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Consumers to get more power! New bill mandates action against ecommerce frauds, unfair trade practices

The new bill, passed by the Lok Sabha on Tuesday, proposes to set up a Central Consumer Protection Authority (CCPA) to tackle e-commerce frauds, violation of consumer rights, unfair trade practices and misleading advertisements

twitter-logo BusinessToday.In        Last Updated: July 31, 2019  | 18:16 IST
Consumers to get more power! New bill mandates action against ecommerce frauds, unfair trade practices
The three-decade old Consumer Protection Act does not adequately cover the ecommerce sector

With the passage of the Consumer Protection Bill in the Lok Sabha on Tuesday, shoppers come a step closer to initiating class action lawsuits over grievances such as refund and return of products. Those indulging in etail therapy have the most the cheer since they are unable to physically check the product before making online purchases. The new bill, which would replace the Consumer Protection Act, 1986, aims to address consumer vulnerabilities to new forms of unfair trade and unethical business practices in the fast-changing new-age economy. The current three-decade old law does not adequately cover the ecommerce sector or even direct selling.

"Under the Bill, there is provision for central government to set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers and [it] will be empowered to investigate, recall [faulty/unsafe goods and services], refund and impose penalties," the Ministry of Consumer Affairs, Food & Public Distribution said in a statement on Tuesday.

In other words, if the bill is passed by the Rajya Sabha too, e-commerce frauds, violation of consumer rights, unfair trade practices and misleading advertisements will all be tackled by the CCPA. Significantly, it will have power to impose a penalty of up to Rs 10 lakh on a manufacturer or an endorser and imprisonment for up to two years for a false or misleading advertisement.

While speaking on the bill in Parliament, Consumer Affairs minister Ram Vilas Paswan said that the overall purpose of the bill is to ease the process of consumer grievance redressal and make it more timely. It proposes setting up the Consumer Disputes Redressal Commission and forums at the District, State and National levels for adjudicating complaints. It also also provides for "mediation" as an Alternate Dispute Resolution Mechanism.

The other highlights of the Consumer Protection Bill include a simplified dispute resolution process and a product liability provision to deter manufacturers and service providers. Everything from manufacturing and design defects to faulty services and inadequate instruction for correct usage will become grounds for product liability action if the Bill gets notified.

The Consumer Protection Bill was first introduced in the Lok Sabha in January 2018. Although it was passed by the Lower House in December, it got stuck in the Rajya Sabha and eventually lapsed when the Lok Sabha dissolved. Modi 2.0 is likely to see plans to fruition, and that means that ecommerce players in the country have to be vigilant against unfair trade practices and unethical business practices like never before.

With PTI inputs

Also read: Celebrities, manufacturers may be jailed, penalised for misleading advertisements

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