Consumer Rights Act comes into force; expands definition of 'customer', includes fine for false advertisement

The Consumer Protection Act of 2019 comes into effect today, replacing the Consumer Protection Act of 1986.

One of the most significant changes has been the widening of the definition of the word “customer”. With the new Act, even those who purchase goods and services online, through telemarketing, teleshopping or other electronic means, would be protected. The previous act did not include e-commerce transactions.

The District Forum has been renamed the District Commission and will hear cases upto the value of Rs 1 crores, a sharp change from the earlier price of Rs 20 lakh. The State Commission can hear cases upto upto the value of Rs 10 crores and the National Consumer Disputes Redressal Commission (NCDRC) above Rs 10 crores.

The State Commission and NCDRC would have the power to void unfair contracts.

The two parties can solve disputes by agreeing to the terms of a mediator, these will be seen as an order of the court.

Under the Act, the consumer would be allowed to file a case wherever they reside. They do not necessarily need to have legal representation in the form of a lawyer. A fixed timeline would also be followed for mediation.

The act also aims to set up a body called the Central Consumer Protection Authority (CCPA) that would enforce the rights of consumers. It would intervene in the case of unfair trade practices and initiate a recall and return of substandard products.

A fine and jail time for misleading advertisers is also in the books and while there is no provision of incarceration for celebrities who act in misleading ads, they could be banned from advertising for doing so.

A penalty of Rs 10 lakh and imprisonment upto two years could be applicable to false advertisers.

The Act also roughly defines “unfair trade practices”, which includes sharing confidential information provided by the customer.

The product liability division would prevent service providers from delivering sub-standard devices.

To read the Consumer Protection Act, 2019 in the Gazette of India, click here.