Lok Sabha Passes Consumer Protection Bill 2018

New Delhi: The Consumer Protection Bill, 2018 was passed by Lok Sabha today which will completely replace the present Consumer Protection Act 1986. The Bill was introduced by the Union Minister for Consumer Affairs, Ram Vilas Paswan.

The present law does not have a regulator, so to establish a national level regulator-Central Consumer Protection Authority- and to deal with consumer complaints on a proactive measure, the Bill will help a lot.

The Bill has provisions for class actions, product liability, misleading advertisements, liability for celebrity endorsements etc. It also includes new age developments like e-commerce, direct selling, tele-marketing and many more.

Some of the Highlights of the Bill are:-

Central Consumer Protection Authority (CCPA)

CCPA, a national level regulator, will deal with the matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements, which are prejudicial to the interests of public and consumers, is introduced in Chapter III of the Bill.

Misleading Advertisements

Misleading advertisements are defined under clause 2(28) as

Advertisements, which–

  • falsely describes such product or service;
  • Gives false guarantee to, or is likely to mislead the consumers as to the nature, substance, quality or quantity of such product or service; or
  • Conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or
  • Deliberately conceals important information.

Misleading advertisements will lead to penalty upto Rs. 10 lakhs from the CCPA under clause 21. It will also attract imprisonment for a term which may extend to five years and with fine which may extend to fifty lak rupees as per clause 89.

Liability of celebrity endorsers

The Bill addresses the liability of endorsers.

“Endorsement”,is defined under Clause 2(18) to mean:-

  • any message, verbal statement, demonstration; or
  • depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or
  • depiction of the name or seal of any institution or organisation,which makes the consumer to believe that it reflects the opinion, finding or experience of the person making such endorsement.

The endorser can be levied with penalty up to rupees ten lakhs by the CCPA for false and misleading advertisements, under Clause 21.

However, the endorser will not be liable if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.

Product liability

The Bill incorporates a special chapter-Chapter VI- to deal with ‘product liability’.

As per Clause 2(34) “product liability” means the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto;

According to 2(22), “harm”, in relation to a product liability, includes— (i) damage to any property, other than the product itself;

(ii) personal injury, illness or death;

(iii) mental agony or emotional distress attendant to personal injury or illness or damage to property; or

(iv) any loss of consortium or services or other loss resulting from a harm referred above.

Offences

The Bill makes violation of consumer rights punishable offences and has Chapter VII dealing with them.

As stated above, misleading advertisements are made punishable.

The Bill also addresses the menace of adulteration, by making manufacture, sale, storage of products mixed with adulterants punishable offences.

Cognizance of offence can be taken by a court only on a complaint filed by CCPA.

The Bill also contains expanded definitions for “unfair trade practise” and “unfair contracts” under Clauses 2(47) and 2(46) respectively. The Central Government is empowered to make rules to regulate direct selling, multi-level marketing, e-commerce, tele-shopping etc.

The draft of the Bill could be downloaded from the link below: https://drive.google.com/file/d/1QulEsTXTB1fCeguS5sFzW8wUuD_o9h52/view

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