Consumer Rights in India: Role of Consumers & Redressal System, Lecture notes of Economics

Download Consumer Rights in India: Role of Consumers & Redressal System and more Lecture notes Economics in PDF only on Docsity! ECONOMICS Consumer Awareness Notes MODULE - 8 Contemporary Economic Issues 114 24 CONSUMER AWARENESS To satisfy various wants people purchase goods and services by paying price. But what to do if the goods and services bought are found out to be bad in quality or unreasonably priced or measured less in quantity etc. In such situations the consumers, instead of getting satisfaction, feel cheated by the sellers who have sold the goods and services. They also feel that they should be properly compensated for the loss. So there should be a system to reddress such issues. On the other hand consumers should also realize that they do have responsibilities not just rights. OBJECTIVES After completing this lesson, you will be able to:  know the meaning of a consumer, goods and services and consumer awareness;  understand the need for consumer awareness;  explain the consumer redressal system in India;  realise the rights and responsibilities of consumers;  understand the procedures for filing the complaints in the consumer courts;  know the challenges of consumers’ movement in India. 24.1 SOME DEFINITIONS First let us know the meaning of - a consumer, goods and services and consumer awareness.  Who is a consumer? To begin with, let us know the definition of a consumer. A consumer is the buyer of goods and services. The user of goods and services with the permission of the buyer is also treated as a consumer. But a person is not a consumer if he/she purchases goods and services for resale purpose. MODULE - 8 Contemporary Economic Issues 115 Consumer Awareness ECONOMICS Notes  What are goods and services? Goods are those products which are manufactured or produced and sold to consumers through wholesalers and retailers. Service means service of any description which is made available to the potential user with respect to the provision of facilities in connection with banking, finance, insurance, transport, supply of electrical or other energy, housing, construction, water supply, health, entertainment, amusement etc. It does not include any service rendered free of charge or under a contract of personal service.  Consumer Awareness Consumer awareness refers to the combination of the following : (i) The knowledge of the product purchased by the consumers in terms of its quality. For example the consumer should know whether the product is good for health or not, whether the product is free of creating any environmental hazard or not etc. (ii) The education about the various types of hazards and problems associated with marketing of a product - For example, one way of marketing a product is advertisement through news papers, television etc. Consumers should have proper education about the bad effects of advertisement. They must also verify the contents of the advertisement. (iii) The knowledge about ‘Consumer Rights’ - This means that, first, the consumer must know that he/she has the right to get the right kind of product. Secondly, if the product is found out to be faulty in some manner, the consumer should have knowledge of claiming compensation as per the law of the land. (iv) The knowledge about consumer’s own responsibilities- This implies that consumers should not indulge in wasteful and unnecessary consumption. 24.2 NEED FOR CONSUMER AWARENESS The market today is flooded with very large number as well as varieties of goods and services. The number of producers and final sellers of the commodities have also increased many folds. So it has become very difficult to know as to who is a genuine producer or seller? It is practically not possible for consumers to personally come in contact with a producer or seller. Moreover in the age of advanced information technology the physical distance between consumer and producer/seller has also increased, since consumers can get their commodities at door step by booking orders over telephone or through internet etc. Similarly from among large varieties of commodities, it has become very difficult to know as to which one is genuine? People think that a product which has appeared in some advertisement must be good or the ECONOMICS Consumer Awareness Notes MODULE - 8 Contemporary Economic Issues 118 Among other measures included in CPA some recent ones are:  Consumers are allowed to decide where they want to seek redressal.  A company cannot insist on being liable to be tried only in a court of its choice.  Consumers are allowed to sue service providers of a company for passing on their personal information to salespersons e.g. banks, insurance company etc.  Real estate developers are classified as traders and liable to be tried in a consumer court.  Oversees agencies operating through e-commerce sites on the internet or telemarketing are not allowed to sell their products unless they maintain an office in India. They have to organise the inspection of goods prior to purchase, or refund goods within 30days.  Officials and stakeholders like state government departments of post and telecom, passport offices, municipal services, Central Government Health Scheme (CGHS) and railways are demanding exemption from the Act fearing, they will have to face a barrage of litigation. INTEXT QUESTIONS 24.2 1. Give the full form of CPA, ECA and SWMA? 2. How can a foreign agency sell its product in India? 24.3.2 Institutions to Deal with Consumers’ Grievances The citizens of India have an Institutional machinery, to deal with consumers’ grievances, working at all levels: national, state and district. There are two types of institutions- (i) Government Councils and (ii) Consumer Courts. Besides this there are also several Non-Governmental Organizations (NGOs) registered under the government law which provide various kinds of support to the aggrieved consumers. (i) Government Councils Read the following flow chart to know the government councils working at national and state levels. Consumer Protection Machinery at the governments level Central Consumer Protection State Consumer Protection Council Council MODULE - 8 Contemporary Economic Issues 119 Consumer Awareness ECONOMICS Notes As shown in the chart there is a Central Consumer Protection Council (CCPC) at the National Level which is headed by a Central Minister in-charge of the Consumer Affairs in the Central Government at New Delhi. At the State Level there is a State Consumer Protection Council (SCPC) in each state of India which is headed by a State Minister- in-charge of the Consumer Affairs in the State Government. Consumer Courts Read the following flow chart to know the types of Consumer Courts working at national and state and district levels. Consumer Courts in India National Consumer State Consumer District Consumer Disputes Redressal Disputes Redresal Forum (DCF) Commission Commission (NCDRC) (SCDRC) As given in the chart, there are three layers of Consumer Courts in India. At the bottom is the District Consumer Forum (DCF) at the district level in the state. There are 604 District Forums in the country now. At the mid level there is State Consumer Disputes Redressal Commission (SCDRC). There are 35 State Commissions in the country. Finally at the top there is an apex body known as National Consumer Disputes Redressal Commission (NCDRC) working hand-in-hand to provide cheap, speedy and simple redressal to consumer disputes in the country. A Consumer Court is quasi-judicial in nature and is directly accountable to the people. The central and the state governments are responsible for making policies with respect to the working of these courts. 24.3.3 Redressal Mechanism Now the question arises- How a consumer who feels cheated can get justice or relief in the form of compensations? For this he or she can approach any consumer court by filing a written complaint on his/her own or through a lawyer. The particular court that he/she must approach depends on the value of the commodity. In case of any product or in respect of a service valuing up to Rs. 20 lakhs the affected consumer can file a written complaint before the District Consumer Forums. If the value is up to Rs. 1 crore, then he/she has to approach the State Commission. Finally, for value above Rs.1 crore, the consumer should approach the National Commission for grant of relief. According to CPA the relief should be given within 90-150 days and if a consumer is not satisfied by the decision of the District Forum he/she can challenge the same before the State ECONOMICS Consumer Awareness Notes MODULE - 8 Contemporary Economic Issues 120 Commissions. If still not satisfied with the order of the State Commission, the consumer can go to the National Commission. 24.3.4 What You Need To Do? How to file a Complaint? For filing a complaint, the aggrieved consumer must always keep the cash memo, receipt or bill of the product he/she has purchased. The format to file a complaint is located on the booklet provided by consumer protection Act. Then the person must select the proper category under which he/she is filing the complaint. These categories are - unfair trade practice, deficiency of service etc. Then the nature of the complaint needs to be explained in simple words. The consumer should be clear about the fault and what he/ she wants as a remedy i.e a replacement or a refund or compensation in case of a service. The documents like the receipt or other evidences must be attached along with the complaint. There has to be three copies of the entire set; one for the complainant, one for the other party against whom the complaint has been made and one for the consumer court. Some nominal filing fees have to be paid to the court by the complainant in the form of a demand draft. It should be noted that a complaint should be filed within 2 years of the date on which the defect occurs. This is not dependent on the purchase date. The affected consumer can either appear in person, send a representative or a lawyer or even a letter. In case, a complainant has died, his legal hairs can go to the court. If not satisfied with decision of the lower court, the person must appeal to a higher court within 30 days of the lower courts’ order. Remember, however, that the court can fine you up to Rs. 10,000/- if it thinks that the consumer has filed a frivolous complaint. Check the latest rules by visiting local consumer rights officer or online at the web sites - ncdrc.nic.in and core.nic.in. Now a days communication through internet has become a way of life. So a person can also mail the complaint. The e-mail ID/Website is printed on the cover of the product. 24.3.5 Role of NGOs In case the producer/company/seller gives the aggrieved party a cold shoulder then the role of non- governmental organisations i.e NGOs becomes very important. One can lodge complaints with some NGO’s like Consumer Grievance (www.consumer grievance.com), Consumer Guidance Society of India (www.cgs_india.org), Common Cause (www.commoncauseindia.org) and Consumer Forum (www.consumer.org.in). NGOs not only help in filing a case but also they provide logistic, manpower and other supports. NGOs also conduct various programmes to educate consumers about their rights and responsibilities. One can also approach consumer help organisation called Jago Grahak Jago. Almost every newspaper provides complete information about it through advertisement. The online grievance form can be had by visiting the site. MODULE - 8 Contemporary Economic Issues 123 Consumer Awareness ECONOMICS Notes The redressal courts through their intervention help consumers get justice. Let us look into some cases where the retailers violate consumer’s right to redressal particularly in respect to goods bought during sale. “A busy doctor bought 3 pairs of trousers at a discounted price of Rs. 2000/- each, during a sale from a well known retail brand from a particular outlet. However to his utter surprise, the fabric just gave way within a few wears, even before it was washed. On his complaint a person in-charge of the company showroom took back one pair and said, it would be sent to the company’s quality cell for testing. A year has passed and he has neither heard from the company, nor got back his trousers. Should the doctor not askfor his money andalso forcompensation for all the discomfort undergone in purchasing the trousers? The doctor has the right to seek redressal as a consumer.” 24.4.6 The Right to Consumer Education It means to have access to programs and information that help consumers make better decisions before and after purchase. Instructions and guidelines for consumers are issued by the government departments and NGOs. This helps the consumers to take right decision with regard to purchase of a commodity. to bring Trademarks and Logos authentication marks such as ISI, AGMARK, BIS and other educational campaigns done in public interest. INTEXT QUESTIONS 24.4 Mention the appropriate consumer right to file a complaint with regard to the following 1. A person falling sick after consuming a packaged food item. 2. A seller forcing a buyer to purchase a certain brand of goods and not showing other varieties of goods. 3. Samir wants to buy a computer and wants to know the exact configuration from the seller. 4. Rekha was cheated by a seller and wants to file a complaint. 5. Reshma has gone to a district consumer forum against the local hospital to seek compensation for wrong diagnosis for which she had to spend Rs. 2 lakhs unnecessarily. 6. You have requested the concerned department of Delhi Government to give you booklet on consumer protection act. ECONOMICS Consumer Awareness Notes MODULE - 8 Contemporary Economic Issues 124 24.5 CONSUMERS’ RESPONSIBILITIES Consumer education is not always about rights of the consumers, but also about responsibilities and shouldering them honestly and sincerely. Let us highlight some of the issues here. 24.5.1 Dealing with Advertisements Advertisements have become a part and parcel of our lives and even if we try we cannot avoid them. Companies are trying to sell their products by making attractive audio- visuals, publishing only that part which may be eye catching and hiding other crucial information and so on. Consumers need to be cautious of such deceptive advertisements. Children are the worst victims. They need to be guided properly. 24.5.2 Buying Quality Certified Products There are lot of products which are certified by recognised agencies as safe to consume and good in quality. For example the Indian Standard Institute (ISI) conducts quality testing of many consumer goods. If found proper the product is labelled with ISI mark on it. For many food products the quality assurance is certified by seal called AGMARK. Consumers should choose products with ISI mark and AGMARK. A very important thing before purchasing food products or medicines etc is that the consumer must see the expiry date. 24.5.3 Demanding Bill of the Purchase Every consumer must demand the bill after purchase of goods and services. The bill is the proof of purchase and can be used to seek justice if the consumer feels cheated after buying the commodity. Through the bill the consumer also ensures that the government receives tax on the product because it is mandatory for the seller to mention the tax amount on the bill. Such act of the consumer makes him/her a responsible citizen of the country. 24.5.4 Being a Green Consumer A consumer must consume those products which do not cause damage to our environment. Plastic bag is one example which has caused serious damage to the environment. People should use biodegradable products which can easily mix with soil and water after they are disposed off. Similarly people should save electricity, gas etc by judicious use. Consumers are also responsible for automobile pollution in town and cities. They should use public transport system and eco-friendly vehicles. 24.5.5 Consumers as Managers Consumers can unite together to provide themselves and the community at large of a locality or village some basic needs such as drinking water supply, health, education etc. MODULE - 8 Contemporary Economic Issues 125 Consumer Awareness ECONOMICS Notes It is the government who acts as the manager for delivery of services. But the government departments are often blamed for inefficient and erratic delivery of such services. So consumers can unite to provide such services. Read the following story: Consumers as Managers (A true story from Gujrat) Gujrat has more than 13000 village ‘Pani Samitis’ which are acting as managers of service delivery at the village level. The village ‘Pani Samitis’ are formed in Gram Sabhas through consumers. They manage their in-village systems for water supply service upto the household level, with a strong sense of ownership. They are also testing the quality of water and providing quality assurance upto the consumers’ level. Community engagement for making people as managers has resulted in reducing the cost of delivery, timely and efficient delivery of water, efficient repairs of water supply system, efficient utilization of water resource, innovative tariff mechanisms measures for sustainability of water resources like developing ‘check dams’, ponds for recharging of ground water leading to conservation of water resources in the area. In a vast country like India consumers have a responsibility to stand by the government. You can also play a constructive role by joining hands with your local water, electricity, sanitation boards, through the local federations of your locality or Gram Sabhas of your village. 24.6 MAJOR CONCERNS OF CONSUMER MOVEMENT IN INDIA For successful consumer movement people need to be educated. India is not only highly populated but also culturally diverse and has vast number of illiterates. So bringing consumer awareness is a big task. It is slowly picking up and lots to be done in this regard. Two major concerns are (i) spreading consumer awareness in rural area of India and (ii) timely delivery of justice. Let us briefly discuss them below. 24.6.1 Consumer Awareness in Rural India On account of the globalization and liberalisation, increase in middle income and high income population in the villages our rural markets are also expanding. So companies are reaching with their products to our rural markets as well. But the rural consumers in India are generally ignorant and illiterate. So they are exploited by the manufacturers, traders and service providers. Rural consumers face problems like fake brands, spurious products, lack warranties and guarantees, imitation, unreasonable pricing, lack of varieties and so on. There is a need for spreading consumer awareness in the rural areas more seriously.