Explained: How The New Consumers Protection Act Will Empower Indian Buyers, Check Celebrity Endorsements

The new Consumer Protection Act, 2019, which came into effect yesterday (20 July) replacing the 1986 Act, gives more power to a customer of a product, including filing of a case at his/her place of residence and covers products bought online.

The new Act now has provisions to deal with class actions, product liability, misleading advertisements and liability for celebrity endorsements.

It also addresses concerns of the wired world tackling e-commerce, direct selling and telemarketing.

Purchase of food is also covered under the new law.

The new legislation empowers the National Consumers Dispute Redressal Committee as well as the State Commission to declare null and void any terms of a contract while purchasing a product.

This will go a long way in protecting consumers, who are often subject to contract conditions that favour a seller or manufacturer.

The new law has provisions for setting up of a Central Consumer Protection Authority to enforce the right of consumers.

This authority has the power to intervene in case of unfair trade practices, recall a product and return products of poor quality or ones that don’t meet quality norms.

A special feature of the new Consumer Act is the provisions to act against misleading advertisements, including a fine of up to Rs 10 lakh and a jail term extending to two years.

Celebrities will now have to exercise caution in endorsing a product.

Though they might not get imprisoned in case of misleading advertisements, they can be banned from advertising as a penal measure.

According to The Consumer Protection Act, 2019, endorsement of a product by a celebrity will not include any message, demonstration, verbal statement, the depiction of name or seal of any institution or organisation.

The celebrity will be held responsible because it “makes the consumer believe that it reflects the opinion or finding or experience of a person endorsing the product”.

The new Act ensures that Indian buyers will now benefit from the widened ambit of consumer protection.

These provisions were not included in the 1986 Act despite the global community becoming a wired world at least two decades ago.

The new Act permits a consumer to file a case from the place of his/her residence and has provisions that do not make it mandatory for a consumer to be represented by a lawyer.

It also mandates a fixed timeline for mediation of the consumer grievance.

The new Act has armed the authorities to take action against unfair trade practices too.

This has been facilitated by including under “consumer rights” the provision of offering a buyer “protection to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services”.

Under the new provisions, the district consumers forum has been re-designated as the district consumers division, which has been empowered to hear cases up to a product value of Rs 1 crore.

Earlier, the forum’s cap was Rs 20 lakh.

The State consumers commission can take up cases up to a product value of Rs 10 crore.

Anything above this value will be dealt with by the National Consumers Dispute Redressal Commission.

The district and state divisions can also encourage mediation between the disputing parties.

The new law now makes it mandatory for a seller to be fully aware of the consequences of selling a spurious product or a product manufactured by a suspect manufacturer.

Failure to issue a bill for the sale of the product will also attract penalty, while also refusing to take back a defective product.

The new legislation also empowers the Central Consumers Protection Authority to have an investigation wing headed by a director-general to conduct a probe into consumer complaints.