other

rights such as right to healthy environment and

right to basic needs (Food, Clothing and Shelter)were added. In India, 24th December is

celebrated every year as the National Consumer

Rights Day as the Consumer Protection Act, 1986

was enacted on that day.


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UNIn the history of the development of

consumer policy, April 9, 1985 is a very

significant date for it was on this day the

General Assembly of the United Nations

adopted a set of general guidelines for

consumer protection and the Secretary

General of the United Nations wasauthorized to persuade member countries

to adopt these guidelines through policy

changes or law..


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comprehensive policy

Physical safety;

Protection and Promotion of the consumer economic

interest;

Standards for the safety and quality of consumer goods

and services; Distribution facilities for consumer goods and services;

Measures enabling consumers to obtain redress;

Measures relating to specific areas (food, water andpharmaceuticals) and

Consumer education and information programme.


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These guidelines were adopted recognizing that

consumers often face imbalances in economic

terms, educational levels and bargaining powerand bearing in mind that consumers should have

the right of access to non-hazardous products

apart from promoting just, equitable andsustainable economic and social development.

These U.N. guidelines for Consumer Protection

can assist in the identification of prioritiesparticularly in the light of emerging trends in a

globalised and liberalized world economy


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Constitutionalism and Consumerism

Constitutionalism and consumerism both seem to

be twin sisters with similar objectives.

Constitutionalism, in a politically organized

society, is concerned with the protection and

promotion of an individuals rights, dignity andwelfare as a citizen Similarly, consumerism is

concerned with the protection, promotion and

welfare of the rights of the individual as aconsumer, a client and a customer. In the final

analysis, it is the individual; who is the concern of

both whether as a citizen, a consumer, a customeror as a client


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Constitutionalism provides the policy framework,

institutional mechanism, finances and functionaries for

better service and empowerment of the citizen. On theother hand consumerism provides ways and means to

demand quality goods, better services, better

protection, empowerment, welfare and value for

money. Thus, both are supplementary and

complementary to each other. Constitutionalism

promotes by way of constitutionally directed

fundamental duties of a citizen, development of ascientific temper and spirit of inquiry and consumerism

facilitates consumers to know about the products and

services in detail and in all its aspects.


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Finally, one may like to mention that

constitutionalism as well as consumerism is an

art and science for ensuring quality of life.

Therefore, promoting consumerism is directly

related to the promotion of constitutionalism. In

a more practical perspective the focus of both isgood governance in all its dimensions, i.e.,

transparency, accountability, responsiveness,

efficiency, effectiveness and economy at all levels sectoral, local, regional and national with a

vision to develop a better society guaranteeing

thereby a better life to all citizens.


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Consumer Protection -

Implications for Good GovernanceAn effective, efficient and fair implementation of the

Consumer Protection Act is one of the conditions

precedent for promoting the culture of good

governance and thereby ensuring a better promotion

and protection of the rights of consumers. If the rights

of the consumer in relation to the quality of goods and

services are assured and taken care of, then there will

be no cause for complaints. This situation wouldcertainly create an environment wherein clients,

customers and consumers would feel satisfied with the

things needed most by them.


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In this context, the concerns of good

governance need to be mentioned brieflywith a view to establish a linkage with the

concern of Consumer Protection Policies,

Laws and Institutions. Generally speaking,the thrust of good governance movement,

inter alia, is efficiency, effectiveness,

ethics, equality, economy, transparency,accountability, empowerment, rationality,

impartiality and participation


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Consumer Protection in India

It may be mentioned at the outsetthat any one interested in the

task of consumer protection

movement has to be well versed

in various laws and not merely

with the Consumer Protection

Act, 1986.


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One should have knowledge of laws relating to

Contract, Tort, Limitation, Transport, Railways,

Telegraphs, Telephones, Post, Air Travel,

Insurance, Electricity, Water, Housing, Medicine,

Banking, Finance, Engineering, Motor Vehicles,

Hotel Industry, Entertainment, CooperativeSocieties, Tourism Agencies, Taxation, etc. There

is no limit to subjects, which may come before a

Consumer Forum /Commission for decision. Inaddition, one should also be well versed with

the laws relating to unfair trade practice and

restrictive trade practices.


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INDIAN lawsThe Indian Penal Code, 1860; Indian Contract Act, 1872;

Drugs Control Act, 1950; Industries (Development andRegulation) Act, 1951; Indian Standards Institution

(certification marks) Act, 1952; Drug and Magic

Remedies (Objectionable Advertisement) Act, 1954;

Prevention of Food Adulteration Act, 1954; EssentialCommodities Act, 1955; Trade and Merchandise Marks

Act, 1958; Hire Purchase Act, 1972; Cigarettes

(Regulation of Production, Supply and Distribution) Act,

1975; Prevention of Black-marketing and Maintenance

of Supplies of Essential Commodities Act, 1980;

Essential Commodities (Special Provisions) Act, 1981


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Multi-State-Co-operative Societies Act, 1984;

Standard of Weights and Measures

(Enforcement) Act, 1985; and Narcotic Drugs

and Psychotropic Substances Act, 1985. Some

significant consumer protection enactments of

pre-Independence time are the Sale ofGoodsAct, 1930; Agriculture Produce (Grading

and Marketing) Act, 1837 and Drugs and

Cosmetics Act, 1940 all aim at protection ofconsumers. The latest addition the list of laws

having bearing on consumer protection is

Competition Act, 2002 etc..,


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THE boss ,CPA,1986was enacted with an objective to provide better

protection of the interests of the consumers,

to make provision for the establishment of

Consumer Councils and other authorities for

the settlement of consumer disputes. This is

indeed a unique and highly progressive piece

of social welfare legislation. The Act is

intended to provide effective and efficient

safeguards to the consumers against various

types of exploitations and unfair dealings.


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Important Features of the C.P. Act(i) The Act applies to all goods and services unless

specifically exempted by the Central Government.

(ii) It covers all the sectors private, public and

cooperative.

(iii) The provisions of the Act are compensatory in nature.(iv) It provides adjudicatory authorities, which are simple,

speedy and less expensive.

(v) It also provides for Consumer Protection Councils at the

National, State and District levels.

(vi)The C.P. Act is in addition to and not in derogation of

the provisions of any other law for the time being in

force.


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Consumer Rights under the Act(a) the right to be protected against marketing of goods and services

which are hazardous to life and property;(b) the right to be informed about the quality, quantity, potency,

purity, standard and price of goods or services, as the case may be

to protect the consumer against unfair trade practices;

(c) the right to be assured, wherever possible of access to variety ofgoods and services at competitive prices;

(d) the right to be heard and to be assured that consumers interests

will receive due consideration at appropriate fora;

(e) the right to seek redressal against unfair trade practices orrestrictive trade practices or unscrupulous exploitation of

consumers; and

(f) the right to consumer education.


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In todays date, business is confronted with growthof consumerism and legislative measures to protectconsumers.

Consumer movement is growing in India.

There is growing consumer awareness about

products failing to satisfy quality requirements. Exploitation of consumers by unfair trade practices,

poor quality and spurious products and overpricing isvery widespread.

Misleading false or deceptive advertisements iscommon. At times the advertisement gives only halfthe information so as to give a different impressionthan is the actual fact.


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Misrepresentation about the quality of a product

or the potency of a drug or a medicine can be

projected without much risk. There are organizations such as Consumer

Guidance Society of India, Mumbai and Consumer

Education and Research Centre, Ahmadabad.

These organizations are active in conducting

product testing and exposing substandard quality

and adulteration. Outcome of consciousness

regarding consumer rights has led to ISIcertification of food colors now being mandatory.

Consumer organisations also play an important

role in addressing consumer greivances.


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Consumer RightsSome of the rights of consumers are:

Right against exploitation by unfair trade practices.Right to protection of health and safety from goods

and services that are available to the consumer.

Right to be informed about the quality andperformance standards, ingredients of the products,possible adverse effects etc.

Right to be heard if there is any grievance orsuggestion.

Right to get genuine grievances redressed.

Right to a physical environment that will protect andenhance the quality of life.


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Responsibility of Consumers

Consumer should not make vague or generalcomplaints and should also have supportinginformation and proof such as a bill.

Consumer should try to understand the

viewpoint of the seller. Consumers in asserting their rights should not

inconvenience or hurt other sections of the

public ie resort to rasta roko movements, bandhetc.

Consumers should complain against a systemand not attack individuals.


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Kotler has defined Consumerism as a social

movement seeking to augment the rights andpowers of the buyers in relation to others.

Consumerism as a collective endeavor of theconsumers to protect their interests, is a

manifestation of the failure of the business,

including that of the public sector, and the

government to guarantee and ensure the

legitimate rights of the business.


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Consumer Protection For consumer protection all stakeholders

especially Business, Government andconsumers are equally responsible.

Business, comprising producers and all

elements of distribution channels have to paydue regard to consumer rights.

Producer should not charge exorbitant prices in a

sellers market.

Hoarding and black-marketing is illegal.


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Consumer Protection Government should come to the rescue of the consumer

to avoid him from being misled, duped, cheated andexploited.

As per the UN Guidelines for Consumer Protection

Role of Government in consumer protection is vital and is

through policy making, legislation and development ofinstitutional capacity for its enforcement.

Government to establish distribution facilities foressential consumer goods and services.

Encourage establishment of consumer cooperatives andrelated trading activities.

Establish legal measures to enable consumers to obtainredress through formal or informal procedures.


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Consumer Protection Consumers should accept consumerism as a means of

asserting and enjoying their rights. As per Kotler addition of long run consumer welfare asks the

businessman to include social and ecological considerations in

his product ad market planning.

NGOs have an important role in consumer protection. As per

the UN Guidelines one of the objectives is to facilitate the

development of independent consumer groups which should

have the freedom to present their views in the decisionmaking processes affecting them. Consumer organisations

should be encouraged to monitor adverse practices, such as

the adulteration of foods, false or misleading claims in

marketing and service frauds.


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Utility of Consumerism

Producers and sellers will not take the consumer forgranted.

Consumerism will provide feedback for businesses

and enable producers to understand consumer

grievances, needs and wants. Consumerism will make the Government more

responsive to consumer interests, prompt it to take

necessary measures to protect the rights of

consumers.

Help consumer and producer to get together and co-

operate to get rid of unscrupulous traders.


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Consumerism Consumerism has the following roles to play:

Consumer Education: Consumer is given

information about various consumer goods and

services in relation to prices, standard trade

practices etc. Product Rating: Agencies such as Consumer

Education and Research Society (CERS),

Ahmedabad; carry out tests and report the result

of such tests. Liaison with Government and with Producers


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UN Guidelines for Consumer Protection

Objective:

1. To assist countries in achieving or maintaining adequateprotection for their population as consumers.

2. Facilitate production and distribution patterns responsive tothe needs and desires of consumers.

3. Encourage high levels of ethical conduct for those engagedin the production and distribution of goods and services.

4. Assist countries in curbing abusive business practices by allenterprises which adversely affect consumers.

5. Facilitate development of independent consumer groups.

6. To further international cooperation in the field of consumerprotection

7. Encourage the development of market conditions whichprovide consumers with greater choice at lower levels.


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General PrinciplesGovernments should develop, strengthen or maintain a

strong consumer protection policy, taking into accountguidelines set below:

Protect consumers from hazards to their health andsafety.

Promotion and protection of the economic interests ofconsumers.

Access of consumers to adequate information to enablethem make informed choices.

Consumer education. Availability of effective consumer redress.

Freedom to organise consumer groups to present theirviews in decision making processes affecting them.


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Plight of Indian ConsumerSome of the problems faced by Indian consumers are:

Short supply of items of essential needs. Lack of effective or workable competition.

Unfamiliarity of product features results in sale ofsubstandard, inferior or even defective goods

Due to low literacy levels and unsatisfactoryinformation flows, Indian consumers are notconscious of their rights.

Consumerism in India is not organized and

developed. Laws to safeguard interests of consumers are not

effectively implemented.


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Government MeasuresIn India, the Government has taken a number of measures

to protect consumer interests:

Statutory Regulation:

Government of India is empowered to regulate the termsand condition of sale, nature of trade and commerce etc.

Important legislation in this respect include the CompetitionAct, Essential Commodities Act, Prevention of FoodAdulteration Act, Prevention of Black marketing andMaintenance of Supplies of Essential Commodities Act,Consumer Protection Act etc.

Growth of Public Sector was designed to enhance consumerwelfare by increasing production and making available goodsand services at fair prices, curbing private monopolies andreducing market imperfections.


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Consumer Protection Act, 1986

The Consumer Protection Act 1986 is a social welfare legislation which wasenacted as a result of widespread consumer protection movement. The

main object of the legislature in the enactment of this act is to provide for

the better protection of the interests of the consumer and to make

provisions for establishment of consumer councils and other authorities for

settlement of consumer disputes and matter therewith connected.

In order to promote and protect the rights and interests of consumers,

quasi judicial machinery is sought to be set up at district, state and central

levels.

The main object of these bodies is to provide speedy and simple redressal

to consumer disputes. It is one of the benevolent pieces of legislation

intended to protect the consumers at large from exploitation.


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Consumer Protection Councils

The Act provides for the establishment of a Central Consumer

Protection Council by the Central Government and a StateConsumer Protection Council in each State by the respective StateGovernments.

Central Council shall consist of the Minister in charge of consumeraffairs in the Central Government who shall be its Chairman .

Objective of Council: Right to be protected against marketing of goods and services which

are hazardous to life and property.

Right to be informed about the quality, quantity , purity, standard andprice of goods and services so as to protect the consumer against unfairtrade practices.

Right to be assured access to a variety of goods at competitive prices. Right to be heard and assured that consumers interests will receive due

consideration at appropriate forums.

Right to seek redressal against unfair trade practices

Right to consumer education.


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Consumer Disputes Redressal Agencies A District forum in each and every District of

the State. A State Commission in each State.

A National Commission : Established by the

Central Government in Aug 1988.A complaint where the value of the goods and

services and compensation is less than Rs 5 lakhis to be dealt with the District Forum; between5-20 lakhs by the State Commission and withmore than twenty lakhs falls within thejurisdiction of the National Comission.


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Right to Information Act 2005

An Act to provide for setting out thepractical regime of right to

information for citizens to secure

access to information under the

control of public authorities, in order

to promote transparency andaccountability in the working of

every public authority


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Ethical Responsibilities of Business towards

Consumers

The responsibility of business corporations towards their consumersare to provide the products at right quality, quantity, time, placeand the right price. Consumer is the foundation of any businessactivity. Various unfair practices like hoarding, adulteration,shoddy merchandise, unfair measurements, misleading

advertising etc. should not be allowed. Businesses should:

Produce goods according to the needs of the consumers, theirpurchasing power etc.

Offer quality goods at a reasonable price. Aim to improve the standard of living by producing goods and

services of high quality.

Treat customers fairly in all aspects of business transactions


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Ethical Responsibilities of Business towards

Consumers

Ensure that after sales services is available. Ensure the health and safety of customers

Inform and educate customers on the arrival and use ofproducts.

Be truthful in the matter of advertising and warranty.

Offer improved and new products through technicaland marketing research.

Avoid monopolistic and restrictive trade practices.

Ensure that product promotion and advertising are notmisleading.

Trust forms the basis of successful marketplacetransactions and is the most important ethical issue.


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Ethical issues relating to Product

Quality

Safety: Business should give safety the priority warranted by theproduct. Safety of a product can be ensured by monitoring themanufacturing process and periodic reviewing of the workingconditions and competence of personnel

Packaging and Branding Issues: It is the ethical responsibility ofthe manufacturer to provide clear, accurate and adequateinformation regarding the labeling and packaging of products.There should not be any misleading information regarding the

quantity and quality of products. Product Warranties: Warranties are obligations to purchasers

that sellers assume. Express warranties are the claims thatsellers explicitly state for eg: a product is waterproof etc. Impliedwarranties include the claim, implicit in any sale, that a product

is fit for its ordinary, intended use.


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Ethical issues Relating to Promotion

Companies make use of advertising andpromotional strategies to lure more customers.Advertising is considered unethical when:

It degrades the rivals product or substitute product.

The company provides misguiding and falseinformation.

It conceals information that vitally affects humanlife (eg: side effects of drugs etc).

It is obscene or immoral.

Consumer Rights%2C Consumerism and Business 1

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