Introduction: Consumers create a demand for a variety of items. Material resources available in the market are directed towards satisfying human requirements. Purchasing is often daily routine. The basic knowledge of economic principles, selection of products and awareness of consumer rights are both useful and necessary for any one.
Definition of Consumer:
We are all consumers. We spend money, in some way, everyday, for all basic needs like food, clothing, shelter, health, education etc. We always buy necessary things.
“A consumer is anyone who buys or uses any kind of product and services. Homemaker or any family member is consumer in an economic and marketing system”.
Consumer should act rationally. They should accept a reasonable level of responsibility while exercising choice and entering into transactions in the market place.
a. Be Informed.
• It is responsibility of the consumer that he/she should be properly informed.
• Consumer should identify his/her ‘needs’ and differentiates them from ‘wants’.
• He/she should obtain information about goods and service. He/she should compare prices, quality and other features with competing goods.
• He/she should avoid hasty and impulsive decisions.
He/she should not enter in schemes like “We will make you rich”, “We will make you slim within one month”, etc.
b. Be Quality Conscious.
To put a stop to adulteration and corrupt practices of product they buy, they should look for the standard quality certification marks like ISI, Ag-mark, FPO, Wool-mark, Silk-mark, Eco-mark, Hallmark etc while making the purchases. ISI stands for Indian Standard Institute, which was the authorized body of Government of India to prescribe and certify quality standards for various Indian products. The name of this body was changed to Bureau of Indian Standard in 1986.
A similar emission norm, which is applied to Indian cars, is Bharat II.
Hallmark – While buying any gold jewellery how can a customer ensure that the article on which he/she is going to invest huge amount of money is made of pure gold? Generally, we cannot recognize the purity of gold by looking at it. Normal eye cannot recognize the purity of gold content. This may give jewelers ample scope to deceive the customers. Thus, to protect the customers against victimization by impure gold quality, Bureau of Indian Standards (BIS) has started giving a special symbol on gold jewellery known as ‘hallmark’. This mark ensures the purity of gold jewellery by indicating its gold content. In India, BIS has established Assaying and Hallmarking centers all over India to evaluate and test the quality of gold content in the jewellery.
Besides the above standardization marks you also find few other marks or symbols on various products. The following are some of these marks.
c. Beware of Misleading Advertisements
The advertisements exaggerate the quality of products. Hence, the consumers should not rely on the advertisement and carefully check the product or ask the users before making a purchase. In case there are discrepancies, the same should be brought to the notice of the sponsors and the appropriate authority, if needed.
d. Responsibility to inspect a variety of Goods before making Selection
The consumer should inspect a variety of goods before buying the goods and services. For this purpose he/she should compare their quality, price, durability, after sales service etc. This would enable the consumers to make the best choice within the limit of their own resources.
e. Collect Proof of Transactions
The consumer should insist on a valid documentary evidence (cash memo/invoice) relating to purchase of goods or available of any services and preserve it carefully. Such proof of purchase is required for filing a complaint. In case of durable goods the manufactures generally provide the warrantee/guarantee card along with the product. It is the duty of consumers to obtain these documents and ensure that these are duly signed, stamped and dated. The consumer must preserve them till the warrantee/guarantee period is over.
f. Consumers must be Aware of their Rights
The consumers must be aware of their rights as stated above and exercise them while buying goods and services. For example, it is the responsibility of a consumer to insist on getting all information about the quality of the product and ensure himself/herself that it is free from any kind of defects.
g. Complaint for Genuine Grievances
As a consumer if you are dissatisfied with product/services, you can ask for redressal of your grievances. In this regard, you must file a proper claim with the company first. If the manufacturer/company does not respond, then you can approach the forums. But your claim must state actual loss and the compensation claim must be reasonable. At no cost fictitious complaints should be filed otherwise the forum may penalize you.
h. Proper Use of Products / Services
It is expected from the consumers that they use and handle the product/services properly. It has been noticed during the guarantee period people tend to reckless use of product, thinking that it will be replaced during the guarantee period. This practice should be avoided.
a. Payments and Checking of Goods
• Pay required amounts on time and never attempt to evade lawful liability.
• Check receipt, statement or transaction record to ensure that correct transactions details are recorded.
• Keep receipts, product manuals, maintenance/warranty documents for future usage.
• Send a warranty card (particularly when warranty is offered free of charge) to the manufacturer so that future direct contact can be made if a problem occurs.
For goods acquired by hire purchase, consumers are obliged to make periodic payments until full settlement. In the event that the goods are found to be defective, consumers should notify the seller or agent for repair and not stop payment. Otherwise the financing company may never recover the products for re-sale and consumers are responsible to make up the price difference.
b. Return of Goods
Some retail stores might willingly give refunds or exchange goods merely because a customer has a change of mind (not related to merchantable quality of products); even though there is no legal obligation to do so. However, not all business might be able to afford such tolerant behavior, and traders are free to decide it is not in their commercial interests to do so. They are free to develop their own business reputation in this regard, in the same way that consumers are free to take their business elsewhere if they feel aggrieved.
c. Product Safety
• Check products thoroughly and immediately upon delivery.
• Raise any problems with trader first, before attempting to contact the manufacturer.
• Always read any warnings and product information as to installation instructions, maintenance and safe operation.
Use products according to the instructions and only for the intended purposes.
d. Product Recalls
Heed announcements by manufacturer or trader on product recalls on the relevant product.
e. Complaint Handling Services
If you have a problem with certain goods or services
• Assess carefully what has been promised by the trader at the time of purchase and in the terms of the contract and promotional literature, to see if you have a justified case.
• Most traders are willing to resolve complaints amicably. Therefore, always attempt to first seek resolution of your complaint with the business that provided the good or services, before approaching the Consumer Council.
• Specific government departments, government agencies or business associations have specific responsibilities to enforce the law. For example, Customs & Excise Department handles complaints on unsafe products and short-weigh, whilst the Food and Environmental Hygiene Department handles complaints on food. It will be more efficient and effective for consumers to approach these departments direct.
• Have realistic expectations as to what remedy you would be entitled to claim from a trader when you experience problems with a product. Remedial action for a faulty product may be in the form of repair, replacement or refund. However, the latter two measures would not necessarily apply if for example a repair will restore a faulty product to its original fault free condition. Consumers are advised to consider offers from traders objectively and in a harmonious spirit, recognizing that the traders also may face costs and inconvenience as a result of the fault.
• Complaints against poor attitude of shopkeepers/services personnel should preferably be referred to and handled by, senior management of the company concerned.
• Ensure that you have copies of relevant receipts, invoices, contracts and promotional literature, to give documentary support to any complaints or actions that may arise in the future.
• Always be truthful in your statements and avoid exaggerating and omitting facts that are relevant to the situation.
Problems faced by consumers:
1. Variation in prices The consumer has to pay different prices for the same item at different places. Big shops are expensive as they spend some money on the maintenance of shop, advertisements and free home delivery which is hidden at expense of the consumer. Some shop keepers charge higher price than the printed ones by putting their own price tags or increase the price by adding local taxes. The consumer does not know whether he is paying the correct price or not. To avoid this the consumer should verify price from various shops or from super bazaar, because of this, the consumer cannot be deceived.
2. Artificial Scarcity
Sometimes daily consumed items like butter, potatoes, onions, rice, wheat etc. are not available in the market or one may get these buy paying higher prices. Normally such scarcities are artificial. The moment there is possibility of price rise of a commodity, it vanishes from the market. Immediately after price is increased it appears in the market. In such situations either the consumer has to do without these items or pay a higher price. For ex. festival, before budget.
Adulteration of goods is one such problem which is faced by the consumer in day-to-day purchases. In the present times, the biggest problem is that the consumer does not get pure commodities like ghee, milk, spices, maida, besan, cereals, sugar etc. even if he is prepared to pay higher price. Adulteration of yellow powder in turmeric powder, small pebbles in rice, starch in milk and cheese, plastic pieces in sugar and used tea leaves are generally sold in the market.
Apart from food items, this problem is there for other goods. e.g. clothes, medicines, drugs, cosmetics, household equipments. The government of India has enacted an act called PFA (Prevention of Food Adulteration) in 1954 which was implemented in 1955. Under this act, minimum standards have been fixed for all food products in the market. If a food product does not confirm to these standards, it will be treated as adulterated.
4. Unfair means of measurements
Standard weights and measurements are not used in the market. Under weights, stones are used in place of standard weights, Boxes, bottles used in packed goods and measuring glass or other containers have a shape that would give lesser quantity to the consumer though the size appears normal. In 1976, Standard Weights and Measurements Act passed.
5. Misleading advertisements
Everyday new products are launched. Normally manufacturers give information account of their products. After the purchase, the consumer realizes that it does not match with what has been claimed in the advertisement. Such misleading advertisements cheat the consumer. For ex. Advertisement of Beauty cream.
6. Sale of sub-standard goods
In place of standard goods, sub-standard goods are sold at higher price. For example, selling furniture made up of inferior quality wood, using sub-standard sheets in steel cupboards, furniture. Consumer knows it only after use. For ex. Textile, food items, cosmetics, ornaments.
Rights of Consumer
It is the consumer who fundamentally drives the economy. Therefore the welfare of the consumer is vital to National Interest. The world celebrates March 15th as the Consumer’s Day. However in India December 24th is celebrated as the National Consumer Day since the Consumer Protection Act, 1986 was enacted on this day by the Indian Parliament.
The following consumer rights have been recognized.
John F. Kennedy, the former U.S.A. President had given four rights to consumers, namely the right to safety, right to choose, right to information and right to be heard. This was accepted by United Nations in 1985. The UN added the following rights to the list; right to basic needs, right to representation, right to consumer education and right to healthy environment. In India, the Consumer Protection Act, 1986 has also provided the same rights to the consumers.
1. Right to safety
It is the right of the consumers to be protected against goods and services which are hazardous to life. For example, defective vehicles could lead to serious accidents. Thus, right to safety is an important right available to the consumer which ensures that manufacturers shall not produce and sell substandard and dangerous products. Only recently there was mass protests and boycott of soft drinks due to presence of hazardous pesticides beyond permission limits.
2. Right to be informed
The right to be informed is an important component of consumer protection. The consumer must be provided with adequate and accurate information about quality, quantity, purity, standard and price of goods and services. The manufacturers provide detailed information about the contents of the product, quantity, date of manufacturing, date of expiry, maximum retail price, precautions to be taken etc. on the label and package of the product. Such information helps the consumers in their buying decisions.
3. Right to be heard
This right has three interpretations. This right means that consumers have a right to be consulted by Government and public bodies when decisions and policies are made affecting consumer interests. Also, consumers have a right to be heard by manufacturers, dealers and advertisers about their opinion on production and grievances of the consumers. Many manufacturers have set up consumer cells to attend consumers’ complaints. Thirdly, consumers have the right to be heard in legal proceedings in law courts dealing with consumer complaints.
4. Right to redressal
This is defined as the right to seek redressal against unfair trade practices or restrictive trade practices. The consumers have right to redressal of grievances relating to the performance, grade, quality etc. of goods and services. If required, the product must be repaired or replaced by the seller or manufacturer.
5. Right to choose
This right is defined in Consumer Protection Act, 1986 as the right to be assured, to have access to a variety of goods and services at competitive prices. It also includes right to select from variety of items. If the market has enough varieties of products at highly competitive prices, the buyers have an opportunity of wide selection. However in case of monopolies like railways, postal service and electricity supply etc. it implies a right to be assured of satisfactory quality of service at a fair price.
6. Right to get consumer education
This is the right of every citizen to be educated on matters related to consumer protection. This right ensures that consumers have access to information and material that would enable them to make better purchasing decisions. They are expected to impart information and knowledge about laws unfair means adopted by the products, insistence on bill or receipt at the time of purchase and procedure to be followed while making complaints. Consumer education may be imparted through school and college curriculum and also consumer awareness campaigns run be both Government and Non-governmental agencies (NGO).
7. Right to have basic needs to be satisfied
Fulfillment of basic needs is required to lead a normal life. Consumers need to understand that only a safe environment can ensures the fulfillment of their rights. The basic needs are good food, proper housing conditions and proper clothing etc. It includes right to basic goods and services. Everyone has right to education.
8. Right to healthy and safe environment
This right has been incorporated in the bill of rights which enhances the scope and significance of modern consumerism. Consumerism is an organized expression for improving the quality of life. Consumer has a right to have good and pure water, air, food and the like. Human life should be made free from any type of pollution. For example, water and air pollution, noise pollution etc.
Guidelines for Wise Purchase
Purchasing for the home involves many decisions related to the use of money and time. A satisfactory standard of living is more nearly attainable if the family makes purchasing decisions based on goals and values and on knowledge of commodities. The present-day market offers varied products and services for our use. Everyday new products and services are introduced in the market and existing products are improved. It is necessary to know about different products, their brands and models available. Let us know about the buying process so that we can be wise consumers.
1. How to buy
A consumer may be defined as a person who chooses goods and services and spends money to obtain them either for own use. Everybody knows that we have to pay money to buy any product and services. Now-a-days different ways and means of paying for the goods and services are available.
• Payment can be made by cash, cheque or credit card or debit card.
• Sometimes sellers accept a part payment and the balance amount is paid in installments. This is possible under hire-purchase scheme.
• For buying durable goods loans are available from banks and other agencies etc. They give loan and get money back from consumer in EMI (Equated Money Installment). The rate of interest varies from time to time. The consumer must evaluate all the factors before buying a product.
• Sometimes the seller delivers goods purchased at the doorstep. i.e. home delivery system. Sale promotion schemes, door-to-door sale is also observed. The consumer should take advantage of this delivery system carefully.
2. When to buy
When to buy is also a point for consideration. We get discount during festive season. Sometimes sales promotions schemes are offered and we get added advantages. For example, ‘But one, Get one free’, ‘Buy a scooter with free insurance’. We can buy some products when such schemes are announced. But always keep in mind the hidden cost of the item while buying one and getting one free. For example, benefit buying products like motor vehicles before 31st March rather than buying it in the next financial year.
Some manufacturers give ‘off-season’ discount on seasonal products. For example, buying an air-cooler in winters, woolens in summer. One should not blindly go for availing these discounts.
3. From where to buy
This is regarding the decision whether to buy from a retailer or wholesaler or from the authorized dealer.
• It is advisable to but the products from established shops. Avoid buying products from the hawkers or itinerants.
• While deciding to buy from the established shop you have to consider the reputation of the dealer or the wholesaler or the retailer to ensure the quality of the product.
• Sometimes, away from hometown, you find some products attractive and beneficial. You must find out whether maintenance of such a product is possible at your hometown or not.
• For perishable item you have to ensure that it remains fresh till it reaches your home. After sale service.
4. How much to buy
This very important factor which is to be considered while buy.
• Always buy the things which are necessary.
• Never buy in bulk and waste the food items or the other things.
• Avoid impulse buying ex. Supermarkets
• Consider resources at your disposal ex. Money and then spend, “cut your coat according to the cloth” is an important saying.
Money resource is limited. Use it properly.
5. What to buy
Before buying any product, it is necessary to note standardization mark issued by BIS (Bureau of Indian Standards). For example, ISI mark for electrical goods, cement, mineral water, biscuits etc. Before buying one should check whether the product bears ISI certification mark with number. The mark carries different numbers for different numbers for different products. ISo mark, FPO, Agmark, Woolmark, Silkmark, Eco-mark, Hologram, Hallmark, Vegetarian and Non-vegetarian mark are such standardization mark which are to be taken while purchasing any product.
Consumer Protection Act
(a) Need for consumer protection
A consumer is a person who consumes or uses any goods and services. Goods may be consumable like wheat, sugar, salt, fruits, vegetables etc. or durable items like television, refrigerator, mixer, bicycle, scooter etc. It is the consumption of goods and services that makes the person to be called as ‘consumer’.
In the eyes of law, both the person who buys any goods or hires any service or one who uses such goods and services are termed as consumers. For example, if the father buys apple for son and the son consumes it, father as well as son are treated as consumer. In other words, even the buyer of goods and services whether he uses them himself or purchases them for consumption or use by some other person(s) is treated as consumer in the eyes of law.
Consumer Protection means safeguarding the interest of rights of consumers. It refers to the measures adopted for the protection of consumers from malpractices by the business and providing them speedy redressal of their grievances. Sale of adulterated gods, use of false weights and measures are some of the malpractices.
Consumer protection is needed to make them more mature and conscious of their rights against malpractices. Consumer satisfaction is the key to success of business. Father of Nation, Mahatma Gandhi had once given a call to manufactures and traders to “treat your consumers a God”.
The main objectives of Consumer Protection Act are to generate awareness among consumers about their rights, responsibilities. It is also to motivate them not to compromise on quality and standards of goods and services and seek redressal in consumer courts.
(b) The Consumer Protection Act, 1986
The Consumer Protection Act, 1986 is a milestone in the history of socio-economic legislation in the country. It is one of the most progressive and comprehensive pieces of legislation enacted for the protection of consumers.
All the provisions of the Consumer Protection Act came into force with effect from 01.07.1987 throughout the country except in the state of Jammu & Kashmir. The state of Jammu & Kashmir has enacted its own legislation in this field.
Definition of Consumer
Under the Consumer Protection Act, 1986 the word “consumer” has been defined separately for the purpose of goods and services.
• For the purpose of goods, a ‘consumer’ means
• One who buys any goods for consideration
• Any user of such goods other than the person who actually buys it, provided such use is made with the approved of the buyer.
(The expression ‘consumer’ does not include a person who obtains such goods for resale or for any commercial purpose)
• For the purposes of services, a consumer means
• One who hires any service(s) for consideration
• Any beneficiary of such service(s) provided.
The service is available with the approval of such person.
Salient Features of Consumer Protection Act, 1986
The salient features of Consumer Protection Act, 1986 are as follows.
• It applies to all goods, services and unfair trade practices unless specifically exempted by the Central Government.
• It covers all sectors whether private, public or co-operative.
• It provides for establishment of consumer protection councils at the central, state and district levels to promote and protect the rights of consumers and a three their quasi-judicial machinery to deal with consumer grievances and disputes.
• It provides a statutory recognition to the six rights of consumers.
Filing of Complaints
A complaint must be filed with the appropriate forum.
• Who can file a complaint?
The following persons can file a complaint under the Consumer Protection Act, 1986.
• A consumer
• Any recognized voluntary consumer association whether the consumer is a member of that association or not
• The central or any state Government
• One or more consumers where are numerous consumers have same interest
• Legal heir or representative in case of death of a consumer
• What complaints can be filed?
A consumer can file a complaint relating to any or more of the following.
• An unfair trade or a restrictive trade practice adopted by any trade or service provider
• Goods bought by him suffer from one or more defect
• Services hired or available of suffer from deficiency, in any respect
• Price charged in excess of the price
• Fixed by or under the law for the time being in force
• Displayed on the goods or the package
• Displayed in the price list
• Agreed between the parties
• Goods or services which are hazardous or likely to be hazardous to life and safety when used
Where to file a complaint?
If the value of goods and services and the compensation claimed does not exceed Rs. 20 lacs, the complaint can be filed in the District Forum. If it exceeds Rs. 20 lacs but does not exceeds Rs. 1 crore, the complaint can be filed in the State Forum and if it exceeds Rs. 1 crore, the complaint can be filed before the National Commission.
How to file a complaint?
• A compliment can be made in person or by any authorized agent or by post.
• The complaint can be written on a plain paper.
• The complaint should be supported by documenting evidence in support of the allegation contained in the complaint.
• The complaint should specify the relief sought.
• It should contain the nature, description and address of the complainant as well as the opposite party.
• It should contain the facts relating to the complaint and when and where it arose.
What are the reliefs available to consumers?
Depending on the nature of complaint and the facts of the case, the Redressal Forum Commission may order one or more of the following reliefs.
• Removal of defects from the goods or deficiencies in services in question
• Replacement of the defective goods
• Refund of the price paid
• Award of compensation for loss or injury suffered
• Discontinuance of unfair trade practices or restrictive trade practices or not to repeat them
• Withdrawal of hazardous or dangerous goods from being offered for sale
• Provision of adequate costs to aggrieved parties
Time limit for filing the case
The consumer can file the complaint within two years from the date on which the case of action had arisen. However, it may be admitted even after the lapse of two years if sufficient cause is shown for the delay.
Time limit for deciding the case Every complaint must be disposed off as speedily as possibly within a period of three months from the date of notice received by the opposite party. Where the complaint requires laboratory testing of goods, this period is extended to five months.
Machinery for Settlement of Grievances
The judicial machinery set up under the Consumer Protection Act, 1986 consists of consumer courts (forums) at the district, state and national levels. These are known as District Forum, State Consumer Disputes Redressal Commission (State Commission) and National Consumer Disputes Redressal Commission (National Commission) separately. Let us have a brief idea about their composition and roles.
• District Forum
This is established by the state governments in each of its districts.
• Composition : The district forums consists of a Chairman and two other members on of whom shall be a woman. The district forums are headed by the person of the rank of a District Judge.
• Jurisdiction : A written complaint can be filed before the District Consumer forum where the value of goods or services and the compensation claimed does not exceed Rs. 20 lacs.
• Appeal : If a consumer is not satisfied by the decision of the District forum, he can challenge the same before the State Commission, within 30 day of the order.
• State Commission
This is established by the state governments in their respective states.
• Composition : The State Commission consists of a President and not less than two and not more than such number of members as may be prescribed, one of whom shall be a woman. The Commission is headed by a person of the level of High Court Judge.
• Jurisdiction : A written complaint can be filed before the State Commission where the value of goods or services and the compensation claimed exceeds Rs. 20 lacs but does not exceed Rs. 1 crore.
• Appeal : in case the aggrieved party is not satisfied with the order of the State Commission, he can appeal to the National Commission within 30 days of passing of the order.
• National Commission
The National Commission was constituted in 1988 by the central government. It is the apex body in the three tier Judicial Machinery set up by the government for redressed of consumer grievances. Its office is situated at Janpath Bhawan (Old Indian Bhawan), A wing, 5th Floor, Janpath, New Delhi.
• Composition : It consists of a President and not less than four and not more than such members as may be prescribed, one of whom shall be a woman. The National Commission is headed by a sitting or retired judge of the Supreme Court.
• Jurisdiction : All complaints pertaining to those goods or services and compensation whose value is more than Rs. One crore can be filed directly before the National Commission.
• Appeal : An appeal can be filed against the order of the National Commission to the Supreme Court within 30 days from the date of order passed.
It may be noted that in order to attain the objects of the Consumers Protection Act, the National Commission has also conferred with the powers of administrative control over all the State Commissions by calling for periodical returns regarding the institution, disposal and pending of cases and issuing instructions for adoption of uniform procedures etc.
Questions / Exercise
1. Define consumer. What are the responsibilities of consumer?
2. What are the problems faced by the consumer?
3. What are the consumer rights? Write in detail about right to safety.
4. Write short notes on the following :
a) right to be informed
b) right to be heard
c) right to redressal
d) right to consumer education
5. Write a short note on right to have basic needs to be satisfied.
6. What points will you consider while making wise purchase?
7. Write notes on :
a) How to buy?
b) When to buy?
c) How much to buy?
d) From where to buy?
8. Explain the terms :
a) ISI mark
e) Vegetarian and Non-vegetarian mark
9. What is the need for Consumer Protection?
10. Write in brief about :
a) Who can file a complaint?
b) What complaints can be filed?
c) Where to file a complaint?
d) How to file a complaint?
e) What are the reliefs available to consumers?
f) Time limit for filing the case.
g) Time limit for deciding the case.
11. Match the pairs :
a) ISI mark i) Hologram
b) FPO ii) Woolen Products
c) Wool-mark iii) Fruit Products
d) Eco-mark iv) Air Pollution Control
e) Silver color sticker v) Electrical Goods
f) Euro II vi) Environment Pollution Free
12.Give short answers to the following :
a) Give the meaning of consumer.
b) What is meant by Consumer Protection?
c) State any two examples of Consumer Exploitation.
d) Mention any four standard quality certification marks.
Exercise: Prepare list of items bearing any standardizing marks or symbols like ISI mark, Ag-mark, FPO, Hologram, Barcode, Vegetarian, Non-vegetarian mark.