New Consumer Protection Law Is Live, 10 Lakh Fine For False Ads, Ecommerce Return Covered: 6 Facts

New Consumer Protection Law Is Live, 10 Lakh Fine For False Ads, Ecommerce Return Covered: 5 Facts
New Consumer Protection Law Is Live, 10 Lakh Fine For False Ads, Ecommerce Return Covered: 5 Facts

India is ready to welcome a change in its Consumer Protection Act with the launch of new sets of rules on 20 July, 2020. 


How Did  This Happen?

Prior to this, on July 8, 2019, the Consumer Protection Bill, 2019 was introduced in the Rajya Sabha by Union Minister Ram Vilas Paswan.

Interestingly, it has taken around a year for the new act to be notified, despite being passed soon and getting the President’s nod in August 2019. 

Before this, the Consumer Protection Act (1986) has been in force. 

The new Consumer Protection Bill, 2019 aims to protect and strengthen the rights of the consumers by establishing authorities, imposing strict liabilities and penalties on product manufacturers, electronic service providers, misleading advertisers, and by providing additional settlement of consumer disputes through mediation. 

Apart from that, the new act has also brought in structural changes in the consumer courts in number of members, honorarium, and staff cadre. 

How Does Consumer Protection Bill, 2019 Work?

With this new era of change, the new Consumer Protection Act guarantees six consumer rights.

1. Right To Be Informed

The consumer has all the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services for saving the consumer from unfair trade practices.

2. Right To Safety

The consumer has the right to be protected from the marketing of goods and services that can pose a threat to one’s life and property.

3. Right To Choose

According to this, the consumer has the right to access varieties of goods as well as services.

4. Right To Be Heard/Listened

 As per this rule, the consumer has all the right to be heard and all his interests will receive due consideration at appropriate forums.

5. Right To Seek 

This right provides guarantees a redressal against any unfair trade practices or anything which may lead to customers exploitation.

6. Right To Consumer Education

This rule will help in assuring an individual to be an informed consumer throughout their life and which may also prevent them from exploitation.

What Are Highlights Of The Consumer Protection Bill, 2019?

Compensation Amount Increase

According to the new act, consumers get an increased amount as compensation from errant sellers.

Not only that, the punishment for the latter instances has also been made more stringent. 

With this new move, the compensation amount has been increased to the point that the consumer can even receive up to Rs 1 lakh, if they are sold an adulterated or spurious product. 

On top of that, the seller may also be sentenced to up to six months of jail. 

Although, this compensation is applicable, only in the case where the consumer has not been damaged by the product. 

While in cases where they are directly or indirectly harmed by the product sold, the consumer can even receive up to Rs 5 lakh as compensation, and the jail term for the seller could extend up to seven years. 

In the extreme situations where if the consumer dies then the compensation could range up to Rs 10 lakh and the seller could be sentenced to a life imprisonment term. 

Further, in case of a subsequent offense, the fine may also extend to Rs 50 lakh and imprisonment of up to five years.

Structural And Other Changes

With the new law, the district forum has been renamed to district commission. 

Also, the central government is expected to set up a Central Consumer Protection Authority (CCPA) which will ensure to promote, protect, and enforce the rights of consumers.  

Additionally, they will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.  

For conducting inquiry or investigation into such violations, the CCPA will have an investigation wing, headed by a Director-General.

The District CDRC will accept complaints in cases where the value of goods and services does not exceed Rs one crore.  

While, the State CDRC will entertain complaints where the value is more than Rs one crore but does not exceed Rs 10 crore.  

Moreover, the complaints having the value of goods and services over Rs 10 crore will be entertained by the National CDRC.

Apart from that, the opposite party needs to deposit 50 per cent of the amount ordered by the district commission before filing an appeal before the state commission. 

With these new changes the earlier ceiling of maximum of Rs 25,000 has been removed. 

Also, the limitation period for filing of appeal to state commission has been increased from 30 days to 45 days with retaining power to condone the delay.

E-commerce Return Covered

The new rules also mentions the duties and liabilities of e-commerce entities (Market place and Inventory Model) and sellers on marketplace e-commerce entities.

Now, every e-commerce entity is required to provide details about it on its platform. 

They also have to acknowledge the receipt of any consumer complaint within forty-eight hours and redresses the complaint within one month from the date of receipt.

Additionally, they will have to provide the information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc.

While in case of marketplace, they will have to provide all relevant details about the goods and services offered for sale, including country of origin, which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage.

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