consumer protection act india

Need for consumer protection act in an era where consumer is the king Gaurangi Sawant Aliasgar Mojawala Gaurav Karnik Farzeen Shaikh Anand Bakshi Harsh Sheth Girish Chatterjee Aditya Palishkar Aditya Bagayatkar "A consumer is the most important visitor on our premises. He is not dependent on us, we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving us opportunity to serve him” - Mahatma Gandhi Consumer Rights • right to safety • • • right to basic needs right to be informed right to choose • • • right to be heard right to redress right to consumer education • right to a healthy environment Deceptive Advertising • An advertisement which is potentially misleading or literally false is deceptive. • Potentially misleading ads are difficult to evaluate because miscomprehension may often occur. – Miscomprehension is a problem for firms because the audience does not understand the message being delivered. Examples contd.. Deception Examples contd.. HINDUSTAN TIMES(MUM)29Sep2005 Jago Grahak Jago An Advertisement issued by the Government of India in public interest What made the government spread awareness about the consumer law? • Rising cases of duping of consumers •Political interest of ruling party •Common consensus in Parliament Negligent Consumer Behavior • Negligent behavior is composed of actions and inactions that may negatively affect the long-term quality of life of individuals and society. • This type of behavior can occur in two different contexts: – Product Misuse – Consumption of Hazardous Products How does International consumer protection differ from Indian consumer protection? Indian Cases Case#1 • • Redressal filed against: Indian Airlines Issue: not allowing passenger to board the flight despite the fact that the passenger had flight tickets booked • Compensation: Rs. 10,000 Case#2 • Redressal filed against: United Breweries Ltd • Issue: presence of protein impurity in beer • Compensation: Rs. 5,000 Case#3 • Redressal filed against: Shoe crafts • Issue: Sale of faulty camera from the grey market with mismatch in serial number on guarantee card • Compensation: Rs.3033 International Cases (US) Case #1 • Redressal filed against: SlimAmerica, Inc • Issue: false advertising claims about a health product (dieting, slimming) • Compensation: $8.3 million (Rs.32.3 crores) Case#2 • Redressal filed against:Christiana Hospital • Issue: wrong medication leading to death of patient • Compensation:$1.6 million (Rs.6.2 crores) Case#3 • Redressal filed against: Trans Union • Issue: misrepresentation of identity and inappropriate credit record upload • Compensation:$ 800,000 (Rs.3.1 crores) Our Experiences Despite the consequences: • No person has been convicted and sent behind bars during the last 20 years (excepting 2 or three cases) • • Cases if launched takes 10 to 20 years for the trial to complete Delay frustrates the efforts and encourages spurious manufacturing • For want of deterrent punishment, same manufacturer carry on manufacturing under different name and style Drawbacks of the existing system • • • • Inadequate awareness Burden on law and order machinery - additional load Delays in the judicial system Deficiency in existing laws Not deterrent enough : Not cognizable Punishment not enough Loopholes - bonafide belief by re-seller • No Nodal agency to exclusively deal with the Issue. • No Single window for investigation/enforcement The three tier system National Commission (for claims exceeding 20 lakhs) State Commission (for claims betwwen 5 & 20 lakhs) District Forum (claims upto 5 lakhs) Role of regulators in consumer protection 1. The need for regulators to provide formal recognition for (a) individual consumer rights and (b) the role of consumer organisations in representing consumer interests. 2. The need for regulators to establish mechanisms for handling consumer complaints – from simple complaints desks to fair and equitable ADR systems. Also, how complaints can be converted into policy. 3. The need to foster consumer awareness through education and information campaigns on consumer rights and responsibilities. Criticism on current Drug Market in India • • • Why Drug? - Consumption of wrong drug affects life Indian Health in danger Clinical Trial Racket – Outsourcing of dangerous drug trials to India for cheap availability of patients, patients made consumers in lieu of a promise of a better health with a signature on self-life-responsibility form Banned drugs still in market: PHENYLPROPANOLAMINE : cold and cough. Reason for ban : stroke Brand name : Vicks Action-500 Company name: Procter & Gamble PHENOLPHTHALEIN: Laxative. Reason for ban : Cancer. Brand name : Agarol OXYPHENBUTAZONE: Non-steroidal anti-inflammatory drug. Reason for ban : Bone marrow depression. Brand name : Sioril PIPERAZINE: Anti-worms. Reason for ban : Nerve damage. Brand name : Piperazine • Milestones of the consumer movement • • formation of the Passengers and Traffic Relief Association and the Women Graduates Union, Bombay, during 1915 The Consumer Guidance Society of India (CGSI), All India Bank Depositors Association; Bombay Civil Trust, Bombay; Surat Consumer Association, Surat; Jyoti Sangh Grahak Suraksha Vibag, Ahmedabad were all set up in the Sixties The International Organisation of Consumers Union (IOCU) was also set up during 1960. The World Consumer Congress meets every three years The Fair Trade Practice Association was set up in 1965 Consumer groups also came up in Karnataka, Andhra Pradesh, Tamil Nadu, Gujarat, Rajasthan, and Delhi. During 1969, the Monopolies and Restrictive Trade Practices Commission was set up under the MRTP Act of 1969 Consumer Education and Research Centre (CERC), Ahmedabad also came up During 1983, the Consumer Unity and Trust Society (CUTS) began out of a rural newspaper Gram Gadar (Village Revolution) in Rajasthan A major breakthrough came during 1986 when Parliament, under the leadership of then Prime Minister Rajiv Gandhi passed a law for Consumer Protection (COPRA - 1986). Development of synergy by and among the VCOs by the formation of State level and nation level federations in early nineties SR. No. 1 2 3 Name of agency National Commission State Commission District Forums Total • • • • • • • • • Cases filed since inception 53310 440102 2519282 3012694 Cases disposed of since inception 43488 328911 2286543 2658942 Cases pending 9822 111191 232739 353752 % of total disposal 81.58% 74.74% 90.76% 88.26% Conclusions • Incorporation of US policies in consumer protection on the basis of these problems: – – – – – – – – – – – – – – – compensation and redressal process timeline Unfair company policies Strong political and financial support to do illegal trade practices Improper drug content labeling, side effects, dosage, mrp, mfd date Copy of brand name, product, logo, duplicating products, fakes No refund on lack of service or product dissatisfaction No compensation on harassment Inferior manufacturing/ improper raw material incorporation including banned ingredients False promises, marketing strategies, duping consumer off their pockets Bureaucratic behavior of government officials on consumer redresses Unethical mode of product manufacture including, polluting the environment, heavy use of chemicals (pesticides, lead, carcinogenic) Breach of animal rights, use of animal origin products in pure vegetarian category Misleading advertisements providing false product performance information Lack of provision to spread awareness in consumers Manipulation of existing consumer law by private organizations Recommendations • • • • • • • • • • • • • • • • • Make the forums more consumer friendly Initiate action against beauracrats and red-tapism Regular product testing Free legal counseling Conduct workshops in schools, colleges, village panchayats and in offices Encourage consumer clubs Research on issues on consumer concern Publish regular articles on current scenarios to keep the consumer updated with malicious practices Levy heavy charges on those found guilty under the consumer protection act. Strict norms for advertisements and their promises Regular check on authenticity of the claims made in the advertisements The brand ambassadors should be equally held liable if the brand they promote fails to keep up with its claims. Rolling back of distributed banned goods Compensation for product side effects Routine inspection of plant, storage, manufacturing, logistics and distribution and upload of data for public usage MIS information upload for public usage Real sales info, bad product report, quality check results about product uploaded for public usage Recommendations on Food and Drug – life saving measures • • • • • • • • • • • • Labeling process upgrade: includes price, mfd dt, contents, effect of product on virtual man©, ingredients, expiry, calorific content, effect on pregnant women, diabetic, bp patients, allergen content, preservatives, stabilizers, consumer forum complaint form Setting up a drug survey system to carry out harmful effects of drugs on patients Training given to doctors and tougher laws on prescription of banned drugs Nabbing of illegal drug manufacturers and exporters Rolling back of distributed banned goods Compensation for product side effects Verbal, video verification and documentation, text receipt of purchase of product Routine inspection of plant, storage, manufacturing, logistics and distribution and upload of data for public usage Real sales info, bad product report, quality check results about product uploaded for public usage Information about responsible official available to the public incase of a consumer issue Distribution of consumer law pamphlets along with products Clinical trial results upload for consumer usage