Introduction to Central Consumer Protection Authority (CCPA)
Central Consumer Protection Authority: – The central government set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. It regulates matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.
The Department looks after the establishment and functioning of Central Consumer Protection Authority (CCPA) and National Consumer Disputes Redressal Commission (NCDRC), the apex consumer court. Also constitution of Central Consumer Protection Council is done by Consumer Protection Division.
The Consumer Protection Act, 1986 has been repealed after three decades and replaced by the Consumer Protection Act, 2019. The Consumer Protection Act, 2019 has been enacted with a view to broaden the scope of consumer rights and directly cover the area of e-commerce. Sales, tele-shopping and other multilevel marketing in the age of digitization. This act came into force on 20 July 2020. The objective of this act is to improve the disposal and administration process by imposing harsher penalties.
Who is a consumer under the Consumer Protection Bill, 2019?
Definition of Consumer: – A consumer is defined as a person who buys any good or avails a service for a consideration. It does not include a person who obtains a good for resale or a good or service for commercial purpose. It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.
As per Section 2(7) of the Consumer Protection Bill, 2019, a consumer is any person who purchases goods or avails of any service and includes any user other than a person who has purchased such services or goods for the purpose of resale or commercial use.
The clarification of the definition specifically states that the expressions “anyone who buys goods” and “rents or receives any services” include electronic means or through direct selling or teleshopping or multi-level marketing includes all online transactions. Online transactions are a special feature of the Act and have been added keeping in view the growing e-commerce business and advancements in technology.
What is an Unfair Trade Practice under the 2019 Act?
Meaning of Unfair Trade Practice: – Unfair Trade Practice under Consumer Protection Act 2019 means the use of various deceptive, fraudulent, or unethical methods to obtain business. Unfair business practices include misrepresentation, false advertising or representation of a good or service, tied selling, false free prize or gift offers, deceptive pricing, and noncompliance with manufacturing standards. Such acts are considered unlawful by statute through the Consumer Protection Law, which opens up recourse for consumers by way of compensatory or punitive damages. An unfair trade practice is sometimes referred to as “deceptive trade practices” or “unfair business practices.”
Section 2(47) of the Consumer Protection Act, 2019 defines ‘unfair trade practice’. The definition of ‘unfair trade practice’ has been broadened to include the following practices: –
- Manufacture or offer counterfeit goods for sale or adopt deceptive practices to provide service,
- Not issuing proper cash memos or bills for services rendered and goods sold,
- Refusal to take back, withdraw or discontinue defective goods and services and to return the consideration considered within the time period specified in the bill or if there is no such provision in the bill,
- Disclosure of consumer personal information to any other person which is not in accordance with the prevailing laws.
Establishment of Central Consumer Protection Authority
Under the 2019 Act, Central Consumer Protection Authority (CCPA) was set up to regulate matters relating to violation of consumer rights, misleading or false advertisements, unfair trade practices and enforcement of consumer rights. The Central Government will appoint the members of the CCPA. The Authority shall consist of a Chief Commissioner along with such other prescribed members.
The 2019 Act specifies the functions of the Central Consumer Protection Authority (CCPA) and who will appoint its members. However, there is ambiguity about how the CCPA will perform its functions and the methods it will adopt to achieve its functions. There is also no qualification specification for the recruitment of members of the Central Consumer Protection Authority (CCPA). In addition, the appointment of members of the Central Consumer Protection Authority (CCPA) by the central government would affect the independence of the authority. The consumer may suffer in a dispute where the government has provided less services.
The authority is being constituted under section 10(1) of the Consumer Protection Act, 2019. The Act replaced the Consumer Protection Act, 1986 and attempted to widen its scope to address consumer concerns. The new Act recognizes offenses such as giving false information about the quality or quantity of any goods or services and giving misleading advertisements. It also specifies that action will be taken if goods and services are found to be “dangerous or unsafe”.
What can be the possible structure of Central Consumer Protection Authority (CCPA)?
Sources said the proposed authority would be a lean body with a chief commissioner, and only two other commissioners as members – one of whom would deal with matters related to goods while the other would deal with matters related to services. It will be headquartered in the National Capital Territory of Delhi but the central government can set up regional offices in other parts of the country.
The Central Consumer Protection Authority (CCPA)will have an investigation wing headed by a Director General. District collectors will also have the power to investigate complaints of violation of consumer rights, unfair trade practices and false or misleading advertisements.
What kind of goods and food items in particular can be classified as dangerous, hazardous or unsafe?
This is not specified in the notification of the Act. With regard to food, an official said that the Central Consumer Protection Authority (CCPA) will ensure that all standards on packaged food items as prescribed by regulators such as the Food Safety and Standards Authority of India (FSSAI) are being followed.
Hazardous substances are classified on the basis of their potential health effects, whether acute (immediate) or chronic (long-term). Dangerous goods are classified on the basis of immediate physical or chemical effects, such as fire, explosion, corrosion and poisoning.
Dangerous Goods are substances that are corrosive, flammable, explosive, spontaneously combustible, toxic, and oxidising or water reactive. These goods can be deadly and can seriously damage property and the environment. Therefore, it’s important that they are stored and handled safely.
What will the Central Consumer Protection Authority (CCPA) do if any goods or services are found not meeting these standards?
Under Section 20 of the Consumer Protection Act, the proposed authority shall have powers to recall goods or services which are “dangerous or unsafe; to refund the prices of the recalled goods or services to the buyers of such goods or services” and to stop practices which are unfair and prejudicial to the interest of the consumer”.
The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement. In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years. CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years. However, there are certain exceptions when an endorser will not be held liable for such a penalty.
The penalties for manufacturing, selling, storing, distributing or importing adulterated products are: –
- Fine up to one lakh rupees and imprisonment up to six months, if the consumer is not hurt;
- Injury will result in fine up to Rs 3 lakh and imprisonment up to one year;
- If grievous hurt, fine up to Rs 5 lakh and imprisonment up to 7 years; and
- Fine of Rs 10 lakh or more in case of death, imprisonment for a minimum of 7 years, extendable to imprisonment for life.
How will it deal with false or misleading advertisements?
Section 21 of the Act defines the powers given to the Central Consumer Protection Authority (CCPA) to crack down on false or misleading advertisements. In accordance with these provisions, if the CCPA is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer, or is in breach of consumer rights, the Central Consumer Protection Authority (CCPA) may issue directions to the merchant, manufacturer, endorser.
The Authority may also impose a fine of up to Rs 10 lakh, with imprisonment of either description for a term which may extend to two years, on the producer or endorser of false and misleading advertisements. For each subsequent offense committed by the same producer or endorser, the fine may extend to Rs 50 lakh, with imprisonment of either description for a term which may extend to five years.
The Central Consumer Protection Authority (CCPA) may prohibit the endorser of a false or misleading advertisement from endorsing any future products or services for a period of up to one year. For every subsequent violation of the Act, the ban can be extended up to three years.
What other powers will the Central Consumer Protection Authority (CCPA) have?
Consumer Disputes Redressal Commission: – Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels. A consumer can file a complaint with CDRCs in relation to: (i) unfair or restrictive trade practices; (ii) defective goods or services; (iii) overcharging or deceptive charging; and (iv) the offering of goods or services for sale which may be hazardous to life and safety. Complaints against an unfair contract can be filed with only the State and National Appeals from a District CDRC will be heard by the State CDRC. Appeals from the State CDRC will be heard by the National CDRC. Final appeal will lie before the Supreme Court.
While conducting investigation after preliminary inquiry, the officers of the Investigation Wing of the Central Consumer Protection Authority (CCPA) shall have the power to enter any premises and to search and seize any document or object. For search and seizure, the Central Consumer Protection Authority (CCPA) shall have the same powers as conferred under the provisions of the Code of Criminal Procedure, 1973.
The Central Consumer Protection Authority (CCPA) can file complaints of consumer rights violations or unfair trade practices before the District Consumer Disputes Redressal Commission, the State Consumer Disputes Redressal Commission and the National Consumer Disputes Redressal Commission. It will issue safety notices to alert consumers about dangerous or dangerous or unsafe goods or services.