Who is consumer?

A consumer is an individual who consumes goods-manufactured by f i rms or created by nature (a ir, water e tc . ) And services offered by government or f i rms-hospi ta l , educat ional inst i tut ions.

Meaning of consumerism:

Organized-efforts by individuals , groups, and governments to help protect consumers from pol ic ies and pract ices that infringe consumer rights to fa ir business pract ices

Consumerism is an important socia l movement which aims a t protect ing the consumers against unethical or immoral marketing practices of pr ivate companies as wel l as publ ic enterpr ises .

DEFINITION:

RICHARD H. BUSKIRK AND JAMES DEFINES CONSUMERISM AS “ORGANIZED EFFORTS OF CONSUMERS SEEKING REDRESS, RESTITUTION AND REMEDY FOR DISSATISFACTION THEY HAVE ACCUMULATED IN THE ACQUISITION OF THEIR STANDARD OF LIVING.”

PHILIP KOTLER SAYS THAT “CONSUMERISM IS NOT LIMITED TO ORGANISED EFFORTS ONLY BUT, IS A SOCIAL MOVEMENT SEEKING TO AUGMENT THE RIGHTS AND POWERS OF BUYERS IN RELATION TO SELLERS.”

Evolution of Consumerism: The idea of ‘consumerism’ was first conceived in USA.

Consumerism evolution can be studied in three distinct phases as follows:

Around 1900

Around 1930

1960’s

Around 1900

The business firms dealing in meat packing were least concerned with the consumers. Meat used to be sold in the most unhealthy manner. This affected the health of the consumers. Even many other firms used to produce dangerous, unwanted products and drugs and sell them to the consumers by adopting manipulative devices. Conscious and sensible became disgusted with this sort of affairs and started campaign to preserve the interests of the consuming public.

Around 1930

Consumerism assumed more importance because people in general became more enlightened and concerned with the standards of good quality products. This was possible on account of education, awareness and political consciousness. Although consumerism did not become a serious public movement during this time, the Government came up with a legislation called Miller-Tiching Act 1936 in order to regulate certain marketing mal-practices.

In1960’sIt is in the sixties of this century consumerism became a very forceful social movement. Late President Kennedy, in the year 1962, passed a legislation to protect the consumers’ rights particularly with regard to false advertising and unhealthy packaging of food and other articles.

The consumerism movement reached its height when a serious criticism was levelled against the ‘un-safety’ of automobile companies which caused death to many people. Later on they started setting up consumer affairs cell to deal with consumer disputes of allegations.

Consumerism in IndiaThe major causes of consumerism in India have been identified as rising prices, poor product performance and service quality, product shortages and deceptive advertising-shortages and inflation. Government has been very responsive to the consumer needs through legislative action.

A few years ago in 1950’s adulteration of food articles was sought to be presented by the food Adulteration Act in India. Inspectorate departments were set up in all States of India to implement and supervise the way the Act was followed. To a certain extent, it has done good because false weights and measures have been checked and food adulteration has been controlled to a great extent.

How Did Consumerism Originate?The profit-making attitude of the business failed to discharge social responsibilities of maintaining fair price, quality of goods and providing services etc.

Consumerism is an outcome of sufferings and exploitation of consumers, and some businessmen, aim to make abnormal profit, which is at the cost of consumers’ safety and health. However, it has been accepted and agreed that “A consumer is a king of the Market,” but in fact he is not. The majority of the Indian problems relating to consumers are adulteration, artificial scarcity, and unreasonable prices. To save or protect people against exploitative practices of trade, consumerism has emerged and has been accepted as a defensive force to safeguard the interest of the customers.

Consumer Protection Right-1986 Enacted to provide a simpler and quicker access to redress of consumer grievances. The Act seeks to promote and protects the interest of consumers against deficiencies and defects in goods or services.

It seeks to secure the rights of a consumer against unfair trade practices, which may be practiced by manufacturers and traders.

The Act applies to all goods and services unless specifically exempted by the Central Government. It covers all the sectors whether private, public or cooperative.

The set-up of consumer forum is geared to provide relief to both parties, and discourage long litigation. In a process called 'informal adjudication', forum officials mediate between the two parties and urge compromise.

Consumer courts provide redress only in cases of products or services for personal use, defects in products used for commercial purposes are not entertained.

Basic Rights of a Consumer 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, standard and price of goods or services so as to protect the consumer against unfair trade practices.

Right to be assured, wherever possible, access to variety of goods and services at competitive prices.

Right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums.

Right to seek redressal against unfair trade practices. Right to consumer education.

Consumer Redressal Forum

Under the Consumer Protection Act, every district has at least one consumer redressal forum also called a Consumer Court.

Above the district forums are the state commissions.

At the top is the National Consumer Disputes Redressal Commission in New Delhi.

Basis of Formal Complaint- Consumer Protection Act, 1986 under Sec. 2(1)(c)

“A complaint must contain any of the following allegations:-

An unfair trade practice or a restrictive trade prac tice has been adopted by any trader

The goods bought by him or agreed to be bought by him suffer from one or more defects

The services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect

A trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods

Goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requir ing traders to display information in regard to the contents, manner, and effect of use of such goods”.

Requirements to file a Complaint Complaint is to be filed within two years of buying the product or using the service. Complaint needs to be in writing. Letters should be sent by registered post, hand-delivered, by email or fax. Don't forget to take an acknowledgment.

 Firstly, a complaint cannot be filed unless the complainant satisfies the criteria for being a “consumer” under the Consumer Protection Act, 1986. Further, if a complaint is on behalf of the public, which consists of unidentifiable consumers, it will not stand in the court.

The complaint should mention the name and address of the person who is complaining and against whom the complaint is being filed. Copies of relevant documents must be enclosed.

The consumer must mention details of the problem and the demand on the company for redressal. This could be replacement of the product, removal of the defect, refund of money, or compensation for expenses incurred and for physical/mental torture. Please ensure that the claims are reasonable.

You should preserve all bills, receipts and proof of correspondence related to the case. Avoid using voice mail or telephone because such interactions are normally difficult to prove.

The complaint can be in any Indian language..

There is no compulsion to hire a lawyer. Main cost consists of correspondence and travelling to the consumer forum for the hearing

Maintain a complete record of the emails and documents sent by you.

You should preserve all bills, receipts and proof of correspondence related to the case. Avoid using voice mail or telephone because such interactions are normally difficult to prove.

The complaint can be in any Indian language..

There is no compulsion to hire a lawyer. Main cost consists of correspondence and travelling to the consumer forum for the hearing

Maintain a complete record of the emails and documents sent by you.

Imp points to be noted during filing of complaint includes:

1. Consumer Complaint          2. Time Bar           3. Jurisdiction                      4. Court fee structure

AppealAppeal is a legal instrumentality whereby a person not satisfied with the findings of a court has an option to go to a higher court to present his case and seek justice. In the context of consumer forums: An appeal can be made with the state commission against the order of the district forum within 30 days of the order which is extendable for further 15 days. (Section 15)

An appeal can be made with the National Commission against the order of the state commission within 30 days of the order or within such time as the National Commission allows. (Section 19)

An appeal can be made with the Supreme Court against the order of the National Commission within 30 days of the order or within such time as the Supreme Court allows. (Section 23)

Penalties The consumer courts (district court, state commission and National Commission) are given vast powers to enforce their orders.

If a defaulter does not appear in court despite notices and reminders, the court may decide the matter in his absence.

The forum can sentence the defaulter to a maximum of three years' imprisonment and impose a fine of Rs. 10,000.

Forums can issue warrants to produce defaulters in court.

They can use the police and revenue departments to enforce orders.

Role of Govt. of India Ministry of Consumer Affairs, Food and Public Distribution is the nodal department in this matter.

NCDRC is headed by a sitting or retired judge of the Supreme Court of India. The commission is presently headed by Justice D K Jain, former judge of the Supreme Court of India.

Dept. has conducted countrywide multimedia awareness campaign since 2005- ‘Jago Grahak Lago’ has become a household axiom.

In 1992, Consumer Welfare fund was created to consumers assist financially, create awareness and strengthen the voluntary consumer movement.

Ministry has National Consumer Helpline No: 1800-11-4000 (toll free)

Case StudyDetailed Analysis:

1. NCDRC Judgement on Jaypee Properties, Noida.

2. Consumer Court Judgement on Air India Flight Cancellation.

Other Interesting Cases:

3. Consumer Court fine on Cadbury India.

4. Fortis Hospital Doctors fined for Medical Negligence

Government MeasuresCONSUMERISM

Classification Statutory Regulations of Private Business

Development and Expansion of the public sector

Statutory Regulations The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969

Industrial Development and Regulation Act, 1951

Essential Commodities Act, 1955

Prevention of Food Adulteration Act, 1954

Prevention of Black marketing and Maintenance of Supply of Essential Commodities Act

Sale of Goods Act, 1935

Trade Mark and Merchandise Act, 1958

Agriculture Products Grading and Marketing Act, 1937

Drugs Control Act, 1950

Indian Patents and Design Act

Indian Standard Institute’s Certification Act, 1952

Standard Weights and Measures Act, 1956

Consumer Protection Act, 1986

Import and Export Control Act, 1947

Packaged Commodities (Regulation) Order, 1975

Price and Stock Display order

The Drug Act,1940

Foreign Trade (Development and Regulation Act), 1992

Growth and Expansion of Public Sector

Benefits of Consumerism Consumer Education

Liaison with Government and the Producer

Product Research and Inform the Consumers

The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969

Objectives◦ Regulation of monopolies and prevention of concentration of economic power◦ Prohibit monopolistic, restrictive and unfair trade practices

Monopolies Trade Practices Unreasonable increase the cost related to production, supply or distribution of goods or in the performance of any service.

Unreasonably prevent or lessen or reduce competition in the production, supply or distribution of any goods or service

To unreasonably increase◦ The price at which the goods are to be sold or resold or the charges for the services provided or are to

be provided◦ The profits derived from the production, supply or distribution of goods or profits obtained from

provision of any service.

Restricting or limiting technical development or capital investment to the common detriment or any act that will culminate in deterioration in the quality of any goods or in the provision of service rendered.

To unreasonably limit or prevent or lessen competition in the production, supply or distribution of any goods or in the provision of any service

Exemptions to the Act If the Central Government has permitted the owner of the undertaking to carry on that trade practice.

If the undertaking has been authorized by any enactment, in force for the time being, that the trade practice is not prejudicial to the public interest.

When the Central Government Finds its necessary to◦ For security purpose or to meet the defence requirements◦ To ensure the maintenance of essential goods and services◦ To give effect to the terms of an agreement, where Central is a party

Restrictive Trade Practice Collusion or Concert

Exclusive dealing arrangement

Tie-in sales

Full time Forcing

Price Discrimination

Predatory Pricing

Resale Price Maintenance

Area Restriction

Boycott