Consumer Protection Class 12 Notes Business Studies Chapter 12 - CBSE

Chapter: 12

What Are Consumer Protection ?

A consumer is said to be a king in a free market economy. The earlier approach of caveat emptor (“Let the buyer beware”), has now been changed to caveat venditor (“Let the seller beware”). Consumer Protection has a wide agenda as it educate consumers about their rights and responsibilities and helps them in getting their grievances redressed.

The importance of consumer protection from the consumers’ point of view

  • Consumer Ignorance
  • Unorganized Consumers
  • Widespread Exploitation of Consumers

The importance of consumer protection from the business point of view

  • Long-term Interest of Business
  • Business uses Society’s Resources
  • Social Responsibility
  • Moral Justification
  • Government Intervention
  • The Consumer Protection Act, 1986
  • The Indian Contract Act, 1872
  • The Sale of Goods Act, 1930
  • The Essential Commodities Act, 1955
  • The Agricultural Produce (Grading and Marking) Act, 1937
  • The Prevention of Food Adulteration Act, 1954
  • The Standards of Weights and Measures Act, 1976
  • The Trade Marks Act, 1999
  • The Competition Act, 2002
  • The Bureau of Indian Standards Act, 1986

Consumer Protection Act (Cpa)

The Consumer Protection Act (CPA) seeks to protect and promote the consumers’ interest through speedy and inexpensive redressal of their grievances. The scope of the Act is very wide and it is applicable to all types of undertakings, big and small, whether in the private or public sector, or in the co-operative sector,
whether a manufacturer or a trader, and whether supplying goods or providing services. The Consumer Protection Act provides for six rights of consumers which empowers them to fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers. The rights are:

  • Right to Safety
  • Right to be informed
  • Right to Choose
  • Right to be heard
  • Right to seek Redressal
  • Right to Consumer Education

Consumer Responsibilities

A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services.

  • Be aware about various goods and services available in the market.
  • Buy only standardised goods as they provide quality assurance.
  • Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely.
  • Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates,  etc.
  • Assert yourself to ensure that you get a fair deal.
  • Be honest in your dealings. Choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding etc.
  • Ask for a cash memo on purchase of goods or services.
  • File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services availed.
  • Form consumer societies which would play an active part in educating consumers and safeguarding their interests.
  • Respect the environment.
  • Ways and Means of consumer protection.
  • Redressal agencies under the Consumer Protection Act.
  • Role of Consumer Organisations and NGO’s.
Ways and Means of Consumer Protection ➔ Who can file a complaint?
  • Self-Regulation by Business
  • Any consumer
  • Business Associations
  • Any registered consumers’ association
  • Consumer Awareness
  • The Central Government or any State Government
  • Consumer Organizations
  • One or more consumers, on behalf of numerous consumers having the same interest
  • Government
  • A legal heir or representative of a deceased consumer

Redressal Agencies

The Consumer Protection Act, redressal machinery for redressing consumer’s grievances.

Three-tier Agencies of Redressal Machinery

  • District Forum
  • State Commission
  • National Commission

The District Forum (established by State Concerned) :

  • It is made up of a President and two members, one of whom must be a woman, who are officially nominated by the state government.
  • The value of consumer complaints should not exceed ₹1 crore.
  • If any of the party is not satisfied with the district forum's decision, they have 45 days to file an appeal with the state forum from the date of order.

State Commission (established by the government)

  • Each commission has a president and at least two members appointed by the state government, one of whom should be a woman.
  • The total worth of the products or services, including the compensation sought, is greater than ₹1 Crore but less than ₹10 crore.
  • If any of the parties is not pleased with the judgement, they can file a complaint with the national commission within 30 days of the order being issued.

National Commission (Set up by a Central Government)

  • It is made up of a President and at least four members chosen by the central government, one of whom should be a woman.
  • All complaints relating to products and services with a compensation value above ₹1 crore can be filed with the national commission.
  • If any of the parties is not pleased with the decision taken, they can file a complaint with the Supreme Court of India within 30 days of the order being issued.

Role Of Consumer Organizations And Ngos

  • Educate the general public through training programmes, seminars and workshops about consumer rights.
  • Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available and other matters of interest.
  • Test of qualities of competing brands are carried out in accredited laboratories and their test results are published for the benefit of consumers.
  • Encouraging consumers to strongly protest and take an action against unscrupulous, exploitative and unfair trade practices of sellers.
  • Providing legal assistance to consumers through providing aid, legal advice etc. in seeking legal remedy.
  • Taking an initiative in filing cases in consumer courts in the interest of the general public, not for any individual.