Roots of Consumerism – Consumer Safety and Information – Environmental Concerns – Consumer Privacy – Consumer Protection Act 1986; Central and State Consumer Protection Councils, Consumer Disputes Redressal Agencies and Forum, National Consumer Disputes Redressal Commission

1. P. VENKATA SUBBAIAH AITS,R
CONSUMERISM AND THE CONSUMER PROTECTION ACT
(1986)
Roots of Consumerism – Consumer Safety and Information –
Environmental Concerns – Consumer Privacy – Consumer Protection Act
1986; Central and State Consumer Protection Councils, Consumer
Disputes Redressal Agencies and Forum, National Consumer Disputes
Redressal Commission

2. Consumer Behaviour
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CONSUMERISM AND THE CONSUMER PROTECTION ACT (1986)
Roots of Consumerism – Consumer Safety and Information – Environmental Concerns – Consumer
Privacy – Consumer Protection Act 1986; Central and State Consumer Protection Councils, Consumer
Disputes Redressal Agencies and Forum, National Consumer Disputes Redressal Commission.
Consumer awareness about their legitimate rights has been constantly growing in recent
years. Consumer protection movement is a part of global recognition and concern that
consumers are a weak party in buying goods and services as compared to the
manufacturers and traders producing and selling them. Ideally, a market economy
where firms compete to sell goods and services to the consumers should serve the
interests of consumers better but more often than not the consumers are exploited by
the adoption of unfair and restrictive trade practices. Far from being a sovereign the
consumer is a child who is too weak to resist or challenge the suppliers of goods and
services. Therefore, even in a free market economy he needs protection of his rights by
a legal authority. Consumer protection is necessary even in a controlled economy where
public enterprises play a dominant role since consumers are likely to be denied their
rights in their case too.
Most consumers buy goods and services after being lured by advertisements
exaggerating the contents and quality of their products or services. Legal support to
them is required if they are to be protected from the exploitation and deception by the
suppliers so that erring vendors are brought to book.
It is this increasing realization of the helplessness of the consumers and to ensure
their legitimate rights that led to the resolution of the United Nations General Assembly
in 1985 recommending to the member states for adopting preventive, protective and
curative measures for the benefit of consumers.
Consumerism:
Social movement to protect the consumers from unfair and unhealthy restrictive trade
practices by the manufacturers and suppliers is also called consumerism. An eminent
management expert states, “Consumerism is a social movement seeking to augment the
rights and powers of consumers”. Similarly, Boyd and Allen state, “Consumerism may
be defined as the dedication of those activities of both public and private organisations
which are designed to protect individuals from practices that impinge upon their rights
as consumers”.

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Consumer Rights:
Consumers in the developed countries such as the USA and UK are much more
conscious of their rights. But in countries such as India consumers are quite a vulnerable
lot due to their poverty, illiteracy and lack of awareness of legal rights. As a result,
manufacturers and suppliers of goods and services generally exploit the consumers by
adopting unfair and restrictive trade practices.
However, consumer awareness is constantly increasing in India too and the consumers
who have been deceived or exploited are increasingly approaching the consumer forums
or councils set up by the government for redressal of their complaints and settlement of
their claims for damages.
The following are the important consumer rights:
1. The Right to be heard:
The consumer has the right to be heard if he has any complaint or grievance regarding
the good or service received. This implies that consumers’ complaints and grievances
must receive due attention and consideration at an appropriate forum.
2. The Right to safety:
The consumers are entitled to protection of their health and safety from the goods and
services they buy. They should not be supplied goods or services which are hazardous
to their health and safety.
3. The Right against exploitation:
This covers right to protection from unfair trade practices and unscrupulous exploitation
of consumers by charging excessive prices by suppliers of goods or services.
4. The Right to be informed:
This implies that consumers should be given correct and full information about the
quality of goods that they buy. They should be provided information about the
ingredients of the product, freshness of the product, any side effects that may occur as
a result of consumption of a commodity. This right applies especially to the drug
manufacturers and suppliers.

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5. The Right to choose:
This implies that consumers should be provided a variety of products from which they
can make a choice of their liking. The opportunity to choose from limited options
restricts their right to choose.
6. The Right to get redress:
This implies that consumers’ complaints and grievances about the products and services
supplied to them must be redressed. That is, they should not only be heard but their
complaints must be redressed and compensated adequately.
In India, the Consumer Protection Act 1986 was passed which was later amended in
2002, wherein most of the consumer rights have been provided and mechanism for
redressal of their complaints have been put in place.
Consumer Rights Vs Responsibilities
Sl.
No
Rights Responsibility
1 Right to be
heard
1. Ensure that the company has provided you the contact details of
the consumer grievance handling system and are easily accessible.
2. Avoid purchase of products/services from a company which do
not provide
details of the consumer grievance officers to handle consumer
grievances

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2 Right to
Redress
1. Ignoring the loss suffered on purchase of defective goods and
services and not filing complaint encourages the corrupt business
man to supply low standards or defective goods and services.
Therefor file a complaint even for a small loss. File only a genuine
complaint.
2. Consumer must file a complaint if not satisfied with the quality
of product/services.
3. Claim the penalties/compensation as provided under rules and
regulations to ensure that the quality delivery system improves.
4. Study carefully all terms and conditions related to
return/replacement of defective goods, refund and warranty
policies.
3 Right to Safety
1. While purchasing the goods or services, Consumer must look for
standard quality mark such as ISI, Hallmark, Agmark, ISO, FSSAI
, etc.
2. Do not buy any spurious/ fake/duplicate/ hazardous products
4
Right to
Consumer
Education/
Right to be
Informed
1. Do not get carried away by advertisements only or believe on the
words of the seller. Consumer must look market reviews/feedback.
Similarly inform offers if product and services of companies are of
substandard.
2. Consumer must insist on getting complete information on the
quality, quantity, utility, price etc. of the product or services.
3. Ask for complete contact details of the consumer grievance
mechanism of the company the consumer wish to buy from
5
Right to
Choose
1. Access the information available on various alternatives available
for the product and services under purchase consideration.
2. Compare specifications, competition and fair prices of the goods
and services before finalizing on the purchase
3. Study various feedbacks/reviews of the products/services
Consumer Protection Act
The Consumer Protection Act, 1986 which came into force on 15th April,1987 is a
welfare legislation mainly titling towards the consumer just as the Industrial Disputes
Act is loaded in favor of workers. The aims and objects of the Act, as given in its
Preamble, better protection of the interests of the consumer and for settlement of

6. Consumer Behaviour
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consumer disputes. It provides for speedy and inexpensive settlement of disputes within
a limited time frame, as against civil actions which are costly and take years in coming
to a settlement. Provisions of the Act are in addition to and not in derogation of any
other law for the time being in force and are compensatory in nature.
The Act envisages a three-tier quasi-judicial machinery, i.e., District Consumer
Disputes Redressal Forum at the district level State Consumer Disputes Redressal
Commission of the state level and National Consumer Disputes Redressal Commission
at the National level.
Recently, the Act has been amended by the Consumer Protection (Amendment) Act,
1993, w.e.f. 18.6.1993. We shall deal selectively with provisions of the Act which are
relevant to the Medical Profession, as they exist as on today. The meaning of legal terms
is being restricted to such terms only as concern the Medical Profession.
Definitions
Complainant means -
(i) a consumer; or
(ii) any voluntary consumer association registered under the Companies Act, 1956 or
under any other law for the time being in force; or
(iii) the Central Government or any State Government;
(iv) one or more consumers, where there are numerous consumers having the same
interests; who or which makes a complaint.
Consumer Protection Act has been implemented (1986) or we can bring into existence to
protect the rights of a consumer. It protects the consumer from exploitation
that business practice to make profits which in turn harm the wellbeing of the consumer
and society.

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This right help to educate the consumer on the right and responsibilities of being a
consumer and how to seek help or justice when faced exploitation as a consumer. It
teaches the consumer to make right choices and know what is right and what is wrong.
Who is a consumer according to the Consumer Protection Act, 1986? A consumer is one
that buys good for consumption and not for the resale or commercial purpose. The
consumer also hires service for consideration.
Practices to be followed by Business under Consumer Protection Act
 If any defect found the seller should remove the mentioned defects from the whole
batch or the goods affected. For example, there have been cases where car
manufacturing unit found a defect in parts of the vehicle usually they remove the
defect from every unit or they call of the unit.
 They should replace the defective product with a noneffective product and that
product should be of similar configuration or should be the same as
the product purchased.
Consumer Disputes Redressal Agencies
Redressal Forums have been established at three different levels:-
- "District Forum" by State Government. At least one in each district or
in certain cases one District Forum may cover 2 or more districts.
- "State Commission" by State Government.
- "National Commission" (National Consumer Disputes Redressal
Commission) by Central Government.
District Forum
This shall consist of:
1. a person who is, or has been, or is qualified to be a District Judge, its President
2. two other members shall be persons of ability, integrity and standing and have

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adequate knowledge or experience or have shown capacity, in dealing with problems
relating to economics, law, commerce, accountancy, industry, public affairs or
administration, one of whom shall be a woman.
Jurisdiction of the District Forum
The District Forum shall have jurisdiction to entertain complaints where the value of
services and compensation claimed does not exceed Rupees Five Lakhs. Manner in
which complaint shall be made
A complaint may be filed with a District Forum by -
1. the consumer to whom such service is provided or is agreed to be provided;
2. any recognized consumer association, whether the consumer to whom the
service is provided or is agreed to be provided is a member of such association
or not ;
3. one or more consumers, where there are numerous consumers having the same
interest, with the permission of the district forum, on behalf of or for the benefit
of all consumers so interested;
4. The Central or the State Government.
Procedure on receipt of Complaint
The District Forum shall on receipt of a complaint -
1. Refer a copy of such complaint to the opposite party directing him to give his version
of the case within a period of 30 days or such extended period not exceeding 15 days
as may be granted by the District Forum;
2. Where the opposite party, on receipt of a copy of the complaint, denies or disputes
the allegations contained in the complaint, or omits or fails to take any action to
represent his case within the time given by the District Forum, the District Forum shall
proceed to settle the consumer dispute,
(i) On the basis of evidence brought to his notice by the complainant and the opposite
party, where the opposite denies or disputes the allegations contained in the complaint;
or
(ii) On the basis of evidence brought to its notice by the complainant where the opposite
party omits or fails to take any action to represent his case within the time given by the
Forum;

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(iii) Where the complainant or his authorized agent fails to appear before the District
Forum on such day, the District Forum may in its discretion either dismiss the complaint
in default or if a substantial portion of the evidence of the complainant has already been
recorded, decide it on merits. Where the opposite party or its authorized agent fails to
appear on the day of hearing, the District Forum may decide the complaint ex-parte.
(iv) Where any party to a complaint to whom time has been granted fails to produce his
evidence or to cause the attendance of his witnesses or to perform any other act
necessary to the further progress of the complaint, for which time has been allowed, the
District Forum may notwithstanding such default: -
(a) If the parties are present, proceed to decide the complaint forthwith; or
(b) if the parties or any of them is absent, proceed as mentioned above in (b) (iii) ;
(v) The District Forum may, on such terms as it may think fit at any stage, adjourn the
hearing of the complaint but not more than one adjournment shall ordinarily be given
and the complaint should be decided within 90 days from the date of notice received by
the opposite party where complaint does not require analysis or testing of the goods and
within 150 days if it requires analysis or testing of the goods.
Findings of the District Forum
If, after the proceedings, the District Forum is satisfied that any of the allegations
contained in the complaint about the services are proved, it shall issue an order to the
opposite party directing him to do one or more of the following things:
1. To return to the complainant the charges paid.
2. Pay such amount as may be awarded by it as compensation to the consumer
for any loss or injury suffered by the consumer due to the negligence of the
opposite party.
3. To remove the deficiency in the services in question.
4. To provide for adequate costs to parties.
Appeal against orders of the Dist. Forum
Any person aggrieved by an order made by the District Forum may appeal against such
order to the State Commission within a period of 30 days from the date of the order.
The State Commission may entertain an appeal after 30 days if it is satisfied that there
was sufficient cause for not filing it within that period.
State Commission
It shall consist of -

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1. a person who is or has been a Judge of a High Court, who shall be its President;
2. two other members (as for District Forum).
Jurisdiction of the State Commission
The State Commission has jurisdiction to entertain -
1. Complaints where the value of services and compensation claimed exceeds
rupees 5 lakhs but does not exceed rupees 20 lakhs;
2. appeals against the orders of any District Forum within the state ;
3. revision petitions against the District Forum.
Procedure to be followed by State Commission
Same as for District Forum.
Procedure for hearing appeals
The State Commission may, on such terms as it may think fit and at any stage, adjourn
the hearing of appeal, but not more than one adjournment shall ordinarily be given and
the appeal should be decided within 90 days from the first date of hearing.
Appeals against orders of State Commission
Any person aggrieved by an order made by the State Commission may appeal against
such order to the National Commission within a period of 30 days. The National
Commission may entertain an appeal after 30 days if it is satisfied that there was
sufficient cause for not filing it within that period
National Commission
This shall consist of -
1. a person who is or has been a Judge of the Supreme Court, who shall be its President.
(No appointment under this clause shall be made except after consultation with the
Chief Justice of India).
2. 4 other members (qualifications: As for District Forum /State Commission ).
Jurisdiction of the National Commission
The National Commission shall have jurisdiction -
(a) to entertain
(i) complaints where the value of services and compensation claimed exceeds rupees
20 lakhs ; and
(ii) appeals against the orders of any State Commission.
(b) to entertain revision petition against the State Commission.

11. Consumer Behaviour
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Procedure to be followed by the National Commission
A complaint containing the following particulars shall be presented by the complainant
in person or by his agent to the National Commission or be sent by registered post,
addressed to the National Commission :-
1. The name, description and the address of the complainant;
2. The name, description and address of the opposite party or parties, as the case
may be, so far as they can be ascertained;
3. The facts relating to the complaint and when and where it arose;
4. Documents in support of the allegations contained in the complaint;
5. The relief which the complainant claims.
The remaining procedure and the procedure for hearing the appeal is similar to
that for state commission.
Appeal against orders of the National Commission
Any person, aggrieved by an order made by the National Commission, may appeal
against such order to the Supreme Court within a period of 30 days from the date of the
order. The Supreme Court may entertain an appeal after 30 days if it is satisfied that
there was sufficient cause for not filing it within that period.
Limitation Period
The District Forum, the State Commission or the National Commission shall not admit
a complaint unless it is filed within 2 years from the date on which the cause of action
has arisen. In case there are sufficient grounds for not filing the complaint within such
period, extension may be granted.
Dismissal of frivolous or vexatious complaints
Where a complaint instituted before the District Forum, the State Commission or the
National Commission, as the case may be, is found to be frivolous or vexatious, it shall,
for reasons to be recorded in writing, dismiss the complaint and make an order that the
complainant shall pay to the opposite party such cost, not exceeding 10,000 rupees, as
may be specified in the order.
Penalties
Where a person against whom a complaint is made or the complainant fails or omits to
comply with any order made by the District Forum, the State Commission or the
National Commission, as the case may be, such person or complainant shall be
punishable with imprisonment for a term which shall not be less than one month but
which may extend to three years, or with fine which shall not be less than 2,000 rupees

12. Consumer Behaviour
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but which may extend to 10,000 rupees or with both. In exceptional circumstances the
penalties may be reduced further.
Consumer Protection Councils
The Act provides for the establishment of -
(1) The Central Consumer Protection Council (The Central Council).
(2) The State Consumer Protection Council (The State Council).
Objectives of the Council shall be: To promote and protect the rights of the consumers
such as ,
1. The right to be protected against the marketing of services which are hazardous
to life and property;
2. The right to be informed about the quality, quantity, potency, purity, standard
and price of services so as to protect the consumer against unfair trade practices;
3. The right to be assured, whenever possible, access to a variety of services at
competitive prices
4. The right to be heard and to be assured that consumer’s interests will receive
due consideration at appropriate forums;
5. The right to seek redressal against unfair trade practices or restrictive trade
practices or unscrupulous exploitation of consumers; and
6. The right to consumer education.
The Central Council shall consist of 150 members. The Minister In Charge of the
Consumer Affairs in the Central Government shall be its Chairman. The State Council
shall be chaired by Minister In charge of Consumer Affairs in the State Government.
The resolution passed by these Councils shall be recommendatory in nature.
CONSUMER PROTECTION COUNCILS
The Central Consumer Protection Council. —(1) The Central Government shall, by
notification, establish with effect from such date as it may specify in such
notification, a Council to be known as the Central Consumer Protection Council
(hereinafter referred to as the Central Council).
(2) The Central Council shall consist of the following members, namely:—

13. Consumer Behaviour
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(a) the Minister in charge of the consumer affairs in the Central
Government, who shall be its Chairman, and
(b) such number of other official or non-official members representing such
interests as may be prescribed.
Procedure for meetings of the Central Council. —(1) The Central Council shall
meet as and when necessary, but at least one meeting of the Council shall be held
every year.
(2) The Central Council shall meet at such time and place as the Chairman may
think fit and shall observe such procedure in regard to the transaction of its
business as may be prescribed.
Objects of the Central Council. —The objects of the Central Council shall be to
promote and protect the rights of the consumers such as,—
(a) the right to be protected against the marketing of goods and services which
are hazardous to life and property;
(b) the right to be informed about the quality, quantity, potency, purity,
standard and price of goods or services, as the case may be so as to protect
the consumer against unfair trade practices;
(c) the right to be assured, wherever possible, access to a variety of goods and
services at competitive prices;
(d) the right to be heard and to be assured that consumer's interests will receive
due consideration at appropriate forums;
(e) the right to seek redressal against unfair trade practices or restrictive trade
practices or unscrupulous exploitation of consumers; and
(f) the right to consumer education.
The State Consumer Protection Councils.-
(1) The State Government shall, by notification, establish with effect from such
date as it may specify in such notification, a Council to be known as the
Consumer Protection Council for..................... (hereinafter referred to as the
State Council).
(2) The State Council shall consist of the following members, namely:—
(a) the Minister incharge of consumer affairs in the State Government who
shall be its Chairman;

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(b) such number of other official or non-official members representing such
interests as may be prescribed by the State Government.
(c) such number of other official or non-official members, not exceeding
ten, as may be nominated by the Central Government.
(3) The State Council shall meet as and when necessary but not less than two
meetings shall be held every year.
(4) The State Council shall meet at such time and place as the Chairman may
think fit and shall observe such procedure in regard to the transaction of its
business as may be prescribed by the State Government.
Objects of the State Council. — The objects of every State Council shall be to promote
and protect within the State the rights of the consumers laid down in clauses (a)
to (f) of section 6.
(1) The State Government shall establish for every district, by notification, a
council to be known as the District Consumer Protection Council with effect
from such date as it may specify in such notification.
(2) The District Consumer Protection Council (hereinafter referred to as the
District Council) shall consist of the following members, namely:—
(a) the Collector of the district (by whatever name called), who shall be its
Chairman; and
(b) such number of other official and non-official members representing
such interests as may be prescribed by the State Government.
(3) The District Council shall meet as and when necessary but not less than two
meetings shall be held every year.
(4) The District Council shall meet at such time and place within the district as
the Chairman may think fit and shall observe such procedure in regard to the
transaction of its business as may be prescribed by the State Government.
The objects of every District Council shall be to promote and protect within the
district the rights of the consumers laid down in clauses (a) to (f) of section 6.
Consumer privacy (customer privacy)

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Privacy is one of the most complex legal issues facing e-commerce ventures today.
Many sites, such as the one in our case study, have little interest in actively profiling
their users or discovering personal information about them. However, these sites will
often collect significant amounts of personally identifiable data that may trigger liability
risks.
Some of this data is actively supplied by users. For example, the WGU site collects
names, physical and email addresses, and credit card information through forms. Users
may also voluntarily supply personal information in their threaded discussion messages,
which are archived on the site. On the other hand, some of this data is passively
collected. The host server records routine information about each visit. Some of the
site's banner ads allow third-party advertisers to track users' browsing habits.
Our task in this section is to assess the liability risk of a site's information collection
practices. We can break this task down into four main steps. First, we must determine
what information is collected by the site. Second, we must evaluate the potential
liability for those information collection practices. Third, we must choose whether to
develop a privacy policy to disclose those practices. And, fourth, we must verify our
compliance with statutes or regulations.
Consumer privacy, also known as customer privacy, involves the handling and
protection of sensitive personal information that individuals provide in the course of
everyday transactions. As the internet has evolved into a medium of commerce,
consumer data privacy is a growing concern.
DESIGNING A PRIVACY POLICY
Privacy Audit
The first step is to conduct a privacy audit to decide what information will be collected,
how it will be used, and whether it will be shared with outside parties.
General information about privacy policies
 Privacy policies should be drafted in plain and direct English. If the site targets
consumers in non-English-speaking nations, translations should be available.

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 Privacy policies should be customized. Sensitive or personally identifiable
information may require a higher degree of protection than aggregate or non-
personally identifiable information.
Elements of a privacy policy
1. Notice
o What data is being collected? How? Are cookies or web bugs used?
o What is the primary use of the data? What are other secondary uses?
o What third parties will have access to the information?
o What security measures are in place to ensure the confidentiality and
accuracy of information?
o Are goods and services offered on the website made available to users
only if they provide personal information?
o Will the site owner disclose users' personal information if it believes in
good faith that the law requires it?
If third-party advertisers collect data on consumers through ads placed on the site, this
practice should be disclosed and consumers should be informed that the site itself does
not retain such information. Similarly, if data collection is outsourced to another
company or a third-party, this practice should be disclosed even if the data is intended
for internal use only.
2. Choice: opt in or opt out?
Most companies have adopted the opt-out approach, which allows consumers to choose
not to allow their data to be shared with third parties or used for marketing purposes.
Under opt-out, the default choice is to allow use of personal data. Under opt-in, the
default is to restrict use of personal data.
Companies are free to choose between allowing customers to opt out or opt in.
Regulation requiring opt in rather than opt out has been struck down by courts as
violating the First Amendment's requirement of narrow tailoring. In U.S. West v.
Federal Communications Commission, the court struck down FCC rules requiring
phone companies to obtain affirmative opt-in permission to share customer calling
patterns with third parties (U.S. West, 1999).

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3. Access and accuracy
Companies must decide whether they will allow users to access their data, correct
inaccuracies, or remove information they do not wish disclosed. Companies benefit
from accurate customer information, and user access can improve customer service by
ensuring that goods are properly shipped or customers receive information that most
accurately matches their interests. However, the consumer access to data may require
additional expenses, computing resources, and personnel. Online access may not
always be feasible, particularly for companies that store more sensitive data such as
medical information. In such cases, written mail might be more appropriate.
4. Data security and integrity
 Are technical and physical safeguards in place to prevent unauthorized access,
especially for sensitive or personally identifiable information?
 Are sufficiently robust encryption techniques used when confidential
information is stored in a file or travels across a network?
 Are employees and managers trained appropriately?
 Is data obtained from trusted sources? Is data up-to-date?
 Where appropriate, are there measures to ensure that data is stripped of
personally identifying information?
Be careful about explicit or implicit guarantees of security. Breaches can create legal
claims based on contract or tort.
5. Redress and enforcement
 If consumers feel that their privacy has been violated, how should they contact
the company? What steps will the company take to resolve those issues?
 What measures are in place to ensure compliance with the policy?
 Is there an accessible and responsive dispute resolution process?
 Are there ongoing assessment procedures? Are the results publicly disclosed?
Internal audits may be appropriate for companies that only collect aggregate or non-
personally identifiable information, whereas third-party monitoring may be appropriate
for companies that collect more sensitive information.
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