Consumer Protection (F)

BBA
By Dr. Vineet Walia Dr. Pradeep Tomar
CONSUMER PROTECTION
PAPER CODE: bba-6004 UNIT-I Concept and types of consumer, need for consumer protection; approaches to consumer protection; consumer buying motives; doctrines of caveat emptor and caveat venditor; concept of consumers sovereignty; basic consumer rights UNIT-II Measures for consumer protection in India; basic provisions of the Consumer Protection Act.(CPA)1986; organizational set up for consumer protection under CPA; procedure of filing a complaint; relief available UNIT-III MRTP Act and Competition Act Provisions relating to consumer protection; Role of voluntary consumer organizations; formation and registration of a voluntary consumer organization, business self-regulation, consumer awareness role of media and govt. UNIT-IV Recent developments in consumer protection movement; consumer information and knowledge as means of protection; sources of consumer information, ethical marketing as an instrument of consumer protection, Role of Advertising Standard Council of India in consumer protection

UNIT-I
Question-1 Define and Explain the concept of Consumers. What are the various types of consumers? Answer:
A consumer is a person or group of people that are the final users of products generated within a social system. A consumer may be a person or group, such as a household. The concept of a consumer may vary significantly by context. The consumer is the one who consumes the goods and services produced. As such, consumers play a vital role in the economic system of a nation because in the absence of the effective demand that emanates from them, the economy virtually collapses. A consumer is defined as a person who buys goods and services and makes use of public utilities as well as natural resources like air and water::~n its most basic sense it refers to those who use goods and services for the satisfaction of their personal wants thus excluding buyers who purchase for manufacturing purposes or for resale. According to the Consumer Protection Act, 1986, a "Consumer" means any person who buys goods or hires any service for a consideration which has been paid, or promised, or partly paid and partly promised, or under any system of deferred payment, and includes any user of such goods other than the person who buys such goods for consideration. It does a not include a person who obtains such goods for resale or for any commercial purpose Typically when business people and economists talk of consumers they are talking about person as consumer, an aggregated commodity item with little individuality other than that expressed in the buy or not-buy decision. However there is a trend in marketing to individualize the concept. Instead of generating broad demographic profiles and psychographic profiles of market segments, marketers have started to engage in personalized marketing, permission marketing, and mass customization. There is increasing backlash from the public over use of the label "consumer" rather than "customer", with many finding it offensive and derogatory Consumer is a person engaged in evaluating, acquiring and using goods and services to satisfy his needs and wants. Consumer is the key figure in market and around him all the activities are carried on. customer means who purchases the product from the marketer or from the retailer or from the wholesaler. here we dont bother about who uses the product. whereas consumer means who uses the product of course purchased by the customer or prospect .here we consider finally who is going to use the product we call them as consumer.

Characteristics of Consumer The main characteristics of the consumer can be stated as follows: 1. A consumer is one who consumes either goods or hires or avails 'of any services. 2. The word 'Consumer' is defined separately for the purpose of goods and services. 3. For the purpose of goods, a consumer means a person belonging to any of the following two categories: a) One who buys any goods for a consideration. b) One who uses such goods with the approval of the buyer. 4. For the purpose of services, a consumer means a person belonging to any one of the following: a) One who hires any service or services for a consideration. b) One who is beneficiary of such service. 5. A person who buys goods for commercial purposes is not a consumer. In other words, only a person who buys goods for private use or conception only is a consumer. Profile of Consumer Each one of use in a given social system is a consumer, irrespective of the age, gender, educational level and socio-economic status. The profile of a consumer depends to a large extent on the complexity of the social structure. By and large, consumers may be divided into the following categories: 1. Age (Children, Adolescent, Teen-agers, Young Adults and Senior Citizens.) 2. Gender (Male-Female) 3. Social- Cultural Status (literate-illiterate, employed-unemployed) 4. Social Background- (Rural-Urban, etc.) 5. Economic status-(Rich-Middle class- Lower Middle Class- Poor). In addition to the above categories, you should keep in mind the rich cultural diversity of India, which affects consumer profile. The Indian consumer community is very heterogeneous in composition, following different religions, speaking different languages and adhering closely to their varied traditions. This obviously has impact on the consumption patterns. Manufacturers and merchants keep this profile of Indian consumer in mind while formulating selling strategies. In the next couple of units you will be acquainted with these influences on consumer behaviour. An important aspect of the consumer profile is the image of Indian consumer. Here, you should note that the familiar image of the Indian consumers as a passive and gullible, more acted upon than active is changing. For a long time Indian consumer acting as an individual in the market place was powerless. Today, their importance and power has grown. It is estimated that over two thirds of the total spending of the economy comes from the consumer. As a result of the

growing consumer awareness and the persisting problems in the production and distribution of essential goods and services, the consumers are getting organised and exercising their power. It is significant to note that a new breed of consumer is emerging, one who is consciously becoming an ethical consumer, fulfilling histher duties not only as a consumer but also as a citizen. This is very much evident from the new concerns (depletion of the ozone layer, degradation of forests, child labour, pollution, the use of hazardous chemicals and pesticide, etc.) that have begun to shape consumer movements in India. You will be reading more about these in the remaining blocks of this course.

Types of Consumer
The consumer can be further divided in to two classes. 1. Personal Consumer Personal consumer is that consumer who purchases goods and services for his own personal consumption or uses. We can say that consumer is also called to be the ultimate or final person because when the marketer produces the goods then he hand over the goods to personal consumer for final consumption. For example: Rahul buys shaving cream for his personal use so he is said to be personal consumer. 2. Organizational Consumer or Corporate Consumer Organizational consumer or Corporate Consumer consists of the government agencies, business organization, nongovernmental organization (NGO), firms and different types of manufacturing companies who purchases the goods and services in order to run the business of the firm or business concern or business organization. For example: A manufacturing organization let suppose Anand woollen mills purchases raw materials in order to produce woollen cloths in winter season. The main purpose of the purchase and selling of Anand woollen mills just to operate the mill or business of the concern is getting profit or not.
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Characteristics of Consumer Buying Consumers present a striking contrast to purchasing agents of government or any private enterprise. The latter have only one job that of buying. A limited variety of goods is purchased because the unit of purchase is large and so it is worth while for such buyers to spend much time in searching for possible alternatives and in making elaborate surveys and tests in order to identify a suitable product. They may even specify the product which is desired and get it made to order. In addition, many of the products they buy are described in standard terms. Consumers on the other hand purchase small quantities of a variety of goods. Extensive shopping and testing are not feasible and only in the case of affluent consumers there is scope for having goods made to order. Buying is often crowded into 'spare moments' and is only one of the many tasks carried on. A multitude of different goods may be selected. Without training

and with little experience, consumers must match their wits against salesmen skilled in the art of selling, many of whom take the attitude "Let the buyers beware". Sellers are also specialists who may confuse the consumers and sway them by their appeals and make them irrational buyers. More about this will be taken up in the later units. Types of goods consumers buy include convenience goods, shopping goods and speciality goods. Convenience goods (like food products, soap, daily newspapers, confectionery, etc.) are usually purchased frequently and with minimum of effort in buying. Shopping goods (lie ready-made garments, furniture, shoes, etc.) are those which the consumers buy after considering such factors as suitability, quality, price and style in the process of selection. Speciality goods (like TV, Stereo, refrigerators, camera, etc.) have unique characteristics or brand identification for which most buyers are willing to make a special purchasing effort. Included in the types of services that consumers hire or avail of on payment are transportation, communication, banking, insurance, house building, medical treatment. education and training, electricity and water supply, etc. Consumers in India Theoretically, consumers all over the world are the same as far as their basic needs and desires are concerned. However, the forces operating on the Indian consumer are far different from those that operate on his Western counterparts. Apart from cultural factors, there are socioeconomic differences that distinguish India from the Western countries. As a developing country India is characterised by vast disparities in incomes, poverty, illiteracy, exploding population which have a bearing on the consumption pattern as well as on the consumer movement. Consumers in India are very heterogeneous in composition, both in terms of social and cultural aspects and economic status. India is the second largest country in the world, the population figure being over 845 million according to the 1431 census. Of these only 21% live in urban areas and 79% in rural areas. Of this about 40% live below poverty line. As a result India is faced with a terribly low standard of living and a galloping population growth.

Question -2. What are the general and specific problems faced by consumers worldwide? Answer: Problems Faced by Consumers
Consumers may be deceived in various ways by unscrupulous businessmen including traders, dealers, producers and manufacturers as well as service providers. Some of the following unfair practices must have come to your notice sometime or the other: 1. Adulteration It is, adding something inferior to the product being sold. This is a practice we come across in the case of cereals, spices, tea leaves, edible oil, petrol, etc. For example, mustard oil may be adulterated with rape seed oil or argemone oil, black pepper is known to be adulterated with dry papaya seeds, petrol is mixed with kerosene oil, vanaspati may be

mixed with pure ghee or butter. Sometimes, the inferior material used with the product may be injurious to health. 2. Sale of spurious products -It is, selling something of no value instead of the real product. This is often found in the case of medicines and drugs or health care products. Cases have Consumer Protection been reported where ampoules for injections contained only water or glucose water in bottles contained only distilled water. 3. Use of false weights and measures It is another malpractice which some traders adopt while selling the goods. Goods which are sold by weight (kg.) like vegetables, cereals, sugar, etc., those sold by measures (meter) like textile fabrics, suit pieces, are sometimes found to be less than the actual weight or length. False weights (Kg, 500 grams , 250 grams,etc) or measuring tapes or sticks having false markings are used for the purpose and buyers are cheated. Sometimes packaged goods and sealed containers (tins) contain less quantities, than what is stated on the label or packet. This cannot be easily verified. Sweets are often weighed along with the card board box which may weigh upto 50-100 grams. You pay for it at the same rate as the sweets. 4. Sale of duplicates -It is, goods that indicates a mark which shown it is of superior quality than what it actually is. For example, goods which are locally made, are sold at a higher price as imported items expected to be of superior quality. Certain products like washing soap, detergent powders, tube lights, jams, edible oil, even medicines, carry well known brand names although these are made by others. 5. Hoarding and black-marketing- It is another problem that consumer often face. When any essential commodity is not made available in the open market and stocks are intentionally held back by dealers it is known as hoarding. Its purpose is to create an artificial scarcity, to push up the prices. Black marketing is the practice of selling hoarded goods, secretly at a higher price. These practices are sometimes adopted when there is short supply of any product. You may have read in the newspapers sometime back about scarcity of onions in the open market in some states and high prices being charged by traders who had stocks. 6. Tie-in-Sales -Buyers of durable consumer goods are sometimes required to buy some other goods as a pre-condition to sale or may be required to pay after-sales service charges for one year in advance. You may have heard about tying up of new gas connections with the sale of gas stoves (burners). Also TV sets are sometimes sold on the condition that the buyers will make advance payment of a years service charge. 7. Offering gifts having no additional value or coupons- Offering gifts having no additional value or coupons to collect a gift on the next purchase of some product are practices aimed at

alluring consumers to buy a product. Often gifts are offered after the price of the product on sale has been increased. Dealers also announce contests or lottery among buyers of a product without the intention of awarding any prize. 8. Misleading advertisement - It is yet another practice by which consumers are deceived. Such advertisements falsely represent a product or service to be of superior quality, grade or standard, or falsely asserts the need for or usefulness of a product or service. A pharmaceutical company advertised that use of its paracetamol tablet did not have any side effects like aspirin, but it suppressed the experts report that the use of paracetamol had adverse effect on the liver. A company announced in its advertisement that it was manufacturing 150 cc. scooters in technical collaboration with a foreign company, although no such collaboration had been entered into. In another case, a company used the trademark Business Studies of a well-known company Philips in its advertisement for TV sets.. On enquiry it was found that the company did not have the necessary permission from Philips for the use of its trade mark on TV sets. It was a case of misrepresentation of facts although that company was authorised to use the trademark Philips on its audio products (radio sets) only. 9. Sale of sub-standard goods - Sale of goods which do not conform to prescribed quality standards particularly for safety. Such products include pressure cookers, stoves, electic gadgets (heaters, toasters, etc.), cooking gas cylinders.

Question 3. What is the concept of Consumerism? How the consumerism spread and what does is the effect of advertisement on consumerism? Answer:
Consumerism: As long as social and civilized modes of existence have been in operation, consumer has been in its centre. The early consumer behaviour was characterized by mutual trust which was reflected in the barter system. Societies in the past, depended upon mutual exchange of skills in the market place rather than value for money. Some amount of quality control was inherent in this system. As the market economies began to develop and spread, consumer behaviour also altered. Consumer began to be progressively distanced from the details of production process, the environment or the natural resources. As a result, s h e began to have less control over his or her life and became increasingly dependent on the market. Due to the consumer's initial dependence and trust in the veracity of the written words, the consumer began to accept printed information about consumer, goods as a mark of quality, leaving the door wide open for exploitation on that count. It also encouraged the market forces to make exaggerated claims, and to give false, fraudulent and misguiding information. The growth of this pattern of market conduct exploited and victimised the consumer in every

possible way in the name of selling him or her convenience, choice, availability and fulfilling him or her needs in the least complicated way. Packaging gained precedence over the product. Sales tactics became more important than quality, consumer psychology was analysed for the benefit of the producers and the sellers. Advertising was used not only as a means of promoting availability, but also, ironically for indulging in false claims and fraudulent trade practices. Advertising sold concepts, not products. For example bath soaps are sold not for their hygienic, cleansing or environmentfriendly qualities but as symbols of 'beauty' and status. All this reveals the progressive decline in consumer responsibility with the consumer's role becoming increasingly passive over the years. Spread of Consumerism Inherently, all societies are based on a give and take principle. However, modem societies have created an imbalance between the giver and the taker. The basic giver has been nature and its resources. Human societies singly mindedly and increasingly have taken more from nature than ever before. Consumer Protection Development, industrialisation, technological advancement have all used natural resources mercilessly. What has caused the imblance is that man has taken from nature without showing any sensitivity or regard towards its conservation or preservation. In short, man's relationship with nature has not been sustainable. The more a society has shown evidence of "advancement" the more it has exploited and manipulated nature. One way of determining the range and extent of consumption is the use of energy and natural resources. The deve!cped countries of the North have 25% of the world's population, but consume 75% of all energy, 79% of all commercial fuels, 85% of all wood products and 72% of all steel products. They also generate nearly three fourth's of all carbon dioxide emissions. At the present time, the world is perceived to be divided into two halves- Northern and Southern. This division is indicative of the Northern half which. for maintenance of its standard of living and quality of life, is dependent upon the southern half of the hemi- sphere. This is because it contains three-fourth's of the world's natural resources in forest cover, water, biodiversity, wild-life, minerals and oil resources. However, this dependence of the North has not ensured a good life for the inhabitants of the south. This has been for various sociological and historical reasons. At present it is beginning to be realised that the world needs more equitable distribution and use of its resources and new environmental and market strategies. Sustainable technologies also have to be evolved if all mankind is to enjoy the beneficence of nature. The consumers of the North. are now being pressured to act with responsibility and opt for sustainable consumption patterns, so that sustainability in production can be maintained by the south.

Consumerism surfaced in all its negative connotations in the North and then through the spread of market economy and globalisation of market forces, it has spread to all parts of the world. Underdeveloped and developing nations have been swamped by obsolete technologies and alien cultural inputs dislocating their traditional way of life. The reach of consumerism has been so invasive that it has dislocated large populations in rural and less industrialised parts of the world's areas and replaced environment friendly methodologies with consumer items. Use of Advertising and Unfair Trade Practices for Promotion of Consumerism The greatest tool of consumerism has been aggressive advertising. Its development and spread has been parallel to industrial and technological progress of society. Business community maintains that the onset of commercialism has improved the quality of general life. Commercialism has indeed added to convenience and material comfort. Advertising is perceived by them as a necessity for promoting new products and keeping the consumer informed about availability and choice in the market. Advertising has put down its roots and has spread with the help of economic and political power. The consumer has to evolve an agenda to control the market forces whose ultimate aim is to turn citizens into consumers. A highly commercialised society pushes consumers towards short term convenience and pleasures and causes long term environment and cultural crises. Resistance to over consumption has to come through assumption of consumer responsibility. Aggressive advertising makes it difficult for consumers to l&d environment-sensitive lives. It projects and promotes wasteful We-styles. Hence it is the consumer's responsibility to initiate economically and ecologically sound action. Advertising fiushes new products into people's lives by promoting them as more efficient, stylish or convenient to use. Aggressive advertising invades almost every aspect of urban living, creating needs where Consumer Responsibilities none exists. It persuades and manipulates people to buy what they do not need. This is also done through trade practices like contests, unbelievable discounts, sales promotion exercises, offering items free of charge for the main item purchased. Imposition of commercialised attitudes dislocated the fragile relationship between humans and environment. It seeks to control people's lives, prompting them to initiate the lavish and luxurious life-style portrayed in the advertisements. On many occasions, such encouragement makes people lose sight of their eco-friendly cultural and approach to life. The current Indian scenario has seen an increase in commercial advertising. As information and commercial technologies have grown so has advertising. Almost every aspect of our life has been invaded by one or the other form of advertising. Hand bills, hoardings, print media, TV commercials, telemarketing are a few such means. Every segment of society is targeted and manipulated. And every aspect of life is invaded by advertising. Its influence is so pervasive that consumers do not even realize the extent of change in their perception and attitudes. The greatest victims of this activity are the vulnerable sections of the society, namely children, non-literate, rural population and housewives.

Question 4. What is the concept of Consumer Protection? Why consumer protection is required in contemporary business world? or Question Define and explain Consumer protection. What is the need of Consumer protection in this competitive business world? Or Question- what is the need of consumer protection? Discuss the voluntary methods of consumer protection. June, 2010 Answer: Consumer Protection
Consumer protection consists of laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. Consumer protection laws are a form of government regulation which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about productsparticularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of "consumer rights" (that consumers have various rights as consumers), and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints. Other organizations that promote consumer protection include government organizations and self-regulating business organizations such as consumer protection agencies and organizations, the Federal Trade Commission, ombudsmen, Better Business Bureaus, etc. A consumer is defined as someone who acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing. Consumer interests can also be protected by promoting competition in the markets which directly and indirectly serve consumers, consistent with economic efficiency, but this topic is treated in competition law. Consumer protection can also be asserted via non-government organizations and individuals as consumer activism. Consumer protection law or consumer law is considered an area of law that regulates private law relationships between individual consumers and the businesses that sell those goods and services. Consumer protection covers a wide range of topics, including but not necessarily limited to product liability, privacy rights, unfair business practices, fraud, misrepresentation,

and other consumer/business interactions. Consumer protection laws deal with a wide range of issues including credit repair, debt repair, product safety, service and sales contracts, bill collector regulation, pricing, utility turnoffs, consolidation, personal loans that may lead to bankruptcy. CONCEPT OF CONSUMER PROTECTION Consumer protection means safeguarding the interest and rights of consumers. In other words, it refers to the measures adopted for the protection of consumers from unscrupulous and unethical malpractices by the business and to provide them speedy redressal of their grievances. The most common business malpractices leading to consumer exploitation are given below. 1. Sale of adulterated goods i.e., adding something inferior to the product being sold. 2. Sale of spurious goods i.e., selling something of little value instead of the real product. 3. Sale of sub-standard goods i.e., sale of goods which do not confirm to prescribed 4. quality standards. 5. Sale of duplicate goods. 6. Use of false weights and measures leading to underweight. 7. Hoarding and black-marketing leading to scarcity and rise in price. 8. Charging more than the Maximum Retail Price (MRP) fixed for the product. 9. Supply of defective goods. 10. Misleading advertisements i.e., advertisements falsely claiming a product or service to be of superior quality, grade or standard. 11. Supply of inferior services i.e., quality of service lower than the quality agreed upon. The above instances show the exploitation of consumers in the context of goods and services. In a democratic nation like India, should we allow this to happen? So the measures adopted by the government or non-government organisations (NGOs) for safeguarding the interests of the consumers constitute consumer protection. Examples of Consumer Exploitation in India The after sales service provider of the television set charged Rs 200 as service charge though he repaired the set within the warranty period. The tickets issued to different passengers on the same day for the same journey showed the same seat number. Penalty of Rs. 50 was charged by SBI after issuing the cheque book to the customer showing that the balance available in the account was less than the minimum required balance for issue of cheque book. The supply of cooking gas cylinder to the consumers is found to be underweight. Need for Consumer Protection

Consumer protection is to protect buyer from the seller. Everyday of our lives we consume, use, or simply come into contact with countless different products. We should be able to assume that those products are safe. Not absolutely safe - that remains unattainable. The goods we buy have become increasingly more complex. Modern technology and mass-marketing techniques combined with high-pressure salesmanship and sharp advertising can confuse the consumer. It isn't always possible or practical to examine or test things before buying. This is a pre-packed, ready-processed age where the gap between producer and purchaser has widened enormously. Very few traders actually manufacture, pack, distribute and sell their own goods as there is usually a chain of other people involved increasing the chances of something going wrong, thus we need an effective system of consumer protection to deal with any problems and, to help prevent them from arising again in the future. Consumer protection has been around for centuries. Hundreds of years ago merchants realised that both they and their customers benefited from having a standard system of weights and measures. It protected the honest from the dishonest. The aim of Consumer Protection Act is to help safeguard the consumer from the products that do not reach a reasonable level of safety. Clearly the consumer gains from this legislation. But looking forward firms will also recognise that it is in the interest to outlaw unfair competition from traders who cut corners on safety. Consumer Protection Act is important to all those with an interest in the safety of products that are put onto the market. The aim of the Consumer Protection Act 1987 was to help to safeguard the consumer from products that do not reach a reasonable level of safety. The main areas dealt with can be described as Product Liability and Consumer Safety. Defective products are defined, as being those where the safety of the product is not such as persons generally is entitled to expect. On the other hand a product will not be considered defective simply because it is of poor quality or because a safer version is subsequently put on the market. In the Sale of Goods Act 1893 the companies could exclude all your implied terms. This is known as the doctrine 'Caveat Emptor' which means let the buyers beware for example if you buy a pair of party shoes and fell on the football The necessity of adopting measures to protect the interest of consumers arises mainly due to their helpless position and the unfair business practices. No doubt consumers have the basic right to be protected from the loss or injuiry caused on account of defective goods and deficiency of services. However, consumers are unable to make use of their rights due to lack of awareness and ignorance. For example, as consumers we have the right to choose the goods of right quality from a variety of similar goods available in the market. But often we fail to make the right choice because of misleading advertisements by which we are carried away and buy sub-standard goods. Under certain circumstances, we are helpless in the sense of our inability to verify the quality of products. The clever shopkeeper can deceive us by his persuasive words. If the date of expiry on a strip of medicinal tablets is not legible, we may be in a hurry and depend on what

the seller tells us. If the medicine does not have the desired effect, we may go to the doctor again and request him to prescribe some other medicine, we forget that the medicine we bought might not have had the effect as we were supplied the medicne after its date of expiry. Often we are guided by some of our beliefs without any basis. For instance, many of us believe that higher price indicates better quality and so do not mind paying higher price for a product if the salesmen recommends it to be of good quality. Again, it is a common belief that imported goods are inevitably of a superior quality. So if there is a printed label or a mark that shows a product is made in a foreign country, we may buy it at a higher price without verifying its place of manufacture. Consumer Protection Processed food sold in packets, like potato chips, are not good for health. but young boys and girls buy these because they are tasty. Certain brands of soft drink are popular with young people as the brand ambassadors shown on the TV are popular film artists or cricketers and what they say carries lot of weight with their fans. Excessive use of soft drinks is also not good for health. If seems we have forgotten fresh lime water with sugar or salt as a good drink. Producers of goods often put standard certification marks like ISI on the package which are genuinely certified. Similarly, if packaged good are sold short of weight we pay for, it is very difficulty to verify always the weights before buying. Sometimes the weighing machines are defective. Above all, consumers are not fully aware of remedies open to them if goods are defective or there is deficiency of service. So, you can very well realise why steps must be taken to protect consumers from business practices which are unfair and may cause loss and injury to health and other dangerous effects. The other main arguments in favour of consumer protection are as follows:

Social Responsibility The business must be guided by certain social and ethical norms. It is the moral responsibility of the business to serve the interest of consumers. Keeping in line with this principle, it is the duty of producers and traders to provide right quality and quantity of goods at fair prices to the consumers. Increasing Awareness The consumers are becoming more mature and conscious of their rights against the malpractices by the business. There are many consumer organisations and associations who are making efforts to build consumer awareness, taking up their cases at various levels and helping them to enforce their rights. Consumer Satisfaction

Father of the Nation Mahatma Gandhi had once given a call to manufactures and traders to treat your consumers as god. Consumers satisfaction is the key to success of business. Hence, the businessmen should take every step to serve the interests of consumers by providing them quality goods and services at reasonable price. Principle of Social Justice Exploitation of consumers is against the directive principles of state policy as laid down in the Constitution of India. Keeping in line with this principle, it is expected from the manufacturers, traders and service providers to refrain from malpractices and take care of consumers interest. Principle of Trusteeship According to Gandhian philosophy, manufactures and producers are not the real owners of the business. Resources are supplied by the society. They are merely the trustees of the resources and, therefore, they should use such resources effectively for the benefit of the society, which includes the consumers. Survival and Growth of Business The business has to serve consumer interests for their own survival and growth. On account of globalisation and increased competition, any business organisation which indulges in malpractices or fails to provide improved services to their ultimate consumer shall find it difficult to continue. Hence, they must in their own long run interest, become consumer oriented.

Question 6 What is the fundamentals of consumer empowerment and in this context how do we see specific Rights of Consumers? Answer: Consumer Empowerment
Consumer Empowerment i Today's consumer is more acted upon than acting. Today's consumer's current profile is that of a passive, helpless, hapless, gullible individual who owes responsibility only to himself or herself. His or her social, cultural, environmental national and global links are either acknowledged or supported. The market forces exploit and manipulate his or her desire for a good life and convenience by translating them into materialistic greed. Hence, it is necessary for a consumer and the society at large, to be aware of these practices. The consumer of the future needs to become sufficiently aware so that he or she can use all avenues of self protection and empowerment available. The foremost and major area of his or her activity however, is under his or her individual control. Each and every consumer of whatever age, gender, class or region must assume personal responsibility for right consumer behaviour. This is the only way in which one can regain control over his or her personal life and contribute towards improving the quality of the life of the community. Following are some of the constructive ways in which the consumer can empower oneself:

Most of the problems of todays consumer are associated with irresponsible consumption patterns. Hence, the first step that a responsible consumer can take is to exercise restraint and discretion in purchase decisions. Since advertising seeks to promote inappropriate and needless choices, the consumer should, when making a purchase, assess its necessity and need in his or her life. The consumer should make sure that the decision about a particular need is made by him or her and not the market. As far as possible, none of his or her purchases should generate excess or nonbiodegradable garbage. He or she should pay as much attention to the quality of packaging as to the quality of a product. Individual and collective consumer action can ensure that the "Polluter Pays Principle" (PPP) comes into operation. For example, if an industry has polluted the environment in any way, then it must build into its infrastructure the remedies for reducing and controlling such pollution. The consumer should create a demand for durable, recyclable, reparable, reusable products. The Consumer should demand information about the products. This information could be about pricing, ingredients, manufacture and expiry dates, environmental costs of products, nutrition and health related information, warranties and Guarantees. The Consumers must educate himself or herself about his or her legal rights and availability of redressal mechanisms. An aware, alert, and conscientious consumer behaviour determines quality of life in a society. Apathy, indifference, inaction on the part of the individual consumer, affects the others' rights in many ways. Collective or community inaction and lack of involvement affect functioning of public and government institutions and society in general. Responsible consumer behaviour individually o r collectively ensures smooth social functioning. Consumers are also voters. Hence, through exercise of informed choices about. correct ideologies and objectives, consumers c a n ensure a politically healthy society. Consumer Responsibility extends from clean back lanes of individual homes to global warming, deforestation, labour laws, corruption. Everywhere consumer awareness halts negative action ensures quality of life. Consumers can and should assume responsibility for smooth and accountable functioning of public services. Taking necessary action on infringement of consumer rights by public services and utilities or political systems also comes under consumer responsibility. Timely intervention, inquiry into malpractices, lodging of imrnedicte protest by the concerned consumers to the appropriate authorities and responsible persons also means exercise .of consumer responsibility

Rights of Consumers
Consumer must have some basic and specific rights. In context of consumer empowerment consumer had given six rights to his or her credit. These rights are as follows: 1. Right to safety 2. Right to be informed 3. Right to choose 4. Right to be heard

5. Right to redress and 6. Right to represent. These rights had paved the way for organised consumer movement in the USA and later it spread all over the world. In India, the Consumer Protection Act, 1986 has also provided for the same rights to consumers. Let us have a brief idea about these rights of consumers. 1. Right to Safety It is the right of the consumers to be protected against goods and services which are hazardous to health or life. For example, defective vehicles could lead to serious accidents. The same is true of electrical appliances with sub-standard material. Only recently, there were mass protests and boycott of soft drinks due to presence of hazardous pesticides beyond permissible limits. Thus, right to safety is an important right available to the consumer which ensures that the manufacturers shall not produce and sell sub-standard and dangerous products. 2. Right to be Informed The right to be informed is an important component of consumer protection. The consumer must be provided with adequate and accurate information about quality, quantity, purity, standard and the price of the goods and services. Now-a-days the manufacturers provide detailed information about the contents of the product, its quantity, date of manufacturing, date of expiry, maximum retail price, precautions to be taken, etc. on the label and package of the product. Such information helps the consumers in their buying decision and use of the product. 3. Right to Choose The right to choose provides that the consumer must be assured, whenever possible, access to a variety of goods and services at competitive prices. If the market has enough varieties of products at highly competitive prices, the buyers have an opportunity of wide selection. However, incase of monopolies like railways, postal service and electricity supply etc. it implies a right to be assured of satisfactory quality of service at a fair price. 4. Right to be Heard The rights to safety, information and choice will be frivolous without the right to be heard. This right has three interpretations. Broadly speaking, this right means that consumers have a right to be consulted by Government and public bodies when decisions and policies are made affecting consumer interests. Also, consumers have a right to be heard by manufactures, dealers and advertisers about their opinion on production, marketing decisions and any grievances of the consumers. Now-a-days, most of the top manufacturers and firms have set up consumer service cells to attend to consumers complaints and take appropriate steps for their redressal. Thirdly, consumers have the right to be heard in legal proceedings in law courts dealing with consumer complaints.

5. Right to Seek Redressal The consumers have been given the right of redressal of their grievances relating to the performance, grade, quality etc. of the goods and services. If required, the product must be repaired or replaced by the seller or manufacturer. The Consumer Protection Act has duly provides for a fair settlement of genuine grievances of the consumers. It has also set up a proper mechanism for their redressal at district, state and national levels. 6. Right to Consumer Education It means the right to receive knowledge and skill to become informed consumer. In this direction the consumer associations, educational institutions and the policy makers can play an important part. They are expected to impart information and knowledge about (i) the relevant laws which are aimed at preventing unfair trade practices, (ii) the ways and means which dishonest traders and producers may adopt to deceive the consumers, (iii) insistence on a bill or receipt at the time of purchase, and (iv) the procedure to be followed by consumers while making complaints. Effective consumer education leads to an increased level of consumer awareness and help them to enforce their rights more effectively, and protect themselves against fraudulent, deceitful and grossly misleading advertisement, labelling, etc.

Question-6. What are the new approaches to Consumer Protection? Answer:

Approaches to Consumer Protection In so many countries of the world like Britain and the US, the new governments elected after the financial crisis and recession have promised that better consumer protection would be central to a new regulatory regime. In many forward looking countries, that aim has been steadily watered down. There are some new approaches to consumer protection as follows: Regulatory Approach to Consumer Protection The Consumer Protection and Markets Authority will now be the Financial Conduct Authority. The change in name is appropriate, since its objective will be protecting and enhancing confidence in the financial system. Really? The mission of the Medicines and Healthcare Regulatory Agency is to enhance and safeguard the health of the public by ensuring that medicines and medical devices work, and are acceptably safe. If the MHRA is successful in that endeavour, the public is likely to have confidence in the healthcare system. But it is that way round. Protecting and enhancing confidence in the pharmaceutical industry is the duty, not of its regulator, but its trade association.

The distinction between confidence and justified confidence is critical. In practice, the MHRA most often engages with medicines in which a segment of the public has confidence, but which do not work or are not safe. This is an even greater problem in financial services. The new economy bubble, the sale of complex asset backed securities, the scale of Greek debt; these problems arose not because consumers did not have enough confidence in the products, but because they had too much. Fraudsters are called confidence tricksters, and part of the job of the police and other regulators is public disillusionment. The naming and shaming of large companies that had abused their reputations by mis-selling products has probably been the most effective regulatory action the Financial Services Authority has taken in support of consumer protection. The government at first proclaimed that the new agency would be a consumer champion, but now resists the notion that it should be a consumer advocate. Rightly: the barrister who makes the best case for a guilty client is an advocate, but a regulatory agency should champion the interests of consumers overall rather than individual consumers. But this real distinction seems to have been elided into the idea of regulatory authority as arbiter between the conflicting interests of consumers and producers. The medicines analogy is helpful again here. The MHRA is expected to balance the conflicting interests of consumers in product safety and the rapid and cheap dissemination of new drugs: pharmaceutical companies profits are subordinate, and incidental, to the welfare of the public. This distinction is sometimes hard to maintain under industry pressure, but the principle is clear. The analogy between medicine and financial services should not be taken too far. The wrong medicines can kill people, the wrong financial products only impoverish them. The offering of new financial products should not be subject to prior regulatory approval, as is the case with new drugs: it is arguable that the present regulatory regime for medicines goes too far in slowing access to beneficial new products. It is sufficient that the new authority will have powers to ban products (powers it is unlikely to use) and will move away from the assumption that if you give your customers enough information that exhausts your responsibilities to them. But the priorities of the new agency are skewed by implacable resistance to the promotion of competition as regulatory objective. This is the product of a broader unwillingness to recognise that control of structure is a more powerful regulatory tool than the monitoring of behaviour: it is more effective to give incentives to serve consumers well than to supervise the way in which they are served. We know from experience what the likely result of such supervision will be. The activities of the Financial Conduct Authority will be even more extensive and intrusive. Warren approach to Consumer Protection

Elizabeth Warren, the architect of the new Bureau of Consumer Financial Protection, spelled out a sweeping new strategy today to use the latest in crowd-sourcing technology to collect tips from millions of consumers about deceptive new financial practices, from misleading mortgages and improper gotcha fees on credit cards to outright fraud. In an interview Warren said new techniques like crowd-sourcing -- scaled-up variations and make it possible to collect valuable information from millions of ordinary consumers who report problems as they arise. Using new systems to organize and find patterns in all that information, Warren said, the bureau could be able to spot new enforcement targets in a matter of days -- an unheard-of response time for traditional regulators. Crowd-sourcing has become one of the hottest forms of information gathering, and refers to online collaborations like Wikipedia that are built through contributions from thousands or even millions of people. It is an entirely new approach for government regulators, but Warren said she believes the opportunities are great. Its also about how we will receive information about how the world works. Its about how people will tell us about what is happening. I want you to think about this more like heat maps for targeted ZIP codes where problems are emerging, or among certain demographic groups, or among certain issuers. Thinking to consumer complaints comes as she ramps up the establishment of the agency for next years and hires about 1,000 workers. Consumer groups have been concerned that the new agency will have insufficient resources to handle consumer complaints given the wide swath under its jurisdiction, from home mortgages to payday loans to credit reports. The Dodd-Frank financial regulatory law requires the bureau to develop a nationwide consumer-complaint center, but Warrens ideas go beyond those traditionally embraced by federal agencies. Under her vision, Warren imagines a subset of Americans reporting on a specific problem, such as extraneous fine print included in a banks checking account statement, documenting it through use of a camera phone, and then emailing it to the bureau within seconds. The bureau would use such data to target its enforcement. In the old world, it would be up for the agency to come in, and you look very slowly through a sample of the banks to see what products they mailed out. And did they add a lot of fine print, nonsense by regulation that was not supposed to be there. All of the sudden you got information, and you got it much faster, and you have it more pinpointed and that becomes relevant for purposes of where you spend enforcement resources," she added. The strategy would also overhaul current regulatory enforcement by making it much nimbler, ready to immediately react to issues, rather than relying on examination and enforcement through a rote schedule. The change would have a major effect on banks and other covered institutions, forcing them to be more responsive to a regulator than they have been in the past,

as well as on guard to handle any public-relations fallout that could quickly spread through a crowd sourcing effort. The power of enforcement will be partly about the agency. But it will be partly, in the future, being about how people crowd source around identified problems. The idea that people can talk to each other, whether its through the agency or from other platforms. In a sense, the whole notion of how markets work will change.

Question-7. What do you mean by Consumer buying motives? How consumer buying motives are used in marketing? Or Question-Write notes on (i) Consumer Buying Motives (ii) Consumer Sovereignty. Answer:
A motive can be defined as a drive or an urge for which an individual seeks satisfaction. It becomes a buying motive when the individual seeks satisfaction through the purchase of something. Consumer Buying motives are the inner feelings of the buyers and he tries to satisfy them at any rate to the maximum possible extent. Buying motives being model of consumer mind on specifications play an important role in the whole scheme of selling and therefore, production. A salesman sales those products and service wanted by the buyers and therefore, his firm produces or stocks those are likely or sure to be sold a profit to the owner and satisfaction to the buyer. The significance of buying motive are as follows: 1. They are the basis in product planning and developments. 2. They are determinants of pricing policies. 3. They are helpful in designing promotional policies. 4. They are planks of distribution policies. So buying motive have direct correlation with each P of market mix. No successful business house is capable of designing and implementing suitable market mix without reference to buying motives of customers because, consumer is the kingpin in the whole scheme of marketing.

June,2010

Primary buying motives Food and Drink Comfort To attract opposite sex Welfare of beloved ones Freedom from fear and danger To be superior Social approval To live longer

Secondary buying motives Bargains Information Cleanliness Efficiency Convenience Dependability, quality Style beauty Economy, profit Curiosity.

All these motives are not equally forceful. Here we describe only important buying motives: 1.Freedom from fear and danger: Fear is a negative motive but is a very owerful one. The most basic instinct of a human being is self-preservation. Fear is a very powerful and compelling force in human affair. The marketing man must ascertain the possible fear of death, fear of loss and fear for the future, fear can sell anything like hair oil through fear of getting bald. 2. Desire for economy: Persons desire money to satisfy their other desires. The businessman wants money to make more profits or lower costs. The manufacturers make purchase of high priced heavy machinery to lower down their cost of production and thereby increases profits. In the same way every customer likes his money's worth. 3. Vanity: Women spend much time, thought and money on their personal appearance like cosmetics, hairdo and new styles. Hence vanity is a powerful motive in the hands of the marketing man being the safest appeal that may be used. 4. Appreciation: Everybody desires to be appreciated and complimented. He likes to be recognized as an important person. Because of this human intrait, it may be useful to use indirect method in place of direct methods that might prove offensive. 5. Fashion: It is the desire of everyone to imitate what others are doing. This may also be called imitation motive. It is closely linked with pride or desire for importance. This motive can be well exploited by the marketer. 6. Possession: The instincts of possession or a desire to call things as mine' leads persons to hoard and collect things. Some persons collect postage stamps and old coins. 7. Attraction or romance: Fancy clothes, cosmetics, perfumes, etc. are in great demand on account of the instinct of sex or a desire to attract the opposite sex. It is no wonder why this instinct is very often used by marketing men.

8. Love of others: This motive plays an important part when parents purchase all kinds of things for their children like toy, fancy garments and other presents, may go in for life insurance to make provision for their future. A bachelor going to marry will purchase numerous domestic articles. Therefore, this particular motive is as time described as that of home building.' This instinct is also related to comfort and convenience motive. 9. Health or physical well-being: Many persons purchase health foods, vitamin tablets and patent medicines to maintain their health and physique well-being. 10. Comfort and convenience: Most people don't like to exert much. Hence this motive may be well exploited by the marketing particularly for selling luxury items like motor, cars, sofa sets, furniture, vacuum cleaners, washing machine, television sets, etc. The sale of air conditioners and water coolers, fans is motivated in summer by this motive for comfort. Using consumer buying motives in marketing Human behavior is fundamentally related to instincts. It is these instincts which make a person behave differently at different times. The appropriate motive must be crystallized if the marketing program is to be effective and appropriate in terms of product features and advertising strategy. Patronage motives in retailing Many people buy their daily requirements from a certain store but with patronage motives. The choice of a particular store depends on factors such as location, variety of goods stocked, reputation of the store, attitude adopted by the salesman in the store, the services offered by the store, the general appearance of the store etc. Some people prefer shopping at glamorous stores, others select economical stores. Thus persons prefer to match with their status or standard of living with that of the store. Link buying motive with selling points The links of buying motive with selling points are as follows: (a) Buying motive is the inner feeling or the usage that propels the person to buy a particular product. Selling points are the seller statements or specification. The deal takes place if the consumer expectation matches with those of sellers offers and specifications. (b) Buying motive explain the reasons as to why the customer buys a particular product. These buying motives provide a solid base on which the selling house or salesman develops the selling. (c) Taking consumer as the king of modern marketing system, we come to the conclusion that it is the buying motive first from which selling points stem. (d) The phrase selling point or talking point is much more comprehensive than buying-motive. A single telling-point is capable of catering to so many buying motives at a time, but a single buying-motive can not meet the magnitude of any selling point.

Consumer Buying Process

What influences consumers to purchase products or services? The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer. When purchasing a product there are several processes, which consumers go through. These will be discussed below. 1. Problem or Need Recognition How do you decide which particular product or service to purchase? It could be that your BluRay DVD player stops working and you now have to look for a new one. All those Blu-Ray DVD films you purchased you can no longer play! So you have a problem or a new need. For high value items like a Blu-Ray player or a car or other low frequency purchased products this is the process we would take. However, for impulse low frequency purchases e.g. chocolate the process is different. 2. Information search So we have a problem, our Blu-Ray player no longer works and we need to buy a new one. What is the solution? Yes go out and purchase a new one, but which brand? Shall we buy the same brand as the one that blew up? Or stay clear of that? Consumer often go on some form of information search to help them through their purchase decision. Sources of information could be family, friends, neighbours who may have the product you have in mind, alternatively you may ask the sales people, or dealers, or read specialist magazines like What DVD? to help with the purchase decision. You may even actually examine the product before you decide to purchase it. 3. Evaluation of different purchase options. So what Blu-Ray DVD player do we purchase? Shall it be Sony, Toshiba or Bush? Consumers allocate factors to certain products, almost like a point scoring system which they work out in their mind over which brand to purchase. so for one customer, brand may be more important then price and another, features and price are just as This means that consumers know what features from the rivals will benefit them and they attach different degrees of importance to each attribute. For example sound maybe better on the Sony product and picture on the Toshiba , but picture clarity is more important to you then sound. Consumers usually have some sort of brand preference with companies as they may have had a good history with a particular brand or their friends may have had a reliable history with one, but if the decision falls between the Sony DVD or Toshiba then which one shall it be? It could be that the a review the consumer reads on the particular Toshiba product may have tipped the balance and that they will purchase that brand. 4. Purchase decision

Through the evaluation process discussed above, consumers will reach their final purchase decision and they reach the final process of going through the purchase action. The process of going to the shop to buy the product, which for some consumers can be as just as rewarding as actually purchasing the product. Purchase of the product can either be through the store, the web, or over the phone. Post Purchase Behaviour Ever have doubts about the product after you purchased it? This simply is post purchase behaviour and research shows that it is a common trait amongst purchasers of products. Manufacturers of products clearly want recent consumers to feel proud of their purchase and they want the customer to purchase from them again. It is therefore just as important for manufacturers to advertise for the sake of their recent purchaser so consumers feel comfortable that they own a product from a strong and reputable organisation. This limits post purchase behaviour. i.e. You feel reassured that you own the latest advertised product.

Consumer Sovereignty
Consumer sovereignty is a term used in economics. It refers to consumers determining the production of goods. The term can prescribe what consumers should be permitted, or describe what consumers are permitted. The term was coined by William Hutt in his 1936 book "Economists and the Public". In unrestricted markets, those with income or wealth are able to use their purchasing power to motivate producers. Customers do not necessarily have to buy and, if dissatisfied, can take their business elsewhere, while the profit-seeking sellers find that they can make the greatest profit by providing the best possible products for the price (or the lowest possible price for a given product). To most neoclassical economists, complete consumer sovereignty is an ideal rather than a reality because of market failure. Some economists of the Chicago school and the Austrian school see consumer sovereignty as a reality in a free market economy without interference from government or other non-market institutions, or anti-market institutions such as monopolies or cartels. That is, alleged market failures are seen as the result of non-market forces. Consumers are King Consumer sovereignty means that buyers ultimately determine which goods and services remain in production. While businesses can produce and attempt to sell whatever goods they choose, if the goods fail to satisfy the wants and needs, consumers decide not to buy. If the consumers do not buy, the businesses do not sell and the goods are not produced. Suppose, for example, that Manny Mustard's House of Sandwich introduces a new menu item-a sandwich made with fried squash, sweet pickle relish, blue cheese dressing, sliced cabbage, and pumpernickel bread. Manny, the proprietor of this establishment, thoroughly enjoys this sandwich and thinks his patrons will as well. If they do, then business increases, profits are

higher, overdue business loans can be paid off, and he can finally send his unruly step-son away to military school. Manny's business success, however, depends on his patrons. Will they like his new fried squash, sweet pickle relish, blue cheese dressing, sliced cabbage, pumpernickel bread sandwich? If they do not, then his step-son will continue his unruly behavior. The consumers are king! They ultimately decide Manny's business fate. Consumers as Pawns Consumers are sovereign as long as they know what they want and are able to act upon their desires. If consumers are tricked or fooled into making purchases that do not satisfy their wants and needs due to limited information or deceitful business practices, then consumers might not be the rulers of the economic realm. They might be pawns. Consider the case of Curious Curt's Curio Corner. The Curio Corner sells nick-knacks, jewelry, posters, and assorted novelty items. Curt's latest novelty offering is a magnetic mood pendant purported to improve the wearer's state of mind and outlook on life and it sells for only a dollar. The Curio Corner's marketing efforts are boosted by an intense advertisingcampaign promoting the psychological benefits of the magnetic mood pendant. Millions of consumers hear about the magnetic mood pendant and are swayed sufficiently by the advertising to give it a try. After all, it only costs a dollar. Unfortunately the magnetic mood pendant has no impact on state of mind or outlook on life. It is just a magnet. It does not work. It does not really do anything. Deluged by advertising consumers buy. Millions believe it works. But it does not. And sales of the magnetic mood pendant persist. Gullible consumers keep buying. Curious Curt continues to sell. But it does not work. It does not provide the consumer satisfaction that buyers expect. Consumers are not king. They are pawns.

The Concept of Consumer Soverignity in Economic Theory

The great Austrian economist Ludwig von Mises formulated the idea of "consumer sovereignty," using a term originally coined by William Hutt in a critique of Keynesianism, to describe the role of consumers and producers in the market process. Mises's analogy has its limits, as his student Murray Rothbard would recognize, but it remains nonetheless an eloquent defense of the free market. When the limits of the analogy are recognized, one will find the free market to be even superior to what a full application of the analogy might suggest. By "consumer sovereignty" Mises meant that, in a free market, the consumers ultimately dictate what is to be produced. While the capitalists and entrepreneurs might steer the economy, they ultimately take orders from the consumers by responding to demand for certain

goods and lack of demand for others. Provided that they wish to remain in business and generate a positive net income, they need to satisfy the preferences of consumers, who are the sources of said income. Their personal profit, hence, is inextricably linked to furnishing the goods and services their customers desire. If an entrepreneur consistently refuses to do this, he will simply lose money until he is no longer able to sustain his entrepreneurial function. According to Mises, every dollar spent by consumers on the free market is like a ballot cast in favor of the producers manufacturing a certain product. The more consumers demand a given product and "vote" for it through their expenditure decisions, the more producers will furnish that product. In reality, one might find apparent "exceptions" to the successful producers' tendency to make decisions maximizing monetary profit. An employer might hire his less productive family member instead of another worker who would bestow greater revenue upon the firm. This does not, however, deny the universality of consumer sovereignty, according to Mises. Instead, the employer is acting partly as a consumer in his decision to hire the family member. He consumes the opportunity cost of hiring his relative, which is the additional income he would have gotten by hiring the more productive worker. In his capacity as a consumer, the employer is, too, sovereign: he is willing to pay the opportunity cost and expects to get in return the satisfaction of hiring his relative. On a free market, he will receive that satisfaction. To the extent that he and his newly hired relative are working to satisfy the demand of other consumers on

Question- 8.What is the Doctrine of Caveat emptor and doctrine of caveat venditor? Explain in detail.

Answer:
Caveat emptor means let the buyer beware or the buyers should examine check for themselves things which they intend to purchase. They cannot later hold the vendor responsible for the broen condition of the thing bought. Given the powerful effects of caveat emptor, many jurisdictions have sought to defeat or defuse it by introducing consumer protect or sale of goods legislation but especially as regards land, the maxim may apply. A person who buys a house sight unseen, and with no third-party inspection, who later seeks to reverse the sale because of some issue related to fitness for habitation, may well have no remedy because of the dotricine of caveat emptor. The doctrine of caveat emptor is Latin for buyer beware.It is an ancient doctrine that the purchaser buys at their own risk. In certain situations the buyer can cancel the sale and get their money back.

It is best to check your state laws. In the United States, that doctrine has been watered down by consumer protection laws, case law that imposes implied warranties and some buyer protections, especially consumer protection sections of state codes, that give an imprudent, careless or naive buyer more protection in certain cases. CAVEAT EMPTOR, or buyer beware, can carry a seller just so far. It may work when a private owner sells an old junker "AS IS". However, in other instances a savvy consumer can use several legal principles to counter the doctrine of caveat emptor:

fraudulent or negligent misrepresentation unfair business practices if the product or services do not meet reasonable levels of merchantibility or practice standards reasonable expectations special state consumer laws that protect consumers such as lemon laws or demand letters

Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud. Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions now, the law requires that goods must be of "merchantable quality." However, this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious. Doctrine of Caveat Venditor Caveat venditor is Latin word for "let the seller beware." It is a counter to caveat emptor and suggests that sellers can also be deceived in a market transaction. This forces the seller to take responsibility for the product and discourages sellers from selling products of unreasonable quality. Caveat venditor is in contrast to the legal doctrine of caveat emptor, or, let the buyer beware. The doctrine of caveat vendor establishes a set of good business practices that protect the seller. The seller must verify the authority of the buyer to contract on behalf of their company. Ask for certificates of authority. Typically, a seller should make appropriate inquiries as to the authority of the buyer and the quality of the payment: In other words, verify payment for goods and/or services prior to their delivery. The seller with any doubts can ask for a cashier's

check. The seller must be alert to checks received for payment that show a notation of "payment in full" when the payment is not in full. Keep copies of all checks to monitor the authorized signatures. For the small business the practice of using "PayPal" services for internet sales is a good example of the doctrine of caveat venditor in action. By using that service the seller is guaranteed that payment is made before the goods are delivered. For a good discussion see the link provided below. When a sale is subject to this warning the purchaser assumes the risk that the product might be either defective or unsuitable to his or her needs. This rule is not designed to shield sellers who engage in Fraud or bad faith dealing by making false or misleading representations about the quality or condition of a particular product. It merely summarizes the concept that a purchaser must examine, judge, and test a product considered for purchase himself or herself. The modern trend in laws protecting consumers, however, has minimized the importance of this rule. Although the buyer is still required to make a reasonable inspection of goods upon purchase, increased responsibilities have been placed upon the seller, and the doctrine of caveat venditor (Latin for "let the seller beware") has become more prevalent. Generally, there is a legal presumption that a seller makes certain warranties unless the buyer and the seller agree otherwise. One such Warranty is the Implied Warranty of merchantability. If a person buys soap, for example, there is an implied warranty that it will clean; if a person buys skis, there is an implied warranty that they will be safe to use on the slopes. A seller who is in the business of regularly selling a particular type of goods has still greater responsibilities in dealing with an average customer. A person purchasing antiques from an antique dealer, or jewelry from a jeweler, is justified in his or her reliance on the expertise of the seller. If both the buyer and the seller are negotiating from equal bargaining positions, however, the doctrine of caveat emptor would apply.

Question- 9. What is the concept of Consumers Sovereignty? Or Question What do you mean by Sovereignty of consumer and how it maintained?

Answer:
Consumer sovereignty is a term used in economics. It refers to consumers determining the production of goods. The term can prescribe what consumers should be permitted, or describe what consumers are permitted. The term was coined by William Hutt in his 1936 book "Economists and the Public". In unrestricted markets, those with income or wealth are able to use their purchasing power to motivate producers. Customers do not necessarily have to buy and, if dissatisfied, can take their business elsewhere, while the profit-seeking sellers find that they can make the greatest profit by providing the best possible products for the price (or the lowest possible price for a given product). To most neoclassical economists, complete consumer sovereignty is an ideal rather than a reality because of market failure. Some economists of the Chicago school and the Austrian school see consumer sovereignty as a reality in a free market economy without interference from government or other non-market institutions, or anti-market institutions such as monopolies or cartels. That is, alleged market failures are seen as the result of non-market forces. Consumer Sovereignty in fact is the power of consumers to determine what goods and services are produced. The theory suggests that consumers, not producers, are the best judge of what products benefit them the most. Due to the fact that consumer markets depend so heavily on demand, producers must monitor the needs of these individuals if they want their products to have any chance at success. The great Austrian economist Ludwig von Mises formulated the idea of "consumer sovereignty," using a term originally coined by William Hutt in a critique of Keynesianism, to describe the role of consumers and producers in the market process. Mises's analogy has its limits, as his student Murray Rothbard would recognize, but it remains nonetheless an eloquent defense of the free market. When the limits of the analogy are recognized, one will find the free market to be even superior to what a full application of the analogy might suggest. By "consumer sovereignty" Mises meant that, in a free market, the consumers ultimately dictate what is to be produced. While the capitalists and entrepreneurs might steer the economy, they ultimately take orders from the consumers by responding to demand for certain goods and lack of demand for others. Provided that they wish to remain in business and generate a positive net income, they need to satisfy the preferences of consumers, who are the sources of said income. Their personal profit, hence, is inextricably linked to furnishing the goods and services their customers desire. If an entrepreneur consistently refuses to do this, he will simply lose money until he is no longer able to sustain his entrepreneurial function. According to Mises, every dollar spent by consumers on the free market is like a ballot cast in favor of the producers manufacturing a certain product. The more consumers demand a given

product and "vote" for it through their expenditure decisions, the more producers will furnish that product. In reality, one might find apparent "exceptions" to the successful producers' tendency to make decisions maximizing monetary profit. An employer might hire his less productive family member instead of another worker who would bestow greater revenue upon the firm. This does not, however, deny the universality of consumer sovereignty, according to Mises. Instead, the employer is acting partly as a consumer in his decision to hire the family member. He consumes the opportunity cost of hiring his relative, which is the additional income he would have gotten by hiring the more productive worker. In his capacity as a consumer, the employer is, too, sovereign: he is willing to pay the opportunity cost and expects to get in return the satisfaction of hiring his relative. On a free market, he will receive that satisfaction. To the extent that he and his newly hired relative are working to satisfy the demand of other consumers on the market, they are subject to the sovereignty of the latter. A capitalist or entrepreneur who acts strictly as a consumer and ignores market demand altogether will cease to be a capitalist or entrepreneur. Economists raised objections to the Misesian idea of consumer sovereignty. According to Rothbard, "sovereignty" is necessarily a political term, describing the exertion of compulsory force by one party against another. On a free market, nobody has the power to coerce anybody else; all are barred from initiating force. The consumers thus cannot dictate what any producer will make with that producer's own property. Rather, the consumers can only indirectly influence the producer by indicating their demand to that him. If the producer wishes to earn a profit, he would do well to respond to the signals the consumers give him. However, both consumers and producers are always sovereign; they maintain an individual self-sovereignty. The producer is always entitled to exercise his property rights and reject the fulfillment of a certain consumer demand. He might thereby lose monetarily, but that is his prerogative. He might, on the other hand, get away with acting partly as a consumer himself, as in the case of the employer who hires his less productive relative, provided that he earns enough revenue to stay in business. The market, on the other hand, offers neither a dearth of choices nor any compulsion to accept the will of the majority. I, as a consumer, might loathe rap music even though the majority of other consumers in my vicinity might demand it highly. Instead, I seek to obtain immense quantities of classical recordings for my consumption. Producers will take into account both my tastes and the tastes of the majority in creating their products: they will cater to both the market niche that demands rap music and the smaller market niche that demands classical

music. Thus, in a free market, the majority decision is not binding on all, and minority preferences of all sorts will be satisfied by entrepreneurs desiring to profit from them. While democracy severely limits individual self-sovereignty, the free market guarantees it absolutely. While the Misesian concept of consumer sovereignty is a fine analogy for describing the functions of a free market and the role of consumers therein, Rothbard correctly pinpointed the areas in which the analogy breaks down. Fortunately, with respect to those areas, the free market is even better than a universal application of the analogy would suggest. Opponents of the fully free market might raise the following worst-case scenario to challenge it. The producer of a certain good has mistakenly underrated the market demand for that good. In the efforts to keep the price of the good high enough to maximize monetary returns, he destroys what he believes to be the "excess" stockpile of his good, a stockpile that consumers actually demand. Consumers thereby suffer by not getting enough of a product which they highly value. Yet even here Rothbard came to the defense of the free market. Rothbard's first response to such a scenario would be: It will not likely happen again. The producer has made a mistake and has recognized it after the fact. He can only maximize his profits by correctly estimating consumer demand and selling precisely the quantity of goods his customers desire. He can best eliminate waste only by producing what he plans on selling, and nothing more. Surely, producing something only to destroy it in the future would be doubly wasteful, and the prudent businessman will rationally seek to avoid this in the future. Cutting costs to the optimal level will free up resources for the businessman to either personally consume or to devote to another line of production advantageous to consumers. If he wants to remain in business and prosper, he will adjust his operations to prevent future underestimations of consumer demand. The idea of consumer sovereignty, within the proper bounds, provides a firm justification for why the free market works to satisfy the preferences of every consumer. Recognizing those bounds, as Rothbard did, will additionally suggest why the absolute free market is superior to democracy or to any coercive initiation of force by one party against another. Indeed, the free market can be defended even against the worst-case scenario of the producer destroying a part of his own stockpile. When full economic liberty exists, so does full individual self-sovereigntya condition that benefits all market participants.

Question 10.What do you mean by consumer rights and What are the basic and specific consumer rights? What are the basic responsibilities of consumers? Answer:

Consumer Rights Consumer rights are laws aimed at protecting consumers when they buy a good or service. Some of these rights include safety, truthful and adequate information and availability to alternative products. Consumer rights were recognized broadly in many ancient Hindu, Islamic and Christian religious scriptures; however, no literary work formalized them into a concise set until the 1960s. Consumer rights in India and the modern world owe their origin to the consumer revolution of the pre-60s in the United States of America. India has been observing 15 March since 1989 as the National Consumers Day. This day has a historic importance as it was on this day in 1962, when the Bill for Consumer Rights was moved in the US Congress. During his speech President John F. Kennedy had remarked: If a consumer is offered inferior products, if prices are exorbitant, if drugs are unsafe or worthless, if the consumer is unable to choose on an informed basis, then his dollar is wasted, his health and safety may be threatened, and national interest suffers. On March 15, 1962, US President John F Kennedy made a historical speech about consumer rights as he introduced 'The Consumer Bill of Rights' in the US Congress. Ever since, countries all over the world have celebrated March 15 as the Consumers Day. However, in India December 24 is celebrated as the National Consumer Day since the Consumer Protection Act, 1986 was enacted on this day by the Indian Parliament. Kennedy strongly believed that it is vital to United States National Interest to ensure the welfare of the consumers, as it is the consumer who fundamentally drives the economy. He formulated four rights for consumers, namely the right to safety, right to choose, right to information and right to be heard which, in 1985, was accepted by the United Nations (UN). The UN added to this list the right to basic needs, right to representation, right to consumer education, and right to healthy environment.

Basic Consumer Rights Generally accepted basic consumer rights are (1) Right to safety: protection from hazardous goods. (2) Right to be informed: availability of information required for weighing alternatives, and protection from false and misleading claims in advertising and labeling practices. (3) Right to choose: availability of competing goods and services that offer alternatives in terms of price, quality, service. (4) Right to be heard: assurance that government will take full cognizance of the concerns of consumers, and will act with sympathy and dispatch through statutes and simple and expeditious administrative procedures. The Right to Safety

The assertion of this right is aimed at the defense of consumers against injuries caused by products other than automobile vehicles, and implies that products should cause no harm to their users if such use is executed as prescribed. The Right was established in 1972 by the US federal government, the Consumer Product Safety Commission (CPSC) has jurisdiction over thousands of commercial products, and powers that allow it to establish performance standards, require product testing and warning labels, demand immediate notification of defective products, and, when necessary, to force product recall. As stated in the Consumer Protection Act 1986, this consumer right is defined as the right to be protected against marketing of goods and services which are hazardous to life and property. Specifically significant in areas such as healthcare, food processing and pharmaceuticals, this right spans across any domain that could have a serious impact on the consumers health or well being such as Automobiles, Travel, Domestic Appliances, Housing etc. Violation of this right is almost always the cause of medical malpractice lawsuits in India. Every year, it is estimated that thousands, if not, millions of Indian citizens are killed or severely hurt by unscrupulous practices by hospitals, doctors, pharmacies and the automobile industry. Yet the Indian government, renowned for its callousness, fails to acknowledge this fact or to make a feeble attempt at maintaining statistics of these mishaps. Indian government is required to have world class product testing facilities to test drugs, cars, food, and any other consumable that could potentially be life threatening. The Right to Be Informed This right states that businesses should always provide consumers with enough appropriate information to make intelligent and informed product choices. Product information provided by a business should always be complete and truthful. Aiming to achieve protection against misleading information in the areas of financing, advertising, labeling, and packaging, the right to be informed is protected by several pieces of legislation passed between 1960 and 1980. This consumer right is defined as the 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 in the Consumer Protection Act of 1986. In the Indian market place, consumers get consumer information through two popular, yet unreliable means, namely advertising and word of mouth. Due to this, the consumers in India seldom have accurate and complete information to assess the true value, suitability, safety or reliability of any product. Mostly we find out hidden costs, lack of suitability, safety hazards and quality problems only after we have purchased the product. Another right again trumpeted by our government on paper, this right should ideally ensure that all consumable products are labeled in a standard manner which contains the cost, the ingredients, quantity, and instructions on how to safely consume the product. Unfortunately, even the medicines in India do not follow a standard labeling convention. Unit price publishing standards need to be established for consumer market places where costs are shown in standard units such as per kilogram, or per liter. The Right to Choose The right to free choice among product offerings states that consumers should have a variety of options provided by different companies from which to choose. The federal government has taken many steps to ensure the availability of a healthy environment open to competition

through legislation including limits on concept ownership through Patent Law, prevention of monopolistic business practices through Anti-Trust Legislation, and the outlaw of price cutting and gouging. Consumer Protection Act 1986 defines this right as the right to be assured, wherever possible, to have access to a variety of goods and services at competitive prices. Competition, invariably, is the best regulator of a market place. Existence of oligopolies, cartels and monopolies are counterproductive to consumerism. How often have you noticed a conglomerate of companies that lobby the government to compromise consumer rights? Our natural resources, telecommunications, liquor industry, airlines have all been controlled by a mafia at some point. Coming from a socialistic background, tolerance of monopolistic market forces are ingrained in the blood of Indian Consumers. The Right to Be Heard This right asserts the ability of consumers to voice complaints and concerns about a product in order to have the issue handled efficiently and responsively. While no federal agency is tasked with the specific duty of providing a forum for this interaction between consumer and producer, certain outlets exist to aid consumers if difficulty occurs in communication with an aggrieving party. State and federal Attorney Generals are equipped to aid their constituents in dealing with parties who have provided a product or service in a manner unsatisfactory to the consumer in violation of an applicable law. Also, the Better Business Bureau is a national nongovernmental organization whose sole agenda is to provide political lobbies and action on behalf of aggrieved consumers. According to the Consumer Protection Act 1986, the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums is referred to as the right to be heard. This right is supposed to empower Indian consumers to fearlessly voice their complaints and concerns against products and companies to ensure their issues are handled efficiently and expeditiously. However, to date the Government of India has not created a single outlet for the consumers to be heard or their opinions to be voiced. There are several websites that strive to do this, and the underlying mission of Consumerdaddy is to ensure that the voices of the consumers are heard by the corporate world. At the Consumerdaddy.com website, consumers can upload criticisms and file complaints. Each criticism filed will slightly lower the overall score of the product being criticized, and each complaint will be independently evaluated by an investigator from the Consumerdaddy.com website. Consumerdaddy.com gives the consumers the benefit of doubt always, in that their voice is heard over that of the company. We, at Consumerdaddy.com, strongly believe that a consumer is always right, and that customer is king. If a consumer makes an allegation about a product, the onus is on the dealer, manufacturer or supplying company to disprove that the allegation is false. In other words, the consumer is heard, and the burden of proof rests with the company. Feeble attempts have been made by the government to empower our citizens with this right, and we believe we have 10-15 years more to go on this route.

Expansion to Specific Consumer Rights In 1985, the concept of consumer rights was endorsed by the United Nations through the United Nations Guidelines for Consumer Protection, which expands them to included eight basic rights. These have also been restated as a charter of rights by the international NGO Consumers International,[2] recognising the following additional rights: The right to satisfaction of basic needs Consumers have the right to have access to basic essential goods and services, adequate food, clothing, shelter, health care, education and sanitation. Indeed these are things many of us take for granted but, believe it or not, in Malta there are consumers who do not have the satisfaction of basic needs. To have access to basic, essential goods and services: adequate food, clothing, shelter, health care, education, public utilities, water and sanitation. ]The right to redress To receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods or unsatisfactory services. The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers is defined as the right to redressal in the Consumer Protection Act 1986. The Indian Government has been slightly more successful with respect to this right. Consumer courts such as District Consumer Disputes Redressal Forums at the district level, State Consumer Disputes Redressal Commissions and National Consumer Disputes Redressal Commissions have been established through the consumer protection act. Each of these consumer grievance redressal agencies has fiduciary and geographical jurisdictions to address consumer cases between consumers and businesses. Consumer cases less than 20 lakhs are heard in the district consumer forum, between 20 lakhs and one crore are heard in the state consumer court and cases more than one crore are heard in the national consumer court. On paper these sound nice; but hold on before you rejoice. Once started as the guardians of consumer protection and consumer rights in India, these courts have today been rendered ineffective due to bureaucratic sabotages, callousness of the government, clogged cases and decadent infrastructure. Very few of the district forums have officials appointed in a timely manner, and most of them are nonoperational due to lack of funding and infrastructure. Estimates put the open legal cases in India at 20-30 million, which will approximately take 320 years to close. With the legal system in this manner compromised, consumer cases that form mere civil litigations will be pushed down the bottom of the priority list. We estimate that India is 10 years behind in effectively ensuring this right to every Indian consumer. The right to consumer education To acquire knowledge and skills needed to make informed, confident choices about goods and services, while being aware of basic consumer rights and responsibilities and how to act on them. The right of each Indian citizen to be educated on matters related to consumer protection and about his/her rights is the last right given by the Consumer Protection Act 1986. This right simply ensures that the consumers in India have access to informational

programs and materials that would enable them to make better purchasing decisions. Consumer education may mean both formal education through school and college curriculums and also consumer awareness campaigns run by both governmental and non governmental agencies (NGO). Consumer NGOs, with little support from the Indian government, primarily undertake the ardent task of ensuring this consumer right around the country. India is 20 years away from ensuring this right empowers the common citizen consumer. The right to a healthy environment To live and work in an environment which is non-threatening to the well-being of present and future generations. However, consumer protection can only truly exist in first world, industrialized, or developed nations due to the fiscal resources necessary to properly execute legal protection of consumer interests. In the Consumer Protection Act, 1986 of India, the following six consumer rights have been recognized.

Responsibilities of Consumers
There is a well known saying that there cannot be rights without responsibilities. Having examined the consumer rights and the purpose served by them, it is necessary to consider whether consumers should also be responsible enough to be entitled to exercise their rights. For instance, to be able to exercise their right to be heard, consumers should avail of the opportunities to know and keep informed about consumer problems. To exercise their right to seek redressal of complaints, consumers must take all precautions to choose the right goods at the right price and learn how to use the products to prevent injury or loss. Specifically, the responsibilities of consumers may include the followings: (i) Responsibility of self-help: It is always desirable that a consumer should not depend on the seller for information and choice as far as possible. As a consumer, you are expected to act in a responsible manner to protect yourself from being deceived. An informed consumer can always take care of his/her interest more than any one else. Also, it is always better to be forewarned and forearmed rather than getting remedies after suffering a loss or injury. (ii) Proof of Transactions: The second responsibility of every consumer is that the proof of purchase and documents relating to purchase of durable goods should be invariable obtained and preserved. For example, it is important to get a cash memo on purchase of goods You should remember that in case you have to make any complaint about defects in goods, the proof of purchase will enable you to establish your claim for repair or replacement of the goods. Similarly, durable consumer goods like TV, refrigerator, etc. carry warranty or guarantee cards issued by the dealers. The cards entitle you to get the service for repairs and replacement of parts free of cost during a certain period after purchase. (iii) Proper claim: Another responsibility that consumers are expected to bear in mind is that while making complaints and claiming compensation for loss or injury, they should not make

unreasonably large claims. Very often, consumers have to exercise their right to seek redressal in a court. There have been cases in which consumers claimed huge compensation for no apparent reason. This is regarded as an irresponsible act which should be avoided. (iv) Proper use of Product or Services: Some consumers, especially during the guarantee period, make rough use of the product, thinking that it will be replaced during the guarantee period. This is not fair on their part. They should always use the products properly. Besides the above responsibilities, consumers should be conscious of some other responsibilities. They should stick to the agreement made with manufacturers, traders and service providers. They should make timely payment in case of credit purchases. They should not tamper with the media of services, like electric and water meters, bus and train seats, etc. They should remember that they can exercise their rights only when they are willing to fulfil their responsibilities.

UNIT-II
Question -11. What are the measures for consumer protection in India? or Question- Highlight the consumer Rights as mentioned in Consumer protection Act. What are the provisions of these Consumer Rights in the Act.
June, 2010

Answer:
Consumers play a vital role in the economic system of a nation because in the absence of effective demand that emanates from them, the economy virtually collapses. Mahatma Gandhi said, "A consumer is the most important visitor on our premises. He is not dependent on us, we are on him. He is not an interruption to our work, he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving us opportunity to serve him. But, of late, unfortunately cheating by way of overcharging, black marketing, misleading advertisements, etc has become the common practice of greedy sellers

and manufacturers to make unreasonable profits. In this context, it is the duty of the government to confer some rights on consumers to safeguard their interests. Consumer Rights 1. Right to Safety: The right to be protected against goods which are hazardous to life and property. 2. Right to Information: The right to be informed about the quality, quantity, purity, price and standards of goods. 3. Right to Choose: The right to be assured access to a variety of products at competitive prices, without any pressure to impose a sale, i.e., freedom of choice. 4. Right to be Heard: The right to be heard and assured that consumer interests will receive due consideration at appropriate forums. 5. Right to Seek Redressal: The right to get relief against unfair trade practice or exploitation. 6. Right to Education: The right to be educated about rights of a consumer. Protection of Consumer Rights Consumer protection means safeguarding the rights and interests of consumers. It includes all the measures aimed at protecting the rights and interests of consumers. Consumers need protection due to the following reasons: 1. Illiteracy and Ignorance: Consumers in India are mostly illiterate and ignorant. They do not understand their rights. A system is required to protect them from unscrupulous businessmen. 2. Unorganised Consumers: In India consumers are widely dispersed and are not united. They are at the mercy of businessmen. On the other hand, producers and traders are organized and powerful. 3. Spurious Goods: There is increasing supply of duplicate products. It is very difficult for an ordinary consumer to distinguish between a genuine product and its imitation. It is necessary to protect consumers from such exploitation by ensuring compliance with prescribed norms of quality and safety.

4. Deceptive Advertising: Some businessmen give misleading information about quality, safety and utility of products. Consumers are misled by false advertisement and do not know the real quality of advertised goods. A mechanism is needed to prevent misleading advertisements. 5. Malpractices of Businessmen: Fraudulent, unethical and monopolistic trade practices on the part of businessmen lead to exploitation of consumers. Consumers often get defective, inferior and substandard goods and poor service. Certain measures are required to protect the consumers against such malpractices. 6. Freedom of Enterprise: Businessmen must ensure satisfaction of consumers. In the long run, survival and growth of business is not possible without the support and goodwill of consumers. If business does not protect consumers' interests, Government intervention and regulatory measures will grow to curb unfair trade practices. 7. Legitimacy for Existence: Business exists to satisfy the needs and desires of consumers. Goods are produced with the purpose of selling them. Goods will, in the long run, sell only when they meet the needs of consumers. 8. Trusteeship: Businessmen are trustees of the society's wealth. Therefore, they should use this wealth for the benefit of people.

Methods of Consumer Protection

There are four main methods of protecting the interests of consumers: 1. Business Self-regulation: The business community itself can help in achieving consumer protection and satisfaction through self -discipline. Businessmen can regulate their own behaviour and actions by adopting higher ethical standards. Trade associations and chambers of commerce can check unfair trade practices used by some businessmen. 2. Consumer Self-help: Every consumer must be alert as self-help is the best help. He should educate himself and know his rights. He should not allow unscrupulous businessmen to cheat him. 3. Consumers' Associations: Consumers should form voluntary associations. These associations can educate and awaken consumers. They can take organized action and put pressure on businessmen to adopt fair trade practices.

4. Government Regulations: The State can ensure consumer protection through legislative, executive and judicial actions. The laws enacted by the Government must be strictly enforced by the executive. Government of India has enacted several laws to protect the interests and rights of consumers. Some of these laws are as follows: The Essential Commodities Act, 1955 which aims to regulate and control the production, supply and distribution and prices of essential commodities. The Prevention of Food Adulteration Act, 1954 which aims to check adulteration in food items and eatables. The Drugs and Cosmetics Act, 1940 which seeks to ensure purity and quality in drugs and cosmetics. The Standards of Weights and Measures Act, 1956 which aims at ensuring that consumers get the right weight and measurement in products. The Household Electrical Appliances (Quality Control) Order, 1976 which seeks to ensure safety and quality in the manufacture of electrical appliances. The Consumer Protection Act, 1986 which seeks to provide speedy and inexpensive redressal to the grievances of consumers. THE CONSUMER PROTECTION ACT, 1986 The Act provides following remedies to an aggrieved consumer: Removal of defects in goods or deficiency in service. Replacement of defective goods with new goods of similar description which shall be free from any defect. Return of price paid by the consumer. Payment of compensation for any loss or injury suffered by the consumer. Discontinue the restrictive, or unfair trade practice, and not to repeat it. Withdraw the hazardous goods from being offered for sale and not to offer them for sale.

Provide for adequate cost to the aggrieved party.

The Consumer Production Act provides for a threetier system of redressal agencies: one at district level known as District Forum, second at state level known as 'State Commission', and third at national level known as 'National Commission'. A complaint is to be made to the district forum of the concerned district where the value of goods and services and compensation, if any, is up to Rs 20 lakhs, to the 'State Commission' between Rs 20 lakhs and Rs 100 lakhs, and to the National Commission for more than Rs 100 lakhs. Interestingly, there is provision for appeals against the orders of a particular redessal forum by the aggrieved party before the next higher echelon and even from the findings of the National Commission before the Supreme Court. Invariably, consumers are a vulnerable lot for exploitation, more so in a developing country with the prevalence of mass poverty and illiteracy. India too is no exception to it. Instances like overcharging, black marketing, adulteration, profiteering, lack of proper services in trains, telecommunication, water supply, airlines, etc are not uncommon here. From time to time, the government has attempted to safeguard consumer's interests through legislations and the CPA 1986 is considered as the most progressive statute for consumer protection. Procedural simplicity and speedy and inexpensive redressal of consumer grievances as contained in the CPA are really unique and have few parallels in the world. Implementation of the Act reveals that interests of consumers are better protected than ever before. However, consumer awareness through consumer education and actions by the government, consumer activists, and associations are needed the most to make consumer protection movement a success in the country.

Question-12. What are the basic provisions of Consumer Protection Act? Explain . Answer:
CONSUMER PROTECTION ACT 1986 ( CPA) IN INDIA The Consumer Protection Act 1986 is a social welfare legislation which was enacted as a result of widespread consumer protection movement. The main object of the legislature in the enactment of this act is to provide for the better protection of the interests of the consumer and to make provisions for establishment of consumer councils and other authorities for settlement of consumer disputes and matter therewith connected.

The Consumer Protection Act, 1986 was enacted for better protection of the interests of consumers. The provisions of the Act came into force with effect from 15-4-87. Consumer Protection Act imposes strict liability on a manufacturer, in case of supply of defective goods by him, and a service provider, in case of deficiency in rendering of its services. The term defect and deficiency, as held in a catena of cases, are to be couched in the widest horizon of there being any kind of fault, imperfection or shortcoming. Furthermore, the standard, which is required to be maintained, in services or goods is not to be restricted to the statutory mandate but shall extend to that claimed by the trader, expressly or impliedly, in any manner whatsoever. The salient features of the Act are: 1. it covers all the sectors whether private, public, and cooperative or any person. The provisions of the Act are compensatory as well as preventive and punitive in nature and the Act applies to all goods covered by sale of goods Act and services unless specifically exempted by the Central Government; 2. It enshrines the following rights of consumers: (a) right to be protected against the marketing of goods and services which are hazardous to life and property; (b) right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumers against unfair trade practices; (c) right to be assured, wherever possible, access to a variety of goods and services at competitive prices; (d) right to be heard and to be assured that consumers interests will receive due consideration at the appropriate forum; (e) right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and (f) right to consumer education; 3. The Act also envisages establishment of Consumer Protection Councils at the central, state and district levels, whose main objectives are to promote and protect the rights of consumers; 4.To provide a simple, speedy and inexpensive redressal of consumer grievances, the Act envisages a three-tier quasi-judicial machinery at the national, state and district levels. These are: National Consumer Disputes Redressal Commission known as National Commission, State Consumer Disputes Redressal Commissions known as State Commissions and District Consumer Disputes Redressal Forum known as District Forum; and 5. the provisions of this Act are in addition to and not in derogation of the provisions of any other law for the time being in force. Definition of Defect and consumer Under the CPA, Consumer Forums at the District, State and National level have been specifically constituted to adjudicate claims of consumers for any defect in goods. A defect

has been defined in Section 2(1) (f) of the Act as any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader (which includes the manufacturer) in any manner whatsoever in relation to any goods. It is important to mention herein that by virtue of Section 2 (1)(d) persons/entities who had purchased goods for commercial purpose (other than those persons who have purchased goods for using them to earn their livelihood by means of self employment) are excluded from the scope of CPA; they cannot institute proceedings under the CPA even if there is any defect in the goods purchased by them for using the goods for commercial purposes. Purview of a complaint According to the CPA, Complaint means any of the following allegations made in writing by a complainant1. any unfair trade practice or a restrictive trade practice has been adopted by a trader, 2. the goods hired or bought suffer from one or more defects 3. The goods hired or availed of are deficient in any respect 4. A trader has charged price in excess of price fixed by law or displayed on the goods or any package containing goods 5. Goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law requiring traders to display information in regard to the contents, manner and effect or use of such goods. Grant of Reliefs under Consumer Protection Act On arriving at a finding of defect in the goods according to Section 14 Consumer Protection Act, the jurisdictional Consumer Forum may direct one or more of the following: 1. To remove the defect; 2. To replace the goods with new goods of similar description which shall be free from any defect; 3. To return to the complainant the price; 4.To pay such amount as may be awarded as compensation to the consumer for the loss or injury suffered by the consumer due to the negligence of the opposite party; 5. To discontinue the unfair trade practice or the restrictive trade practice or not to repeat them; 6. To cease and desist manufacture of hazardous goods;

7. To pay such sums as orders if injury/loss is suffered by a large number of consumers not identifiable conveniently; 8.To issue corrective advertisement for neutralizing effect of misleading advertisement; 9.not to offer the hazardous goods for sale; 10. To withdraw the hazardous goods from being offered for sale; 11. To provide for adequate costs to parties (the Complainant). There exists no clear pronouncement of the Supreme Court (the apex court in India) till date on whether the liability under the Consumer Protection Act is strict or fault based. However, failure to conform to the standards required under any law, contract or representations of the trader are sufficient to constitute a defect. Furthermore, under Section 14 of the Consumer Protection Act as explained hereinabove, it is only the remedy of compensation that requires the claimant to necessarily prove negligence. In the case of Abhaya Kumar Panda v. Bajaj Auto [(1991) 2 CPJ 644], the Orissa State Commission directed repair of the goods, even though there was no intentional defect. Thus, the defence of no negligence may not be accepted by Consumer forums. Validity of Limitation of liability clauses Contractual liability has a role to play in product liability claims under the Consumer Protection Act. Courts in India have upheld limitation of liability clauses, which parties have specifically agreed to in the contract as recognized by the Supreme Court in Bharathi Knitting Company v DHL Worldwide Express Courier (1996) 4 SCC 704. However, such clauses may be struck down if found to be unconscionable in nature. In Maruti Udyog v. Susheel Kumar Gabgotra, [(2006) 4 SCC 644], the manufacturer of the vehicle had stipulated a warranty clause limiting its liability to merely repair the defects found if any. In view of this clause, the Supreme Court reversed the findings of the National Commission to replace the defective goods and held that the liability of the manufacture was confined to repairing the defect. Compensation was, however, awarded for travel charges to the complainant, which was incurred due to the fault of the car manufacturer. Applicability of other laws Section 3 of the Consumer Protection Act provides that the Act is in addition to and not in derogation of any other law. The Supreme Court in Secretary, Thirumurugan Co-operative Agricultural Credit Society v. M. Lalitha, [(2004) 1 SCC 305] has interpreted the above provision to mean that the remedies provided under the CP Act are in addition to the remedies provided under other statutes. Hence, the fact that a remedy is specifically provided for under another statute would not necessarily oust the jurisdiction of the appropriate authority under the Consumer Protection Act. It has been further held that if forums under one statute and the Consumer Protection Act are approached, then it is for the appropriate authority to permit the parties to opt between the consumer forum and the other forum, depending on the facts and circumstances of the case.

Establishment of Consumer forums At present, there are 34 State Commissions, one in each State/UT and 571 district fora besides the National Commission. The state governments are responsible to set up the district fora and the State Commissions. States have been empowered to establish additional District Forum and also additional members in the State Commission to facilitate constituting benches and also for holding circuit benches. The Central Government is empowered to establish the National Commission. It has been empowered to appoint additional members to facilitate creation of more benches and holding of circuit benches. The second bench of the National Commission started functioning from 24 September 2003. The government is monitoring the disposal of cases by the consumer courts through National Commission. As per the current statistics, since its inception and up to 5.9.2008 , 2559451 cases were filed out of which 2327035 cases were disposed of by the District forums in various states of India . Jurisdiction under Consumer Protection Act 1986 The District Forum has the jurisdiction to entertain complaints where the value of the goods or services and the compensation , if any, claimed, is less than INR 50,000. A State Commission has the jurisdiction to entertain complaints where the value of the goods or services and the compensation , if any, claimed exceeds 500,000 rupees but does not exceed 2 million rupees. It is also appellate forum for orders of the District forum. The National Commisssion has the jurisdiction to entertain complaints where the value of goods and services and the compensation exceeds two million rupees and also hears the appeals against the orders of the State Commission. Period of limitation A complaint is only admitted by any of the competent forums under Consumer Protection Act if it is filed within two years from the date on which the cause of action has arisen but it may be entertained after the said period after recording its reasons for condoning such delay , if the complainant satisfies that he had a sufficient cause for not filing the complaint within period of two years . Procedure to file a complaint A complaint can be filed in a District Forum or as per pecuniary jurisdiction in another forum within local limits of whose jurisdiction the opposite party or any of the opposite parties resides or carries on business, or has a branch office or personally works for gain. Class actions Under Consumer Protection Act Section 2 (1) (b) permits filing of a complaint by a consumer, any voluntary consumer association registered under companies Act 1956 or under any other law, the State government or Central Government, one or more consumers where number of

consumers have same interest, incase of death of a consumer , his legal representative may ,make a complaint. Penalty under Section 27 Consumer Protection Act According to Consumer Protection Act ,where a trader or the complainant fails to comply with an order made by the relevant consumer forum , such person is liable to a punishment with imprisonment for a term which is not less than one month but which may extend to three years or with fine of not less than two thousand rupees but which may extend to ten thousand rupees or with both.

Question- 13. What are the various Ways and means of Consumer Protection? Answer: WAYS AND MEANS OF CONSUMER PROTECTION
We have enumerated several instances of exploitations and malpractices on the part of manufacturers, traders, dealers and services providers. Now the question arises as to how can these be eliminated. Actually it is very difficult to stop such exploitation by any consumer single handedly. The consumers have to collectively act against such malpractices and take the help of consumer organisations and the government agencies. In fact, consumer protection essentially needs consumer awareness, education and guidance, and it cannot be assured by voluntary business conduct or self-regulation. The following are the various ways and means of consumer protection followed in India. 1. Lok Adalat Lok Adalats are the effective and economical system for quick redressal of the public grievances. The aggrieved party can directly approach the adalats with his grievance, and his issues are discussed on the spot and decisions are taken immediately. The consumers may take the advantage of this system to solve their problems. Cases of electricity billing, telephone billings, road accidents etc. can be taken up in Lok Adalat for spot settlement. Infact, Indian Railways, Mahanagar Telephone Nigam Limited and Delhi Vidyut Board hold Lok Adalat regularly to settle users grievances on the spot. 2. Public Interest Litigation Public Interest Litigation (PIL) is a scheme under which any person can move to the court of law in the interest of the society. It involves efforts to provide legal remedy to un-represented groups and interests. Such groups may consist of consumers, minorities, poor persons, environmentalists and others. Any person or organisation, though not a party to the grievances, can approach the court for remedial action in case of any social atrocities.

3. Redressal Forums and Consumer Protection Councils Under the Consumer Protection Act 1986, a judicial system has been set up to deal with the consumer grievances and disputes at district level, state level and national level. These are known as District Forum, State Consumer Disputes Redressal Commission (State Commission) and National Consumer Disputes Redressal Commission (National Commission). Any individual consumer or association of consumers can lodge a complaint with the District, State or National level forum, depending on the value goods and claim for compensation. The main objective of these forums is to provide for a simple, speedy and inexpensive redressal of consumers grievances. The Act as amended in 2002 also provides for setting up of Consumer Protection Council at district, state and national level for promotion and protection of the rights of the consumers as laid down in Section 6 of the Act. The councils are required to give wide publicity to the rights of consumers, the procedures for filling complaints by them and provide inputs to consumer movement in the country. 4. Awareness Programme To increase the level of awareness among the consumers the Government of India has initiated various publicity measures. It regularly brings out journals, brochures, booklets and various posters depicting the rights and responsibilities of consumers, redressal machineries etc. It observes World Consumer Rights Day on 15 March and National Consumer Day on 24 December. Several video programmes on consumer awareness are broadcasted through different television channels. Similarly, audio programmes are also broadcasted through All India Radio and FM channels. The poster and slogan competition on consumer protection are also organised at various level. To encourage the participation of public in the field of consumer protection the Government has also instituted National Awards to the persons who have done outstanding work in this field. 5. Consumer Organisations Consumer organisations have been active all over the world to promote and protect consumer interests. A number of such organisations have also been set up in recent years in different parts of India. It is felt that neither it is possible to discipline all members of the business community through moral sanctions and a code of fair business practices nor can administrate orders and legislative provisions to ensure consumer protection without the active involvement of consumer associations. Now with an increasing number of consumer organisations involved in consumer protection, the consumer movement is getting a foothold in India and helping individuals to seek quick and adequate redressal of their grievances. Look at the box for some of such consumer organisations. Significant Consumer Organisations in India Some of the important Consumer Organisations that have been playing an active role in taking up consumer cause are: a. CERC (Consumer Education and Research Centre), Ahmedabad

b. VOICE (Voluntary Organisation in the Interest of Consumer Education), New Delhi c. CGSI (Consumer Guidance Society of India), Mumbai d. CAG (Consumer Action Group), Chennai e. CUTS (Consumer Unity and Trust Society), Jaipur f. Common Cause, New Delhi g. Consumer Education Centre, Hyderabad h. Karnataka Consumer Service Society, Bangalore i. Kerela State Consumers Coordination Committee, Cochin These organisations are collecting data on different products and testing them, investigating into the problems of consumers, publishing and distributing brochures and journals, organising consumer awareness programmes, filing complaints, suits and writ petitions on behalf of the consumers, etc. 6. Consumer Welfare Fund The government has created a consumer welfare fund for providing financial assistance to strengthen the voluntary consumer movement in the country particularly in rural areas. This fund is mainly used for setting up facilities for training and research in consumer education, complaint handling, counseling and guidance mechanisms, product testing labs, and so on. 7. Legislative Measures A number of laws have been enacted in India to safeguard the interest of consumers and protect them from unscrupulous and unethical practices of the businessmen. Some of these Acts are as follows: a. Drug Control Act, 1950 b. Agricultural Products (Grading and Marketing) Act, 1937 c. Industries (Development and Regulation) Act, 1951 d. Prevention of Food Adulteration Act, 1954 e. Essential Commodities Act, 1955 f. The Standards of Weights and Measures Act, 1956 g. Monopolies and Restrictive Trade Practices Act, 1969 h. Prevention of Black-marketing and Maintenance of Essential Supplies Act, 1980 i. Bureau of Indian Standards Act, 1986

The object and interest of almost all these enactments are mainly punitive, though some of these are also preventive in nature. However, none of these laws provide any direct relief to

the consumers. Hence, amendments have been made in some of these laws by which individual consumers and consumer organisations have been conferred the right to take initiative and launch legal proceedings in civil and criminal courts against the violators. Another legal enactment that made a dent in this situation was the Monopolies and Restrictive Trade Practices Act, 1969. It gained the status of a specific consumer protection law with amendments made in 1984. Inspite of the changes made in 1984, a need was felt to have a more elaborate legislation. So the Consumer Protection Act was passed in 1986 to offer the necessary protection to consumers and provide an elaborate mechanism to deal with consumer grievances and disputes.

Question-14. What is the Organizational setup for consumer Protection under Consumer Protection Act? Answer:
CONSUMER PROTECTION COUNCIL AND DISTRICTCONSUMER FORUM The central government is empowered to constitute the Central Consumer Protection Council which consists of the following 150 members, viz. 1. The Minister in-charge of Department of Civil Supplies who shall be the chairman of the Central Council; 2. The Minister of State (where he is not holding independent charge) or Deputy Minister in the Department of Civil Supplies who shall be the vice-chairman of the Central Council; 3. The Minister of Food and Civil Supplies of Minister in-charge of consumer affairs in states; 4. Eight members of Parliament, five from the Lok Sabha and three from the Rajya Sabha; 5. The Commissioner from scheduled castes and scheduled tribes; 6. Representatives of the Central Government Department, autonomous organization concerned with consumer interest not exceeding twenty; 7. Representatives of the consumer organisations or consumers, not less than thirtyfive; 8. Representatives of women, not less than ten; 9. Representatives of farmers, trade and industries, not exceeding twenty; 10. Persons capable of representing consumer interest not specified above, not exceeding fifteen, and 11. The Secretary in the Department of Civil Supplies shall be the member secretary of the Central Council. The term of the council shall be three years. The council may meet as and when necessary, but not less than three meetings of the council shall be held every year. Each meeting of the council shall be called by giving not less than 10 days notices in writing to every member, specifying the time, place and agenda of the meeting. However, no proceedings of the councils shall be invalid merely by reasons of existence of any vacancy in or defect in the constitution of the council. The council is empowered to constitute from amongst its members, such working groups as it may deem necessary. Every working group so constituted shall perform such functions as are assigned to it by the central council. It seems that such working groups may prove to be more useful and effective in dealing with the specific problems allocated to them.

The findings of such working groups are required to be placed before the council for its consideration. The resolutions by the council shall be recommendation in nature. Objectives of the Central Council: The COPRA, 1986 provides that the objectives of the Central Council shall be to promote and protect the rights of the consumers, such as: (a) The right to be protected against marketing of goods which are hazardous to life and property; (b) The right to be informed about the quality, quantity, potency, purity, standard and prices of goods so as to protect the consumer against unfair trade practices; (c) The right to be assured, wherever possible, access to a variety of goods at competitive prices; (d) The right to be heard and to be assured that consumer interests will receive due consideration at appropriate fora; (e) The right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and (f) The right to consumer education. The central council may have a significant role in the formulation of the Central Governments Economic Policy. In addition, it may respond to request for information and advice on particular issues relating to the protection of consumers. Though the decisions of the council are recommendation, they have a significant impact on several authorities concerned with the matters of consumer protection. State Consumer Protection Councils: The state governments are also empowered to establish Consumer Protection Councils for their respective states. The State Councils shall consist of such members as may be notified by the state governments by notification from time to time. The objectives of every State Council (like Central Council) shall be to promote and protect within the state, the rights of the consumers as laid down in its clauses (a to b) of Section 6. So far, 22 states and Union Territories have set up the consumer Protection Councils under the Act. How far these councils have been successful in protecting the consumer interest is not tree from doubt. District Forum A Consumer Disputes Redressal Forum to be known as the District Forum is required to be established by the state government with the prior approval of the central government in each district of the state. i) Composition of the District Forum: The Act provides that each district forum shall consist of a president, who is required to be a qualified district Judge nominated by the state government. It shall consist of two members; among them, one should be a .woman social worker. The members may hold the office for a period of five years or up to the age of 65 years whichever is earlier and they are not eligible for re-appointment. Vacancy occurred by members the state government may fill resignation and it has entire authority about deciding salary or honorarium to be paid to the members. ii) Jurisdiction of the District Forum: District Forum has the jurisdiction to entertain the complaints where the value of the goods or services or compensation claimed is less than Rs.5,00,000 (earlier it was Rs.1,00,000). It can take complaints where opposite party/parties reside/s or carries on business in the district and the cause of action, wholly or in part, arises. iii) Procedure to be followed by the District Forum: Section 13 of the COPRA, 1986 lays down the procedure to be followed for the settlement of consumer dispute by the District

Forum. After receiving a complaint from the complainant, it refers a copy of the complaint to the opposite party directing him to give his version within 30 days or such extended period not exceeding 15 days. If the opposite party 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, then the forum shall take the following if the complaint relates to goods. If complaint alleges a defect in the goods which cannot be determined by proper analysis, then the District Forum shall take a sample and send it to a laboratory with prescribed fee (from the complainant) and then it has to send a copy of the laboratory report to the opposite party of the complainant disputes with the correctness of report of the laboratory, then they may submit in writing their objections and then the District Forum gives a reasonable opportunity to the parties of being heard and issue an appropriate order. If the complaint relates to service and 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 Forum, the Forum shall proceed to settle the consumer dispute on the basis of: (i) Evidence brought to its notice by the complainant and the opposite party denies or disputes the allegations contained in the complaint, or (ii) 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. If the District Forum is satisfied that the goods complained against any of the defects specified in the complaint or 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 take one or more of the following things: (i) to remove the defect pointed out by the appropriate laboratory from the goods in question; (ii) to replace the goods with new goods of similar description which shall be free from any defect; (iii) to return to the complainant the price, or as the case may be the charges paid by the complainant; and (iv) to 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. The person (whether complainant or opposite party) dissatisfied with the order made by the District Forum may prefer an appeal against such order to the State commission within a period of 30 days from the date of order. STATE COMMISSION FOR CONSUMER PROTECTION The state commission is the consumer disputes redressal agency at the state level which is established by the state government with the prior approval of the central government. It consists of a president who is or has been a Judge of a High Court and two members one of them is a woman. i) Jurisdiction of the State Commission: The State Commission can entertain the complaints where the value of the goods and compensation if any, claimed exceeds Rs.5,00,000 but does not exceed Rs.20,00,000 (earlier it was Rs.1,00,000 and Rs.10,000,000 respectively). It can entertain appeals against the orders of any District Forum within the state and it can call for the records and pass appropriate order in any consumer dispute which is pending before or

has been decided by any District Forum within the state, where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by Law or has failed to exercise a jurisdiction legally or with material irregularity. Hence, the jurisdiction of the State Commission is original as well as appellate. ii) Procedure: While disposing of the complaints, State Commission have to follow the Sections 12,13 and 14 and the rules made hereunder with such modifications as may necessarily be applicable to it. The Rule 10 of the Consumer Protection Act as are vested to the District Forum regarding the production documents, search and seizure. It may, however, be noted that the State Governments have yet to make their own rules in exercise of their powers under Section 30 (2) of the, Act. It is submitted that the State Government may adopt the similar rules as laid down by the central government, viz., Consumer Protection Rules, 1987. It will help in maintaining uniformity in Law all over the country. Appeal against the Orders of the State Commission: Section 19 of the Act provides that the person aggrieved by an order made by the State Commission on a complaint may prefer an appeal against such order to the National Commission within a period of 30 days from the date of the order. The National Commission may entertain an appeal after the expiry of the said period of 30 days if it is within that period. It may be noted that an order made by the State Commission on an appeal against the orders of the District forum is not appealable to the National Commission. Thus, provision exists only for a single appeal to the State Commission, from the order of the State Commission to the National Commission. NATIONAL COMMISSION FOR CONSUMER PROTECTION This is the highest authority to settle the consumer disputes under the Act. It is an independent statutory body. i) Composition of the National Commission: The National Commission shall consist of a president appointed by the central government who is or has been a Judge of Supreme Court and four other members who are eminent in any field of knowledge - one of whom should be a woman. However, no sitting judge of the Supreme Court shall be appointed under the previously mentioned provisions except after consultation with the Chief Justice of India. The COPRA and the Rules have laid down many provisions to rescue the independence of National Commission. The terms and conditions of the service to the president and the members should be varied to their disadvantage. ii) Jurisdiction of the National Commission: Jurisdiction of National Commission is original as well as appellate. The original jurisdiction is limited to the complaints where the value of the goods or service and compensation exceeds Rs.20,00,000 (earlier, it was Rs.10,00,000). The appellate jurisdiction is confined to appeal against the orders of any State Commission. Further, the commission is empowered to call for records and pass appropriate orders in any consumer dispute where it appears that the State Commission has acted illegally or with material irregularity or exceeded its jurisdiction or has exercised its jurisdiction. iii) Procedure: The procedure to be followed in dealing With the complaints is specified by Section 22 of the COPRA, which is similar to the powers of a civil court. It may also follow the procedure, which is prescribed by the central government. Accordingly, the procedure has

been laid down in the Rule 14 of the consumer Protection Rules. These rules provide that a complaint containing the following particulars should be presented by the complainant in person or by his agent to the National Commission or be sent by registered post to the Commission: (a) the name, description and address of the complainant; (b) the name, description and address of the opposite party or parties; (c) the facts relating to the complaint and when and where it arose; (d) documents in support of the allegations contained in the complaint, and (e) the relief which the complainant claims. On receipt of a complaint, the National Commission has to follow the same procedure as is to be followed by the District Forum under Section 13 of the Act. The procedure to be followed by the National Commission for hearing the appeal has been prescribed in Rule 15. Accordingly, a memorandum should be presented by the appellant or his agent to the National Commission in person or by post addressed to the commission. The memorandum must be set forth on the grounds of appeal without any arguments or narrative and must be accompanied by a certified copy of the order of the State Commission appealed against and such of the documents as may be received to support grounds of objection mentioned in the memorandum. However, under Section 19 of the Act, the appeal is to be preferred within a period of 30 days from the date of the order of the State Commission. When such an appeal is presented after the expiry of the period of limitation, the memorandum must also be accompanied by an application supported by an affidavit setting forth the facts on which the appellant relies to satisfy the National Commission that he has sufficient cause for not preferring the appeal within the period of limitation. It is obligatory for the parties or agents to appear before National Commission on the date of hearing or any other day to which hearing may be adjourned. If the appellant/respondent or his agent fails to appear on such date, the commission may in its discretion either dismiss the appeal or decide expert on merit. iv) Appeal against the order of the National Commission: A person dissatisfied with the order made by the National Commission may prefer an appeal against such order to the Supreme Court within a period of 30 days from the date of the order made by the National Commission and on an appeal preferred from the orders of the State commission shall be final and no further appeal against such orders should be preferred to the Supreme Court. Filling of Complaints and Model Forms: Whoever wants to lodge a complaint either in the District Forum or State Commission or National Commission should use a form specifically meant for fil1ing complaints in respective redressal agencies. They general1y consist of name and addresses of both complainant(s) and the opposite party(ies), facts relating to the complaint, the value of the compensation claimed, and a declaration.

Question -15. Explain the procedure of filing a complaint under Consumer Protection Act. Or Question- Discuss in detail the grounds and procedure of filing a consumer complaint in national consumer forum. June,2010 Answer:

Complaint Complaint may be defined as an allegation in writing made by the person, or any organization who is dissatisfied with the product sold or services rendered and who is complainant. Complaint may be one of the following: 1. Any unfair trade practice or restrictive trade practice has been adopted by any trader. 2. The goods bought or agreed to be bought suffer from one or more defects. 3. Services hired /availed or agreed to be hired or availed suffer from deficiencies in any respect. 4. That a trader has charged for the goods or services mentioned in the complaint, a price in excess of the stipulated price. (i) fixed by or under any law for the time being in force; or (ii) displayed on goods; or (iii) displayed on any package containing such goods 5. That goods or services which are hazardous to life and safety of the public are being offered to the public. The definitions of goods, services and deficiencies are very clearly given in the Consumer Protection Act. Complainant Complainant means the person or the organization who is filing a complaint. Complainant is very significant in consumer protection process. A complainant may be any of the following 1. A Consumer; 2. Any Voluntary Consumer Association; 3. The Central Government; 4. The State Governments or Union Territory Administration; 5. One or more consumers, where there are numerous consumers having the same interest and 6. In case of death of a consumer, his legal heir or representative. Who can file a Complaint? A complaint can be filed by any complainant who is The definition of consumer is wide but only a consumer to whom goods are sold or delivered or agreed to be sold or delivered or such services provided or agreed to be provided can file complaint. The definition as provided under Sec. 2(1) (b) is different from list of persons who can file complaint. The legal heirs or representatives of the deceased have been included in definition of complainant by 2002 amendment but have not been specified in Sec. 12(1) as person who can file complaint, which, creates a doubt that he can not file and can only continue as a complainant after the death of the complainant. Purview of a Complaint

According to the Consumer Protection Act, Complaint means any of the following allegations made in writing by a complainant1. 2. 3. 4. Any unfair trade practice or a restrictive trade practice has been adopted by a trader, The goods hired or bought suffer from one or more defects The goods hired or availed of are deficient in any respect A trader has charged price in excess of price fixed by law or displayed on the goods or any package containing goods 5. Goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law requiring traders to display information in regard to the contents, manner and effect or use of such goods. A Complaint must contain the following information The name, description and address of the complainant; The name, description and address of the opposite party or parties; The facts relating the complaint and when and where it arose; Documents if any in support of allegations and The relief which the complainant is seeking. The complaint should be signed by the Complainant or his or her authorised agent. Consumers can make, complaints against :A. B. C. D. E. Any unfair trade practice or restrictive trade practice adopted by the trader. Defective goods. Deficiency in service. Excess price charged by the trader. Unlawful goods sale which is hazardous to life and safety when used.

Where to file a complaint The Consumer Protection Act has provided for a three tier system popularly known as "Consumer Courts" :A. District Forum: For claims up to Rs.20 lakhs. B. State Commission: For claims above Rs.20 lakhs but less than Rs.1 crore. C. National Commission: For claims above Rs. 1 crore. The nature of complaint must be clearly mentioned as well as the relief sought by the consumer. It must be filed in quadruplicate in District Forum or State Commission (as the case may be) if there is only one opposite party. Otherwise, additional copies are required to be filed. Generally complaint should be decided within 90 days from the date of notice issued to the opposite party. Where a sample of any goods is required to be tested, a complaint is required to be disposed off within 150 days.

Procedure of Filing a Complaint

Procedure for filing complaints before a District Forum: A complaint can be filed in a District Forum or as per pecuniary jurisdiction in another forum within local limits of whose jurisdiction the opposite party or any of the opposite parties resides or carries on business, or has a branch office or personally works for gain. A complaint can be filed by a complainant on a plain paper in relation to any goods sold or delivered, or agreed to be sold or delivered, or any services provided or agreed to be provided by1.The consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided. 2.Any voluntary consumer association registered under the Companies Act 1956, or under any other Law for the time being in force.; 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. Along with the complaint, the complainant is required to file copies of supporting documents, i.e., cash memo, receipts, agreements, etc. The complainant is required to file 4 copies of the complaint, together with enclosures, for official purpose plus the number of Opposite Parties - i.e. in case the number of Opposite Parties is two, in that event the complainant is required to file 6 copies of the complaint, together with annexures, in the District Forum. The complaint, in the manner stated above, can be filed in the office of the District Forum, having territorial and pecuniary jurisdiction to entertain the same, during office hours. Necessary instructions have been issued to all the District Forums to issue an official receipt, showing the date of filing the complaint by the complainant. This is absolutely essential because in terms of Section 24A of the Consumer Protection Act, 1986, limitation for filing complaint has been prescribed. Procedure for filing complaint before concerned District Consumer Disputes Redressal Forum under section 12 of the Consumer Protection Act.1986 and the Rules made there under together with the fee prescribed in this behalf, in brief is as under 1. The complaint should be in quadruplicate along with relevant documents.

2. The complaint should be filed along with fee in the form of demand draft according to the amount of compensation claimed in favour of President District Consumer Forum.

3. I) ii) iii) iv) v) vi) 4.

Fees prescribed Upto Rs.1,00,000/- Postal Order No. or Demand Draft for Rs.100/Above Rs.1,00,000/- to Rs.5,00,000/- Rs.200/Above Rs.5,00,000/- to Rs.10,00,000/- Rs.400/Above Rs.10,00,000/- to Rs.20,00,000/- Rs.500/Above Rs.20,00,000/- to Rs.50,00,000/- - Rs.2000/Above Rs.50,00,000/- to Rs. 1 crore Rs.4000/The complaint should be sent through somebody else or be filed personally.

Procedure for filing Complaints and Appeals before the State Commission, In terms of the provisions contained in the Consumer Protection Act, 1986, complaints where the value of goods or services and compensation, if any, claimed exceeds Rs. Twenty Lacs but does not exceed Rs. One crore, can be filed straightaway in the State Commission. In terms of the provisions contained in Section 15 of the Consumer Protection Act, 1986, it has been provided that any person aggrieved by an order passed by the District Forum may prefer an appeal against such order to the State Commission within 30 days from the date of the order. Procedure for filing complaints: Same as in the case of District Forum, excepting that the complaints can be filed at the Filing Counter of the State Commission on every working day from 10.30 a.m. to 1.30 p.m. Procedure for filing appeals: Rule 8, sub-rule (1) to sub-rule (5) of the Delhi Consumer Protection Rules, 1987 deal with the procedure of filing appeals, and the same is reproduced below for the benefit of the general public:(1) Memorandum shall be presented by the appellant or his authorised agent to the State Commission in person or sent by registered post addressed to the Commission. (2) Every memorandum filed under sub-rule (1) shall be in legible handwriting preferably typed and shall set forth concisely under district heads, the grounds of appeal without any argument or narrative and such grounds shall be numbered consecutively.

(3) Each memorandum shall be accompanied by the certified copy of the order of the District Forum appealed against and such of the documents, as many be required to support grounds mentioned in the memorandum. (4) When the appeal is presented after the expiry of period of limitation as specified in the Act, memorandum shall be accompanied by an application supported by an affidavit setting forth the act on which appellant relies to satisfy the Commission that he has sufficient cause for not preferring the appeal within the period of limitation. (5) The appellant shall submit four copies of the memorandum to the State Commission for official purposes. As in the case of complaints, any person desirous of filing an appeal can file such appeal at the Filing Counter in the Registry of the State Commission on all the working days from 10.30 a.m. To 1.30 p.m. In the case of appeals also, it is necessary for the person filing the appeal to have an acknowledgement indicating the date of filing the appeal, because in terms of the provisions contained in the Act, the period of limitation has been prescribed for filing an appeal also. In the case of appeals, the statutory deposit i.e. fifty percent of the awarded amount or Rs.25,000/-, whichever is less, should be deposited in the shape of Fixed Deposit Receipt, from any nationalized bank for the period of one year or as the case may be, in favour of Registrar, State Commission, Delhi. Period of limitation A complaint is only admitted by any of the competent forums under Consumer Protection Act if it is filed within two years from the date on which the cause of action has arisen but it may be entertained after the said period after recording its reasons for condoning such delay , if the complainant satisfies that he had a sufficient cause for not filing the complaint within period of two years . Class actions Under Consumer Protection Act Section 2 (1) (b) permits filing of a complaint by a consumer, any voluntary consumer association registered under companies Act 1956 or under any other law, the State government or Central Government, one or more consumers where number of consumers have same interest, incase of death of a consumer , his legal representative may ,make a complaint. Penalty under Section 27 CPA According to Consumer Protection Act ,where a trader or the complainant fails to comply with an order made by the relevant consumer forum , such person is liable to a punishment with imprisonment for a term which is not less than one month but which may extend to three years or with fine of not less than two thousand rupees but which may extend to ten thousand rupees or with both.

Question 16. Explain about the Relief Available under Consumer Protection. Or Question what do you mean by Relief available to a grieved Consumer? How does it coordinates the Consumer Protection Act. June, 2010 Answer:
Grant of Reliefs under Consumer Protection Act On arriving at a finding of defect in the goods according to Section 14 Consumer Protection Act, the jurisdictional Consumer Forum may direct one or more of the following: 1.To remove the defect. 2.To replace the goods with new goods of similar description which shall be free from any defect. 3.To return to the complainant the price. 4.To pay such amount as may be awarded as compensation to the consumer for the loss or injury suffered by the consumer due to the negligence of the opposite party. 5.To discontinue the unfair trade practice or the restrictive trade practice or not to repeat them. 6.To cease and desist manufacture of hazardous goods. 7.To pay such sums as orders if injury/loss is suffered by a large number of consumers not identifiable conveniently. 8.To issue corrective advertisement for neutralizing effect of misleading advertisement. 9.Not to offer the hazardous goods for sale. 10.To withdraw the hazardous goods from being offered for sale. 11.To provide for adequate costs to parties (the Complainant). There exists no clear pronouncement of the Supreme Court (the apex court in India) till date on whether the liability under the CPA is strict or fault based. However, failure to conform to the standards required under any law, contract or representations of the trader are sufficient to constitute a defect. Furthermore, under Section 14 of the CPA as explained hereinabove, it is

only the remedy of compensation that requires the claimant to necessarily prove negligence. In the case of Abhaya Kumar Panda v. Bajaj Auto [(1991) 2 CPJ 644], the Orissa State Commission directed repair of the goods, even though there was no intentional defect. Thus, the defence of no negligence may not be accepted by Consumer forums.

Relief available against complaint [Sections 14 and 22] - A complainant can seek any one or more of the following relief under the Act: CONSUMER PROTECTION ACT Para 1.3 (a) to remove the defect pointed out by the appropriate laboratory from the goods in question; (b) to replace the goods with new goods of similar description which shall be free from any defect; (c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant; (d) to 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; (e) to remove the defects or deficiencies in the services in question; (f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat it; (g) not to offer the hazardous goods for sale; (h) to withdraw the hazardous goods from being offered for sale; (i) to provide from adequate costs to complainant. When a complaint cannot be filed A complaint on behalf of the public which consists of unidentifiable consumers cannot be filed under the Act. Example : A complaint was filed on the basis of a newspaper report that passengers travelling by flight No. 1C-401 from Calcutta to Delhi on May 13, 1989 were made to stay at the airport and the flight was delayed by 90 minutes causing great inconvenience to the passengers. It was held that such a general complaint cannot be entertained. No passenger who boarded that plane came forward or authorised the complainant to make the complaint - Consumer Education and Research Society, Ahmedabad v. Indian Airlines Corporation, New Delhi (1992) 1 CPJ 38 NC. A complaint by an individual on behalf of general public is not permitted - Commissioner of Transport v. Y.R. Grover 1994 (1) CPJ 199 NC. An unregistered association cannot file a complaint under the Act. Example : The complainant was an association formed in the Gulf and was unregistered in India. It was held that since the petitioner was not a voluntary organization registered under any law in force in India, cannot come within clause (d) of section 2(1) of the Act and hence cant file a complaint - Gulf Trivendrum air Fare Forum v. Chairman & Managing Director, Air India 1991 (2) CPR 129. A complaint after expiry of limitation period is not permitted. A complaint cannot be filed after the lapse of two years from the date on which the cause of action arise unless the Forum is satisfied about the genuineness of the reason for not filing complaint within the prescribed time.

Example : A supplied defective machinery to B on 12-1-1998. B filed a suit against A on 10-3-2001. It was not admitted before the Forum for the reason that the time available to make complaint lapsed. Dismissal of frivolous and vexatious complaints Since the Act provides for an inexpensive procedure (Court fees is not charged in consumer.

UNIT III
Question-18. What do you understand by MRTP Act? What are the specific provisions of this act relating to consumer protection? Or Question- Highlight Various unfair Restricted Trade Practices as mentioned in MRTP Act. What are the remedies against these Practices? June, 2010 Answer:
Monopolies and Restricted Trade Practices Act The Monopolies and Restrictive Trade Practices Act, 1969, aims to prevent concentration of economic power to the common detriment, provide for control of monopolies and probation of monopolistic, restrictive and unfair trade practice, and protect consumer interest. Monopolistic trade practice is that which represents abuse of market power in the production and marketing of goods and services by eliminating potential competitors from market and taking advantage of the control over the market by charging unreasonably high prices, preventing or reducing competition, limiting technical development, deteriorating product quality or by adopting unfair or deceptive trade practices. Post independence, many new and big firms have entered the Indian market. They had little competition and they were trying to monopolize the market. The Government of India understood the intentions of such firms. In order to safeguard the rights of consumers, Government of India passed the MRTP bill. The bill was passed and the Monopolies and Restrictive Trade Practices Act, 1969, came into existence. Through this law, the MRTP commission has the power to stop all businesses that create barrier for the scope of competition in Indian economy.

The MRTP Act, 1969, aims at preventing economic power concentration in order to avoid damage. The act also provides for probation of monopolistic, unfair and restrictive trade practices. The law controls the monopolies and protects consumer interest. Monopolistic Trade Practice Monopolistic trade practice is that which represents abuse of market power in the production and marketing of goods and services by eliminating potential competitors from market and taking advantage of the control over the market by charging unreasonably high prices, preventing or reducing competition, limiting technical development, deteriorating product quality or by adopting unfair or deceptive trade practices. Such practice indicates misuse of one's power to abuse the market in terms of production and sales of goods and services. Firms involved in monopolistictrade practice tries to eliminate competition from the market. Then they take advantage of their monopoly and charge unreasonably high prices. They also deteriorate the product quality, limit technical development, prevent competition and adopt unfair trade practices. Unfair Trade Practices The expression 'unfair trade practice' is one which is elaborately defined in the Consumer Protection Act and the Monopolies and Restrictive Trade Practices Act. However, much of the litigation in both forums centres around it. When the MRTP Commission fades away, this phrase will remain only in the consumer law. The Competition Act, which is yet to be implemented in full, does not deal with UTP directly. Despite the detailed definition, it divided two judges of the Supreme Court in a recent appeal against a judgment on the MRTP commission. In another decision, the commission itself confused UTP with 'deficiency in service.' First, the differences in the Supreme Court over the applicability of the definition. In Philips Medical Systems (Cleveland) Inc vs Indian MRI Diagnostic & Research Ltd, the Indian firm ordered a whole body CT scanner from the manufacturer in the US. The US corporation required licences from the respective governments which did not come in time. Therefore the offer lapsed and the deal fell through. Fresh negotiations began between the firms, but it was apparently for a refurbished machine at a higher price. Following differences, the Indian firm called off the talks and imported a similar scanner from Japan . The Indian firm also moved the commission alleging 'restrictive trade practice' by the US firm pleading losses and seeking compensation. The commission held the US firm guilty of both unfair and restrictive trade practices and awarded compensation. Therefore, the US firm appealed to the Supreme Court where it succeeded in setting aside the commission's order.

Though both the judges in the Supreme Court agreed on quashing the commission's order, they could not agree on the interpretation of the UTP. How can there be a UTP when there was no supply of goods at all, one judge asked. The original MRTP Act did not contain the phrase UTP. The law was aimed against restrictive and monopolistic practices only. The assumption was that if the manufacturers, producers or dealers could be prevented from distorting competition, the consumer would automatically get a fair deal. This was not to be. Therefore, the concept of UTP was introduced in 1984 through an amendment. According to this judge, the amendment was meant to protect consumers against false and misleading ads and defective goods, among other things. It was not meant to deal with a situation where goods are not sold at all, as in this case. The definition of UTP was further amended in 1991, but still this sort of situation was not covered by the change. The other judge felt that the phrase should be liberally interpreted. He said: 'There may be situations where a promise to supply a particular good, which the supplier knew that he was in no position to supply, with a motive of promoting of some other model, could occur. In such a case, a customer may be forced to obtain the same material from some other party and suffer losses in the process. Even without actual sale of goods, such an act on the part of the supplier could also amount to UTP.' Normally such differences in the Supreme Court are resolved by referring them to a larger bench, but in this case the disagreement was left as it is, perhaps because the commission itself is on its last legs. However, since the definition of UTP in the Consumer Protection Act is identical to that of the MRTP Act, the problem is bound to be brought back to the Supreme Court soon by consumer activists and lawyers. The Competition Act does not define UTP itself, but only 'trade practice.' Moreover, the proposed Competition Commission is enjoined to carry on with part of the cases pending before the MRTP commission. The commission set up under it also has the duty to 'eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants.' Therefore, there should be more clarity in the interpretation of UTP. The confusion now prevailing can be gauged from another judgment of the MRTP commission in the judgment, KLM Royal Dutch Airlines vs Director General, delivered last month. Some consignments of badges and crests sent for a tournament in New Orleans, US, did not reach before the event, raising a claim for damages for 'deficiency in service.' Bases for unfair Trade Practices

The following may result in an unfair trade practice:

False representation and misleading advertisement of goods and services. Falsely representing second-hand goods as new. Misleading representation regarding usefulness, need, quality, standard, style etc of goods and services. False claims or representation regarding price of goods and services. Giving false facts regarding sponsorship, affiliation etc. of goods and services. Giving false guarantee or warranty on goods and services without adequate tests. Misleading advertisement and False Representation Falsely representing that goods and services are of a particular standard, quality, grade, composition or style. Falsely representing any second hand renovated or old goods as new. Representing that goods or services, seller or supplier have a sponsorship, approval or affiliation which they do not have. Making a false or misleading representation concerning need for, or usefulness of goods or services. Giving to public any warranty, guarantee of performance that is not based on an adequate test or making to public a representation which purports to be such a guarantee or warranty. False and misleading claims with respect to the price of goods or services. Giving false or misleading facts disparaging the goods, services or trade of another person or concern.

Restrictive Trade Practice The traders, in order to maximize their profits and to gain power in the market, often indulge in activities that tend to block the flow of capital into production. Such traders also bring in conditions of delivery to affect the flow of supplies leading to unjustified costs. To maximise profits and market power, traders often attempt to indulge in certain trade practices which tend to obstruct the flow of capital into the stream of production. It may also bring manipulation of prices or conditions of delivery or affect the flow of supplies in the market so as to impose unjustified costs.

About the MRTP Act, 1969 The Monopolies and Restrictive Trade Practices Act, 1969, aims to prevent concentration of economic power to the common detriment, provide for control of monopolies and probation of monopolistic, restrictive and unfair trade practice, and protect consumer interest. The MRTP Act extends to the whole of India except the state of Jammu and Kashmir. This law was enacted:

To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few, To provide for the control of monopolies, and To prohibit monopolistic and restrictive trade practices.

Unless the Central Government otherwise directs, this act shall not apply to: 1. Any undertaking owned or controlled by the Government Company, 2. Any undertaking owned or controlled by the Government, 3. Any undertaking owned or controlled by a corporation (not being a company) established by or under any Central, Provincial or State Act, 4. Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees, 5. Any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons under powers by the Central Government, 6. Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or state Act, 7. Any financial institution. MRTP Commission and Filing of Complaint For the purpose of this Act, the Central Government has established a commission to be known as the Monopolies and Restrictive Trade Practices Commission. This commission shall consist of a Chairman and minimum 2 and maximum 8 other members, all to be appointed by the Central Government. Every member shall hold the office for a period specified by the Central Government. This period shall not exceed 5 years. However, the member will be eligible for reappointment. In case of any unfair trade practice, monopolistic trade practice and/or restrictive trade practice, a complaint can be filed against such practices to the MRTP commission. The procedure for filing a complaint is as follows:

Complaint is filed either by the individual consumer or through a registered consumer organization. The Director General of the MRTP commission would carry on the investigation for finding facts of the case. If the prima facie case is not made, the complaint is dismissed. If the compliant is true, an order is passed to its effect. The commission restricts and restrains the concerned party from carrying on such practices by granting temporary injunction. Then the final order is passed. The complainant may be compensated for his loss.

Complaints regarding monopolistic trade practice, unfair trade practice and restrictive trade practice can be made to the MRTP commission.

Procedure of Action on Complaint: Inquiry may be initiated through a complaint by an individual or registered consumer organisation. Fact finding investigation is carried on by the Director General. If no prima facie case is made, the complaint is dismissed, else an order is passed to that effect. The commission may restrain the party concerned from carrying on the impugned trade practices by granting temporary injunction. Final order is passed. Compensation may be granted to the complainant.

Question-19. What do you mean by Competition Act and what are its provisions relating to consumer protection? Answer:
Competition Act The Competition Act is a federal law governing most business conduct. It contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. The Competition Act, 2002 was passed by the Parliament in the year 2002, to which the President accorded assent in January, 2003. It was subsequently amended by the Competition (Amendment) Act, 2007. In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal have been established. The Competition Commission of India is now fully functional with a Chairperson and six members. The provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant position were notified on May 20, 2009. The Competition Act, 2002, which still hasnt been completely enforced as yet, was devised as a replacement of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969. This act moved away from the earlier emphasis of curbing monopolies in particular industries, to a more particular and directed approach towards promoting competition and thereby increasing the size and scope of industry. Better competition is believed to lead to higher efficiency in competing companies, thereby leading to a better allocation of given resources. An interesting fact to note about the Competition Act is that it frowns upon the abuse of dominance by a particular company, but not dominance per se. It has also negated certain

clauses which were already under the protection of the Consumer Protection Act, 1986, and which had been repeated in the earlier MRTP Act. Largely based on the post-reform (1991) era, the new act is far more clear with certain well-defined punitive measures against offenders. Definitions regarding groups and mergers are now more explicit and result oriented. There has been however some debate regarding the ambiguity and effectiveness of this new act. FICCI or the Federation of Indian Chambers for Commerce and Industry has expressed concern over the provisions regulating mergers and acquisitions in this act. It feels that such curbs might result in a slow down of the industry, particularly in the current larger world scenario. Citing the Section 5 of this Act, under which turnover thresholds are based, it states that an Indian company with a turnover of Rs. 3000 crore cannot acquire another Indian company without prior notification and approval of the Competition Commission. On the other hand, a foreign company (outside India) with turnover of more than USD 1.5 billion (or in excess of Rs. 4500 crore) may acquire a company in India with sales just short of Rs. 1500 crore without any notification to (or approval of) the Competition Commission being required. Such procedures might hamper indigenous growth, making it tougher for Indian industry looking for expansion through acquisitions. There are also other irregularities with this act. For example, the Section 3(5) of this law excludes all IPR (Intellectual Property Right) from its applicability. Thus, companies with IPR can tend to monopolise industry. This is very relevant in the field of genome research and biotech firms. Such firms can have the sole licence to medicines developed through such research, besides other key genes of organisms they might discover. Medication derived through such research might become their own prerogative, which can affect pricing strategies. This means that the product, with the absence of competition in the industry, might be priced at an unaffordable price for most consumers. Other concerns relate to the supreme control of the CCI, or the Competition Commission of India, the regulatory body covering the act. It is feared that the CCI will become a super regulator as other regulatory authorities will be subject to Competition Law. This means that regulation will largely centre around the CCI and the other bodies will loose strength and relevance. Leaving such control on a single authority is always a risky task. The CCI, a committee of ten members besides a chairperson, has been designed to minimise the politicisation of appointments. A selection by a collegium will ensure the appointment of a judicial member, besides members from economics, international trade, commerce, industry,

finance, etc. However, there is certain ambiguity in this attempt to make the CCI free from political intervention. Certain clauses to the act state that the government by notification may exempt a class of enterprises in the interest of national security/public interest, any agreement arising out of an international treaty/agreement, and (or) an enterprise performing a sovereign function on behalf of the government. The last bit is very disturbing as it leaves a huge scope for corruption and malpractice. The government can effectively blanket any industry/company from the purview of the CCI as it wishes, which amazingly is in stark contradiction to the so-called attempt to making the CCI free from political intervention. The new Act, although a welcome change over the outdated MRTP Act, does come with certain flaws. Some changes like increasing the threshold limit (turnover, asset value) for it to come under the purview of the Commission were introduced in 2006. Also, the waiting period for approval has been reduced and fixed to a maximum of 210 days, to minimise wastage of time. Some Indian economists argue that this act has been a result of regular prodding by the WTO to open up our economy further. What effect the CCI has on the industry is yet to be seen, and it is felt that there are yet more measures needed to protect our indigenous industry. Once the new Act comes into full effect, only then will its relevance be fully known. Competition law and consumer protection The assumption that competition law and consumer protection are mutually reinforcing is rarely challenged. The theory seems uncontroversial. However, because a positive interaction between the two is presumed to be self-evident, the frequent conflicts that do in fact arise are often dealt with on an ad hoc basis, with no overarching legal authority. There is a clear need for a detailed and coherent understanding of exactly where the complements and tensions between the two policy areas exist. Dr Cseres in-depth analysis provides that understanding. Proceeding from the dual perspective of law and economics that is, Of justice, fairness, and reasonableness on the one hand, and of efficiency of the other she fully considers such underlying issues as the following: the role of competition law and consumer law in a free market economy; the notion of consumer welfare; the effect of the modernisation of EC competition law for consumers; economics theories of information, bounded rationality, and transaction costs; the special significance of vertical agreements and merger control; and, how consumers are affected by information asymmetries. The ultimate focus of the book is on current and emerging EC law, In which a rapprochement between the two areas seems to be under way. Dr. Cseres provides a knowledgeable guide To The various strands of theory, policy, and jurisprudence that (she shows) ought to be taken into account in the process,

including schools of thought and law and policy experience in both Europe and the United States. A special chapter on Hungary, where post-1989 law and practice reveal a fresh and distinctly forward-looking understanding of the matter, Is one of the book's most extraordinary features. Competition Law and Consumer Protection stands alone as a committed contribution to bridging a gap in legal knowledge the significance of which grows daily. it will be of immeasurable value to a wide range of professionals from academics and researchers to officials, policymakers, and practitioners in competition law, consumer protection advocacy, economic theory and planning, business administration, and various pertinent government authorities.

Objectives of Competition Act in context to Consumer Protection The purpose of Competition act in context to Consumer Protection is to maintain and encourage competition in order to:

promote the efficiency and adaptability of the Canadian economy expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy provide consumers with competitive prices and product choices.

The administration and enforcement of the Competition Act is done by the Competition Bureau which is also responsible for the administration and enforcement of the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. Competition law objectives and consumer welfare Static Efficiency: Lower prices Better quality More choice Dynamic Efficiency: Efficient allocation of resources Management, processing and technological improvements Product innovation These objectives all have consumers as the ultimate beneficiaries and result in satisfaction in trade (consumer welfare) Competition laws can be used to attain consumer welfare Consumer interests are specific concern of EU Law The UN Set of Principles and Rules on Competition has Consumer Welfare among its Objectives

Competition Law and Consumer Rights The right to basic needs (through the price effects and increased production) and the right to choice are directly enhanced by competition law enforcement for all jurisdictions. Some competition laws also include unfair trade practices (UTPs), which directly benefit consumers rather than indirectly. In addition to the general issues such as bait and switch, misleading advertising etc, UTPs provision include issues addressing some basic rights such as: obligations to indicate prices and terms of trade and prohibiting misleading advertising (right to information); compensation for harmful and defective products (right to safety and right to redress); Competition laws can also be used to attain some basic consumer rights The recognition of the common objective has also given rise to operational framework questions

Question-20. What is Cyber Law and when it was introduce in India? What are the advantages of Cyber law? Answer:
Cyber Law Cyber crimes can involve criminal activities that are traditional in nature, such as theft, fraud, forgery, defamation and mischief, all of which are subject to the Indian Penal Code. The abuse of computers has also given birth to a gamut of new age crimes that are addressed by the Information Technology Act, 2000. We can categorize Cyber crimes in two ways The Computer as a Target :-using a computer to attack other computers. For example Hacking, Virus/Worm attacks, DOS attack etc. The computer as a weapon :-using a computer to commit real world crimes. For example Cyber Terrorism, IPR violations, Credit card frauds, EFT frauds, Pornography etc. Cyber Crime regulated by Cyber Laws or Internet Laws. Technical Aspects Technological advancements have created new possibilities for criminal activity, in particular the criminal misuse of information technologies such as

a. Unauthorized access & Hacking:Access means gaining entry into, instructing or communicating with the logical, arithmetical, or memory function resources of a computer, computer system or computer network. Unauthorized access would therefore mean any kind of access without the permission of either the rightful owner or the person in charge of a computer, computer system or computer network. Every act committed towards breaking into a computer and/or network is hacking. Hackers write or use ready-made computer programs to attack the target computer. They possess the desire to destruct and they get the kick out of such destruction. Some hackers hack for personal monetary gains, such as to stealing the credit card information, transferring money from various bank accounts to their own account followed by withdrawal of money. By hacking web server taking control on another persons website called as web hijacking

Introduction of Cyber Law in India At no other time in the 20th century, there have been so drastic changes in human history which have such an impact on commerce from a small proprietorship firm to an MNC having branches all over the world from small varieties of tangibles to diverse varieties of uncountable tangibles and even intangibles from a market of few miles to a global market supported by Internet from a local money-lender to a global finance company, no doubt, we have developed a lot. In the last few years, the methods and style of trading have changed. Trading electronically is no longer new now. It has flourished the idea of cost reduction and timesaving. The following have pushed the way for trading electronically: (i) The pace of change in the computer system and computer software; (ii) The growing use of PCs and internet, hence, instant response and convenience of getting informations; (iii) The trend of globalisation; (iv) The ever increasing volume of organisations; (v) Rapid drop in telecommunication cost (STD & ISD); and (vi) Business transformation, hence, personalised attention. These are drastically pushing the graph of number and volume of transactions through Internet up and the graph of transaction cost down. The US Govt. decided five years ago that ECommerce was the way to go. The UN has established an Internet based Global Trade Point Network that assists-small and medium size companies eager to expand globally one estimate suggests that in 1998, one out of every seven trades taking place in US originated as an order over the Internet as opposed to none in 1992. Even in India, 95% of stock trading is done over the screen. The cost of such trading has reduced by at least 75%. Overall, trading volume has gone up by at least 100% over last five years. ICICI bank is the first bank, which has started net banking in India. A study of Nolan Norton, a computer consultancy firm, showed transaction

cut time upto 90% and in-crease in transaction by 25-50% (Source: Finance Times Review). No doubt, Ecommerce will revolutionize trade and commerce. There are two types of goods, which are traded electronically: (i) tangibles and (ii) intangibles i.e. computer software, books, games, education and training material in digitized form. The significant point to be noted is that as defined above, e-commerce would include transactions involving delivery and payment in traditional manner if offer and acceptance of the offer is through a network. The above definitions of e-commerce are crucial from the perspective of understanding the nature of transactions and the manner in which such transactions change traditional business practices. The importance of conducting business electronically cannot be undermined. Most businesses are gradually moving towards the digital market place as it offers infinite choices. This has led to the emergence of virtual marketplaces, which are the nothing but the blossoming of real world commercial and consumer transactions into the cyber world. This transition has changed the role of technology from being a mere enabler to being the backbone of business. The virtual workplace has now graduated to being a versatile new marketplace in itself, spinning a whole new business sphere and accompanying models, revenue streams and growth spurs. The main businesses, spurring this shift to the digital marketplace are: Internet Service Providers Application Service Providers Business 2 Consumer segment Business 2 Business segment Consumer 2 Business segment Consumer 2 Consumer segment The above discussion does indicate the relative extent of domestic and cross border ecommerce in India. All this requires the comprehensive cyber law in place for regulating the electronic business in the country. This is with view in mind, the government of India brought Information Technology Bill 2000 in the Parliament and the bill has been passed in the same year. In May 2000, both the houses of the Indian Parliament passed the Information Technology Bill. The Bill received the assent of the President in August 2000 and came to be known as the Information Technology Act, 2000. Cyber laws are contained in the IT Act, 2000. This Act aims to provide the legal-infrastructure for e-commerce in India. And the cyber laws have a major impact for e-businesses and the new economy in India. So, it is important to understand what are the various perspectives of the IT Act, 2000 and what it offers. The Information Technology Act, 2000 also aims to provide for the legal framework so that legal sanctity is accorded to all electronic records and other activities carried out by electronic means. The Act states that unless otherwise agreed, an acceptance of contract may be expressed by electronic means of communication and the same shall have legal validity and enforceability. Some highlights of the Act are listed below: Chapter-II of the Act specifically stipulates that any subscriber may authenticate an electronic record by affixing his digital signature. It further states that any person can verify an electronic record by use of a public key of the subscriber. Chapter-III of the Act details about Electronic Governance and provides inter alia amongst others that where any law provides that information or any other matter shall be in writing or in the typewritten or printed form, then, notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied if such information or matter is Rendered or made available in an electronic form; and

 Accessible so as to be usable for a subsequent reference The said chapter, also details the legal recognition of Digital Signatures. Chapter-IV of the said Act gives a scheme for Regulation of Certifying Authorities. The Act envisages a Controller of Certifying Authorities who shall perform the function of exercising supervision over the activities of the Certifying Authorities as also laying down standards and conditions governing the Certifying Authorities as also specifying the various forms and content of Digital Signature Certificates. The Act recognizes the need for recognizing foreign Certifying Authorities and it further details the various provisions for the issue of license to issue Digital Signature Certificates. Chapter-VII of the Act details about the scheme of things relating to Digital Signature Certificates. The duties of subscribers are also enshrined in the said Act. Chapter-IX of the said Act talks about penalties and adjudication for various offences. The penalties for damage to computer, computer systems etc. has been fixed as damages by way of compensation not exceeding Rs.1,00,00,000 to affected persons. The Act talks of appointment of any officers not below the rank of a Director to the Government of India or an equivalent officer of state government as an Adjudicating Officer who shall adjudicate whether any person has made a contravention of any of the provisions of the said Act or rules framed there under. The said Adjudicating Officer has been given the powers of a Civil Court. Chapter-X of the Act talks of the establishment of the Cyber Regulations Appellate Tribunal, which shall be an appellate body where appeals against the orders passed by the Adjudicating Officers, shall be preferred. Chapter-XI of the Act talks about various offences and the said offences shall be investigated only by a Police Officer not below the rank of the Deputy Superintendent of Police. These offences include tampering with computer source documents, publishing of information, which is obscene in electronic form, and hacking. The Act also provides for the constitution of the Cyber Regulations Advisory Committee, which shall advice the government as regards any rules, or for any other purpose connected with the said act. The said Act also proposes to amend the Indian Penal Code, 1860, the Indian Evidence Act, 1872, The Bankers Books Evidence Act, 1891, The Reserve Bank of India Act, 1934 to make them in tune with the provisions of the IT Act. Advantages of Cyber Laws The IT Act 2000 attempts to change outdated laws and provides ways to deal with cyber crimes. We need such laws so that people can perform purchase transactions over the Net through credit cards without fear of misuse. The Act offers the much-needed legal framework so that information is not denied legal effect, validity or enforceability, solely on the ground that it is in the form of electronic records. In view of the growth in transactions and communications carried out through electronic records, the Act seeks to empower government departments to accept filing, creating and retention of official documents in the digital format. The Act has also proposed a legal framework for the authentication and origin of electronic records / communications through digital signature. From the perspective of e-commerce in India, the IT Act 2000 and its provisions contain many positive aspects. Firstly, the implications of these provisions for thee-businesses would be that email would now be a valid and legal form of communication in our country that can be duly produced and approved in a court of law.

 Companies shall now be able to carry out electronic commerce using the legal infrastructure provided by the Act. Digital signatures have been given legal validity and sanction in the Act. The Act throws open the doors for the entry of corporate companies in the business of being Certifying Authorities for issuing Digital Signatures Certificates. The Act now allows Government to issue notification on the web thus heralding egovernance. The Act enables the companies to file any form, application or any other document with any office, authority, body or agency owned or controlled by the appropriate Government in electronic form by means of such electronic form as may be prescribed by e appropriate Government. The IT Act also addresses the important issues of security, which are so critical to the success of electronic transactions. The Act has given a legal definition to the concept of secure digital signatures that would be required to have been passed through a system of a security Procedure, as stipulated by the Government at a later date. Under the IT Act, 2000, it shall now be possible for corporates to have a statutory remedy incase if anyone breaks into their computer systems or network and causes damages or copies data. The remedy provided by the Act is in the form of monetary damages, not exceeding Rs. 1 crore.

Question-21. What are Voluntary Consumer Organizations? How Voluntary Consumer Organizations are formed and registered? or Question-Explain the need for Voluntary Consumer Organizations. How these organizations work? June,2010 Answer:
Voluntary Consumer Organizations Voluntary Consumer Organizations work in close association with consumers and have an impartial perception of the issues a consumer confronts vis a vis producers or service providers. But, these Voluntary Organizations lack capacity to take up cause of consumers on account of dearth of infrastructural capacity, human resources, managerial and financial capacities. The problem is further compounded on account of their inability to accept funding from the Industry, since this would compromise their consumer friendly position and dilute their observance of VCOs code of ethics. Government Departments should therefore consider supporting and strengthening the capacity of such VCOs. These organizations have a vital role in generating awareness, educating consumers, dissemination important information, providing consumer advise and taking up cause of consumers, especially Class Action cases. VCOs having wherewithal can also take up innovative technology based projects especially in pilot mode, comparative testing of products and services. This provides essential information to consumers in taking up purchase decisions. Consumer organizations should be actively promoted and encouraged to further disseminate such information.

Voluntary Consumer organizations are advocacy groups that seek to protect people from corporate abuse. Unsafe products, predatory lending, false advertising, astro turfing and pollution are all examples of corporate abuse. Voluntary Consumer organizations may operate via protests, campaigning or lobbying. They may engage in single-issue advocacy (e.g., the British Campaign for Real Ale (CAMRA), which campaigned with great success against keg beer and for cask ale), or set themselves up as consumer watchdogs such as the Consumers' Association in the UK. One common method is the independent comparative survey or test of a particular type of product or service, involving different manufacturers or companies. Another arena where consumer organizations have operated is food safety. The needs for campaigning in this area are less easy to reconcile with their traditional methods, since the scientific, dietary or medical evidence is normally more complex than in other arenas, such as the electric safety of white goods. The current standards on mandatory labelling, in developed countries, have in part been shaped by past lobbying by consumer groups The aim of consumer organizations may be to establish and to attempt to enforce consumer rights. Effective work has also been done, however, simply by using the threat of bad publicity to keep companies' focus on the consumers' point of view. List of some Voluntary Customer Organization

CERC (Consumer Education and Research Centre) FEDCOT (Federation of Consumer Organisations in Tamil Nadu) Citizen Consumer and Civic Action Group Consumer Voice SMN Consumer Protection Council Consumer Guidance Society of India CUTS (Consumer Unity of Trust Society) Ministry of Consumer Affairs Mumbai Grahak Panchayat CONCERT (Centre for Consumer Education Research, Teaching, Training and Testing) Bureau of Indian Standards

These would have the following components:(i) (ii) (iii) Internal dispute resolution mechanism for all manufacturers/service providers; Use legislation for enforcement of the rights of consumers; Use of EC Act for non-market interventions;

(iv)

Ensure better harmonization of standards, national and international, to promote better choices.

(i) Internal Dispute Resolution Mechanism: Complaints resolution is the cardinal feature of Consumer Policy since it is fundamental to promotion of consumer confidence in the market place. An effective complaint redressal system impacts the behavior of traders as well as they have incentive to behave honestly. Formal system of complaint resolution is already in existence; there are Consumer Fora set up under Consumer Protection Act, Sectoral Departments of the Government have Regulatory Bodies, Appellate Tribunals and Ombudsmen. Industry should be provided with incentives to resolve disputes at the earliest possible stage through internal handling mechanism. This can be most effectively done by each Industry Body evolving a Code of Conduct and binding the producers/service providers through a MOU, which could be voluntary in nature. Ideally self regulation is the most effective mechanism of regulation. The Industry Body can adopt Internal Complaint Resolution standards (already notified by ISO and BIS) which could be uniformly followed by its members. Such a system should be informal and have an inquisitorial approach so that the complaints could also be investigated The complainants should not be required to engage legal representatives to access this system and this should work on the principle that the consumers right to access courts is preserved and is not truncated in any manner. Wherever necessary, manufacturers, traders and service providers should be mandated to provide in-house grievance redressal machinery with the provision for one stage appeal inhouse and one stage of review against the appeal to an independent body financed by the concerned industry. DELIVERABLES: 1. Consumers are empowered, this can be attained by providing real choices and accurate information, making markets operate in transparent manner and effective protection of consumer rights. a. b. Consumer protection regulation are in place Enforcement mechanism and redressal system are there to implement Consumer Protection Regulation.

c.

Attempts should be made to put in place Alternate Dispute Redressal systems which are informal, which deliver justice expeditiously and in cost effective manner.

d. e.

An internal dispute resolution mechanism for manufacturers and service providers should be put in place. Manufacturers, traders and service providers should be encouraged and mandated to provide full information of their products and services.

2.

Enhancement of consumer welfare, which can be ensured by provision of goods and services at realistic price, more choices, availability of goods in the market that are safe, this requires monitoring of consumer markets and regulation.

3.

Consumers are informed and educated about the products and services they are purchasing. They are also made aware of the redressal mechanism, if they are cheated or the goods or services are found to be deficient. a. b. A Media Policy is in place in Ministries / Department/ Organization. Mass multi-media awareness campaign taken up by the Department/ Ministries individually or jointly with Department engaged in similar activities is an effective medium for consumer awareness. c. Consumer education pertaining to the products and services which are new and complex can be effectively conducted by publication of printed material and publicizing the gist in the mass awareness campaigns through news papers. Web is another effective medium for dissemination such information widely.

4.

Consumers are being serviced by most of the Departments/Ministries. They should be at the heart of the Policies and Regulations of such Departments/ Ministries. Accordingly the following principles need to be followed:a. Consumer organizations participate in the formulation of policies which are of interest to consumers.

b. c.

Resource base of Consumer Organizations are strengthened through Government funding and training. Wherever necessary, laws and codes should be reengineered to provide for consumer empowerment.

5.

Unfair Trade Practices resorted to by sellers, manufacturers and service providers should be suitably addressed, so that these do not affect the interest of the consumers.

6.

The products and services that are placed in the market are safe and conform to standards. There is a mechanism available to correct the quality of those products and services which do not conform to the prescribe standards.

7.

Comparative testing of products and services should be encouraged. Agencies that have capacity to undertake such activities should be strengthened.

Non-Governmental Consumer Organizations are non-profit, non-political (in most cases), nonregulatory, independent advocacy groups promoting consumerism in India. Although they lack statutory powers, they form a critical support network for you when you are a victim of corporate malpractice and/or deceit. Imagining you alone against a corporate powerhouse with 50,000 employees, 50 lawyers, and Rupees 500 Crores at their disposal isn't exactly a comforting thought. With consumer organizations to assist, you don't have to worry; you are not alone in your fight for justice you have the support of powerful and determined social organizations that can organize protest rallies against corporate entities (no matter how powerful they are), or lobby the government or other statutory agencies to take notice of your grievance. Consumer organizations improve your awareness of your consumer rights and advice you on the legal recourse you can take when your consumer rights are violated. This article provides you information about the salient consumer protection and advocacy groups in India today. If you notice that any of their addresses are outdated, please inform us by writing to Consumerdaddy(at)yahoo(dot)com. Consumer Coordination Council (CCC) Established in 1993 under the Societies Registration Act 1860, Consumer Coordination Council (CCC) has been a stalwart proponent of good governance. In 1996, CCC launched a national campaign on citizens' charter to implement transparency, accountability, standards of service and a public grievance redressal system at the government level. CCC has made notable achievements in influencing the making of laws, governmental policy decisions, and providing

administrative infrastructure for protecting consumer interest. It also serves as an umbrella organization for all other consumer NGOs in India. Financial Assistance to Voluntary Organizations Working For Promotion of Consumer Movement Government of National Capital Territory of Delhi has a scheme to provide financial assistance to voluntary consumer organisations on project/programme basis for following purposes:1. 2. 3. 4. Creating and strengthening of promotion of Consumer Movement; Organising Consumer Education Programmes by exhibitions, talks, film shows, demonstrations etc.; To undertake/hold consumer problems; workshops, seminars by Education and Programmes into and

research

investigation and quantity

To undertake testing programmes standardization of consumer products;

regarding

quality

The total Grant-in-Aid is only Rs. 5 Lacs to be distributed amongst successful applications after scrutiny of their projects/programmes by an Inter Departmental Screening Committee headed by Director (Consumer Affairs). Voluntary Consumer Organizations have been actively assisting consumers in their quest for redress. They do the task of counseling and assistance in drafting petitions for consumers as well as in taking up issues directly with the manufacturer / service provider on behalf of the consumer. VCOs are also empowered under Section 12(b) of the Consumer Protection Act to file a complaint on behalf of the consumer. However, consumers are advised to check on the integrity and reputation of the VCO before seeking their assistance.

Question -22. What do you mean by Business Self Regulation? What are the elements of effective Business self Regulation? Answer:
Business Self Regulation Business self regulation is a situation in which an industry, profession, etc. checks that its members act according to particular rules, rather than having this done by another organization: Specialists has long believed that responsible Business self-regulation is preferable to government regulation

The rise of international businesses self-regulation regimes offers a challenging case study for those interested in the relationship between ethics and business. Regulation without external enforcement has always been a focal point for explorations into the relationship between morality and economic behavior. Are self-regulatory arrangements viable? Are they stable? What are the factors and conditions that determine their stability and viability? Using these questions as a vehicle, the article explores the functional anatomy of self-regulation. As such, it is an attempt to offer a broad conceptual picture in a way that creates a bridge between the current developments in the literature and the intellectual traditions that have framed the setting of the current intellectual efforts exploring the issue. Therefore the article may be seen as a conceptual and theoretical introduction to the topic as well as an attempt to frame it in a way that connects and integrates it to a broader intellectual perspective. A professional organization, unaffiliated with a government, having certain, limited regulatory authority over members. An example is the American Dental Association, which has the ability to set standards and enforce discipline over dentists in the United States. In trading, most exchanges are self-regulatory organizations, as are trading-related professional organizations. SROs assist the SEC and government regulators in the maintenance of operating standards and the arbitration of disputes . " Business Self-regulation" increasingly rings like a mantra in business. Just think of topics in the news over the past couple of months, such as the Italian fashion industry's move toward self-regulation to discourage the hiring of dangerously thin models. Or the Group of 7 nations' call for the $1.4 trillion hedge fund industry to police itself with voluntary standards and codes. Codes of conduct and self-regulation programs are growing in popularity, but are these initiatives just window dressing to appease critics and deter regulation? Or do they actually set the bar high and meet it? These are important questions to explore, according to Michael Toffel, a professor in the Technology and Operations Management Unit of Harvard Business School. Toffel has conducted extensive research and recently coorganized aconference at Harvard Business School to address these issues at a sophisticated level. Business Self-regulation programs affect managers as opposed to consumers Many more of these programs are targeted at business customers than at end consumers. There are some that consumers are increasingly seeing, like Fair Trade coffee or "sustainably harvested" labels for seafood. In handmade rugs you can find a number of labeling schemes like Rugmark, but it's still quite a small minority of your purchases; and at least in the U.S. the average consumer is pretty unaware of these programs. Companies that want to differentiate themselves in this way need to figure out how to do so. If it involves a cost premium, how can that be translated into a price premium?

In the forest industry there is now a plethora of codes. The industry code has, not surprisingly, been critiqued as being more lax than codes created by NGOs. Similarly, in international apparel supply chains, the industry-backed codes seem to be less stringent than NGO-backed codes. And so it is challenging for consumers and even company procurement managers to untangle all of this. And that's among the common codes of conduct: There are plenty of companies that have their own proprietary codes of conduct. These problems go both ways. It's not just difficult and confusing for company buyers and consumers, it's also difficult and confusing for suppliers. Just from a cost efficiency perspective, suppliers would like to have one common code to meet. But there's been enormously difficulty even within particular industriesforget about across industries in agreeing on what is appropriate. I don't think it's because they don't want to; it's because they have different values, which in the end come down to details: What is child labor? What types of factory jobs, if any, are appropriate for children? At what age can workers do which activities? What is a living wage, and how does that vary by country and by urban or rural setting? These are questions for which we just don't have good answers yet. So it is not surprising that firms might disagree with each other, and with the NGOs who are pressing these issues. Elements of Effective Self-Regulation This describes the important elements that contribute to the effectiveness of the selfregulatory model. Industry Specialized Knowledge Financial markets are becoming more and more complex. Self-regulatory bodies have a keen interest in and a thorough knowledge of this industry and the regulatory framework within which they operate. In an environment characterized by a variety of different markets and different types of participants, a specialized and thorough knowledge is very beneficial. This is an invaluable source of expertise to which statutory regulators can turn and provides several benefits. For example, SROs and their members should be involved in any and all rule development discussions affecting their industry. An Self Regulation Organization typically adopts, updates and enforces its own procedural rules and rules of conduct using large volunteer networks of market professionals to provide direct market experience. Thus, SROs have the expertise and direct market contact needed to stay abreast of rapid changes in a complex industry and continue their regulatory effectiveness. This experience can greatly enhance the effectiveness and efficiency of an SROs rule development, monitoring and enforcement programs. An SROs expertise, experience, authority and commitment also will allow it to design, implement and evaluate the compliance programs necessary to be effective. An SRO needs

a qualified staff to accomplish this task, and additional financial resources may be required in order to recruit, train and retain this kind of knowledgeable staffing. However, it will generally be more efficient to rely on an SROs extensive knowledge, experience and expertise rather than trying to reproduce it within the statutory regulator. Another integral element of most regulatory schemes, including many statutory regulatory bodies, is industry representation. Both statutory regulators and SROs recognize that industry representation provides each regulator the capacity to react quickly to changes in the marketplace. Industry representation provides the knowledge and the institutional background so that both can identify trends and determine the regulatory implications of those trends. Industry representation can also provide the knowledge and assistance to react to emergency situations quickly and effectively. IOSCOs Objectives and Principles of Securities Regulation correctly highlights that SROs may offer considerable depth and expertise regarding market operations and practices, and may be able to respond more quickly and flexibly than the government authority to changing market conditions. Industry Motivation to Business Self Regulation Business Self-Regulation and Self policing systems and the general concept of selfregulation work because of the business incentive to operate a fair, financially sound and competitive marketplace. Reputation and competition are powerful motivating forces for sustained proper behavior, especially in todays global environment where market participants have virtually immediate, 24-hour access to a range of competing markets and products. To realize the concept of self in self-regulation, SROs should encourage market participants and their professional trade associations to contribute to the development of industry best practices and standards. It is common for SROs to work with the industry to develop appropriate codes of conduct, and where appropriate, ensure compliance with these codes. From a government oversight perspective, government should consider applying general performance standards to SROs to ensure that they have the flexibility they need to develop appropriate rules of conduct and compliance and enforcement programs through their direct interaction with industry participants. This approach is more cost effective both for the SRO and the government regulator. It also has the benefit of contributing to a strong compliance culture within the firms that participate in the development of industry best practices and standards. Incorporating self-regulation into the regulatory framework will result in better regulation because the statutory regulators statute and rules are supplemented and enforced by those entities directly involved in the regulated activity, which will have more detailed knowledge of the operational or technical aspects of the activity. Additionally, self-regulation may result in better compliance with rules because it may be more easily accepted by the regulated parties.

Question-23. What is consumer awareness and its need?what are the various forms of consumer exploitation? Answer:
Consumer Awareness Consumer awareness is about making the consumer aware of his/her rights.It is a marketing term which means that consumers are aware of products or services, its characteristics and the other marketing Ps (place to buy, price, and promotion).Though the first consumer movement began in England after the Second World War, a modern declaration about consumers rights was first made in the United States of America in 1962, where four basic consumer rights (choice, information, safety and to be heard ) were recognized. Ralph Nadar, a consumer activist, is considered as the father of consumer movement. March 15 is now celebrated as the World Consumer Rights Day. The United Nations in 1985 adopted, , certain guidelines to achieve the objectives of maintaining protection for consumers and to establish high level ethical conduct for those engaged in production and distribution of goods and services. High prices, duplicate articles, underweight and under measurements, rough behavior, undue conditions, artificial scarcity are some of the ways by which consumers are exploited by manufacturers and traders. Limited information, limited supplies and low literacy are factors causing exploitation of consumers. In India, the concept of consumer protection is not new. References to the protection of consumers interest against exploitation by trade and industry, underweight and measurement, adulteration and punishment for these offences, were made in Kautilyas Arthashastra. However, an organized and systematic movement to safeguard the interest of consumers, is a recent phenomenon. The consumers have to be aware not only of the commercial aspects of sale and purchase of goods, but also of the health and security aspects. Food safety has become an important element of consumer awareness these days. In case of food products, its quality depends not only on its nutritional value, but also on its safety for human consumption. Consumption of contaminated or adulterated food is a major cause of human illness and suffering.

Consumer awareness is making the consumer aware of his or her rights. Consumer awareness it a marketing term. It means that consumers note or are aware of products or services, its characteristics and the other marketing P's (place to buy, price, and promotion). Usually commercials and ads increase consumer awareness, as well as "word of mouth" (a comment from someone you know about a product or service).

The process of development along with the expanding globalisation and liberalisation process has increased the number of consumer related issues. Consumer protection has earned an important place in the political, economic and social agendas of many nations. In India, the Government has taken many steps including legislative, to protect consumers. Education is a life long process of constantly acquiring relevant information, knowledge and skills. Consumer education is an important part of this process and is a basic consumer right that must be introduced at the school level. Consumers by definition include all citizens who are, by and large the biggest group, who are affected by almost all government, public or private decisions. The most important step in consumer education is awareness of consumer rights. However, consumer education is incomplete without the responsibilities and duties of consumers, and this influences individual behaviour to a great extent. Need we need it so we will not be misled by producers,it explains if what we buy is worth to our money..and not harmful to us and to environment Many people are ignorant of their rights to get protected against the exploitation by so many others. So when there is a forum for such redress of grievances there seems to be no such exploitation by many; and becomes a rare one. So in order to get a clear picture of the level of exploitation of consumers, the awareness is required. Role of producers proper labeling, full information, health warnings, handling information, expiration date, etc. keep to requirements, norms, standards labelproducts according requirements, providing true facts They have to produce and deliver the goods/services of rght quality at right price at right time at right place at right quantity with right face If they are providing a service they should carry it out with due skill and care. They must also make sure that any materials they provide as part of this service are fit for the purpose. It is also illegal for a supplier to cut off, or threaten to cut off, supply to a reseller (wholesale or retail) because they have been discounting goods or advertising discounts below prices set by the supplier. Need for Consumer Awareness The need for empowerment of consumers as a class cannot be over emphasized and is already well recognized all over the world. The advancement of technology and advent of sophisticated gadgets in the market and aggressive marketing strategies in the era of globalization have not only thrown open a wide choice, for the consumer but all the same also rendered the consumer vulnerable to a plethora of problems concomitant to such rapid changes. There is an urgent and increasing necessity to educate and motivate the consumer to be wary of the quality of the products, and also the possible deficiencies in the services of the growing sector of public utilities. In short, the consumer should be empowered with respect to his rights as a consumer. He should be equipped to be vigilant with a discerning eye so as to be able to protect himself from any wrongful act on the part of the trader. In order to be able to position the consumer in such a state, there is every need not only to evolve legal remedies but also provide reliable and exhaustive information, which he can access without much effort and expense. Recognizing the importance of the problem, the Government of India and State Government have initiated steps to introduce dispute redressal mechanism by way of Consumer Protection Ac, but a lot more has to be done in the area of creating awareness on the part of the consumer to facilitate

his seeking suitable remedy wherever there is a need. This becomes more important in the rural areas, where there is wide spread illiteracy. We should undertake steps to create a facilitative mechanism with the following objectives:

1. Promote General Awareness of the rights of the consumer by encouraging consumer education and supplying information. 2. Publish periodical and product specific booklets, pamphlets, cassettes, CDs, slides, documentary films and other devices of mass communication for promoting consumer awareness in English and regional languages, highlighting the problem in specified areas like real estate, public utilities, non-banking financial agencies etc. 3. Enlighten the business community on its ethical and legal obligations to maintain quality of the products or services and to be transparent in dealing with consumers. 4. Encourage consumer activities to strengthen the existing institutional set up of consumer dispute redressal by acting as a facilitator between consumer and the institution. 5. Study the available legal remedies, analyze and suggest new measures for the effective and better consumer protection. 6. Bring together the consumer, traders and policy makers to exchange information of mutual interest for better coordination. Bring together the NGOs/Consumer activities operating in different areas and equip them with suitable and required information and knowledge to enable them to act as nodal agents of change in rural areas. 7. Organize and conduct seminars, workshops and group discussions and thus provide a platform for threadbare discussion of the issues and evolve suitable remedial action. Conduct motivational campaigns for groups of potential customers both in urban and rural areas. 8. Coordinate programmes organized by Central and State Governments, State Legal Aid Authorities, Academic Institutes, National and International Consumer Organizations. 9. Periodic interaction with electronic & print media on success stories of consumers. 10. Establish links with educational institutions like universities, colleges, high schools to emphasize the need for improving consumer education in the curriculum. Consumer clubs which were started recently by the A.P. Consumer affairs, Food & Civil Supplies Dept. would go a long way in acheiving this.

11. Interact with national level organizations like NISIET, NIRD, and ASCI etc. to explore possible collaboration and organize awareness programmes for their clientele and undertake research projects. 12. Organize a database enabling the consumer retrieve the required information in a less expensive and quick way. Set up a website http://scdrc.ap.nic to publish information, news including judgments, articles, on product analysis and related matters for the guidance of consumers to have informed choice of product services, redressal agencies and mechanisms.

Question-24. What is the Role of Media in consumer Protection? Explain Or Question- Highlight the role of Media and Government in Consumer Protection and Consumer Awareness. June,2010. Answer:
Role Of Media In Consumer Protection The Media or press in India has always shown its solidarity with the socio economic problems of this country. There are no two opinions about the significant contribution that press, journalists, and the media people have done good work in bringing to light the major issues of social concern. The press in India has always been responsive in performing its duties so that those who are involved in the matters of policy making can give justice to their duties. There is no dearth example as to how the press has played a major role in unearthing certain scandals where people in the corridors of power were involved. It is not a singular matter for Indian media to take up issues, where a collective action, legislation, and policy decisions was an urgent need. Various legislations, administrative actions and even mass participations from different sections of society with divergent interest were possible only because of initiative and lead taken by media people. May it be a problem of national integration, social unity, and economic injustice, upliftment of down-trodden or educational and economic advancement. Earlier the readership was the only criteria to assess the affectivity of media, as it was only print media that was its mark. The development of movies brought a big change. People now could see and listen what the communicator wanted to say? Literacy was no more a criteria to establish a link with audience and viewers. Multiplicities of communication media have brought a sea change in the psychology of people. People became more awakened, wellinformed and cautious. They could know different views of the same problem; they could perceive, understand and analyze a situation well. Further advancement of media and mass literacy has also changed the composition of our society. Now, people are becoming conscious and logical thinking and rational bent of mind. The role of media has also broadened. It has undertaken many ventures, along with entertainment, education and enhancement of social

structure. Thus, the new media is a mirror of modern society expressing its needs, aspirations, expectations and failures. Objectives to study the Role of Media in Consumer protection 1.To evaluate the response of media towards consumers cause. 2.To find out whether media has considered consumer exploitation as a serious socioeconomic evil. 3. To know, as to what kind of awakening is created by media towards social-evil of consumer exploitation. 4.To understand how media has come forward to create awareness about consumer protection and all such legislations. 5. To find out, whether media has offered a proper dias to the consumer to put forward their views. Media and Consumers problems: As a general rule, the problem of society, a social group or in some cases, the problems of individual are well expressed by no one else but media. Our civilization is characterized by impact of media on its structure, value system and outlook. Many socioeconomic problems, education of masses and social awakening can best be done by media. Media presently deals with problems of current importance. Where investigative journalism, reporting of pertinent and important facts and high lightening those events which otherwise cannot be noticed occupies prime position. Due to advent of T.V a large section of society is now influenced by media activities to a great extent. It has become a silent opinion maker and hence it is working on a larger plane than any other institution. In the current past, media has undertaken the job of consumer education and fighting against exploitation of consumers. Suggestions for the major Media features to be considered. Following are the major features of media that should be considered from the view point of promotion of consumer education. 1) Media works more effectively than any other institution to form rational and appropriate opinions. It can change an existing belief, can confirm existing view point, support a particular preposition or condemn an ideology. The good olden days are gone where individuals matter more than formation of opinion due to availability of multiple media. 2) Media is a dias where all can come together, express their views whether similar or divergent and still need not be the follower of particular ideology or school of thoughts. Media permits diversity of opinion and at the same time it can continue its functioning on one particular ideology. Grievances of different parties, dimensions of different problems, arguments, counter arguments on the particular issue can rightly be reflected by media alone. 3) People often call press as a fourth column of democracy. The position can be extended to all forms of media because only print media is not influencing opinion of public, on the contrary electronic media, in terms of its coverage is more exhaustive and effective.

Considering these aspects, problems of consumers can rightly be expressed by media, whatever may be the form. In explaining consumers problems, atrocities against consumers, educating consumers and making them aware of their problems. Earlier it was presumed by a good citizen as an essential aspect of sound democracy. Today it is rightly said that a good consumer makes a good citizen and ultimately a good democrat. Promoting awareness by spreading information is the primary task that media can perform towards development of consumerism. Information is the asset. Exploitation of consumer is due to absence of this vital role by providing right information at right time to consumers. Ignorance regarding prices and price-behavior changes market structure and fluctuations in economy is not understood by ordinary consumers and hence they fall prey to exploitation and malpractices. Exploitation of consumers is done in various forms. Improper advertisements, exaggeration of claims and misstatements are the ways to exploit consumers. Media can raise these issues and resist against the unscrupulous practices of marketers. Public utility services, hospitals, transports and communication are the areas where consumers have their grievances in great magnitude. But the nature of services is that a consumer finds useless to fight against complaints or authorities. Such malpractices can rightly be brought to light by media. How Media Promotes Consumer Movement? Presently people have faith in the press more than any other institution. The impartial, truthful and bold militant press has protected interest of consumers in many cases. People prefer to believe in the reports published in press than official proclamation of government. The issues of public interest as handled by press have no parallel. This is more so in case of matters of consumers interest. The poor fate of affairs in service sector, the low quality products, adulterates food grains, rampant corruption; bureaucratic tendencies of Government officials, nepotism in high places, black marketing, smuggling and artificial scarcity of goods are carefully highlighted by media alone. Because of this, media is accepted as champion of public cause. Following are the different activities that different media have undertaken to promote consumer consciousness. The electronic media have started campaigning for consumer education by regular social communication by regular social communication starting constitutional rights of consumers as well as when and how they should use it. The regular advertisements regarding how a consumer should launch his complaint and with whom this should be launched are very useful. Press: Press is playing a dominant role in promotion of consumer movement in this country. Different ways and means have been adopted by this fourth estate to protect consumers. Publication of weekly column on consumer issues has now become an established practice. This column deals with the problems, rights and duties of consumers and how the consumers can effectively exercise their rights. Some newspapers publish leading case events and major disputes between consumers and marketers. The Economic Times publishes a column titled Caveat Emptor which solely deals with current problems and grievances of consumers against marketers. Consumer education is another sphere of activities. Dos and Donts as a guide to consumers are also published by newspapers. Some tell about when to buy, how to buy and from where to buy. The fallacies of claims by marketers, distorted to notice by newspaper

correspondents. While educating consumers, many newspapers tell about the false claims in advertisements, the hollowness of sales and bazars and other sales gimmicks. Rural consumers, women, children are often targets of marketers. They are easy to deceive and have less information. Some newspapers have undertaken campaigns to safeguard these consumers by publishing special news items or by way of introducing special columns. Profiles of consumer activists, their commendable jobs and consumers association helps consumers in particular region are the issues which are given importance. Thus press has played a major role in promoting consumer movement in every part of the world. Clarity of thoughts, easy accessibility and higher degree of reliability are the reasons why press has come forwarding in consumer movement. The significant contribution of press cannot be undermined when one thinks of consumer movement. Means of Publicity of Consumer Movement through Print Media: Print media especially newspapers can give lot of publicity to the activities of consumer movement by making effective use of various columns and news forms. The news regarding consumer affairs usually appear in following ways in the newspapers. Editorials: Many newspapers often express views of society in general through their editorial columns. Usually these views indicate a general opinion about how a Government policy, decision or any verdict has been accepted by the society. Sometimes these editorials offer suggestion/recommendations regarding steps to be taken to resolve issues of consumer agonies and to deal with sufferings of consumers. News stories: Some newspapers often publish stories on the matters of consumers interests or grievances or some leading incidents related with consumer problems. Such news stories generally are designed after considering the news worthiness of an event. Consumers Column: A good number of newspapers publish a weekly / fortnightly column on the matters of consumers interest. This column attracts readers as consumers because it contains news items and articles of common interest. The consumers are attracted towards this column because many problems and sufferings are rightly expressed in this column. Letters to Editors: Consumers, consumer activists and many other conscious citizens prefer to express their views through newspapers. The best dias for this purpose is Readers column, Opinion of consumers on certain important issues, their grievances and suggestions to the public authorities often appear in the column. Some newspapers maintain a separate column to publish consumers grievances. Investors grievances, suggestions to Municipal Corporation, State Electricity Boards, Post and Telegraph are often published in this column. 7.Opinions of readers regarding articles of consumers interest: The research has made a survey as to, whether readers refer articles of consumer interest. The major observations in this connection are as follows:A majority of consumers read the articles regarding consumers interest. However, the frequency of reading these articles on a regular basis is not very high. The readership of these articles is limited and irregular which indicates that, there is a limited and lukewarm interest in the issues of consumer concern. The expectation of consumers in connection with consumers column varies. However, most of the consumers prefer to read matters regarding consumers interest and legal decisions and Government policies affecting consumers interest. This indicates a purposive and limited

interest of readers in the consumers movement. There is a general disinterest to read about issues related with consumer movement and activities of the local consumers associations. Most of the consumers feel that these articles do help them to know about consumers, right and about consumer movement. Medias Responsibility, Effects and Consioderations Media in all its form, print or electronic, is a mirror of the times and society we live in. It connects us to the world and the world to us. Media is an integral part of our life. In todays world, where ones social circle is mostly just work related, based on some or the other selfish motive, we tend to believe and depend more on the media for every type of information. Media thus has tremendous impact on the way a society conducts itself in the present, as well as the shape it would take in the future. It influences people of all age group. Media also plays a very useful role in setting up good or amicable relations between traders and buyers. The promotions of fair trade practices, establishing code of conduct for businessmen are the task that media alone can shoulder. The concept of ethics in the economy relates to morality, ethics, professional and organizational ethics (Isaac quoted in Bergadaa 2007). Each industry has its own guidelines for the ethical requirements. But on the four main requirements for marketing communications are legal, decent, honest and truthful. Unfortunately, in a society that is the way the company intended to profit from the use of marketing communication messages targets can be a form of social pollution from potentially harmful and unintended effects of the consumer may have the decision represented (Hackley and Kitchen, 1999). The words of Bernstein (1951), said fifty-six years ago are still very much a question of present interest: It is not true that if we save advertising, we save all, but it seems reasonable to assume that if we do not save advertising, we might lose all.

1. Media Format The types of media which can influence consumer awareness are more numerous than ever. Older media platforms, including newspapers, radio and television, are still available but have lost popularity since the advent of the Internet. Within the category of Internet media, a consumer finds respected sites such as web versions of print newspapers and government websites alongside opinion-based sites such as blogs and message boards. Advertising exists on nearly all media platforms, whether print, television or Internet, further bombarding the consumer with information that may or may not be accurate. 2. Effects As consumers turn more frequently to Internet sources for purchase advice, they're able to keep up with recent developments faster than ever. This means, for instance, that companies have the ability to use Internet media to distribute news of product recalls almost as soon as they know a recall is necessary. It also means that unfounded information can be distributed before reliable journalists have a chance to confirm it.

3. Responsibility Journalists have the responsibility to practice the same ethics when publishing online that they use for print media, including double-checking facts and reporting without bias. Even though online media may seem less permanent than print, it actually reaches more consumers in a shorter time. Consumers have the responsibility to ensure any website they take advice from practices journalistic standards rather than simply publishes opinions. Government websites or online versions of print publications are good starting sources. Considerations Since online publishing is still new to many journalists in 2010, journalists are moving through a transition period as they learn to balance the techniques used for newspaper reporting with the new demands of Internet media. For example, in previous times, when a journalist found an error printed in one of his newspaper stories, he would run a correction in the next edition. Online, he has the opportunity to change the fact in the story, but he may be left wondering whether he needs to point out the change. Adding links to stories is another gray area, as journalists have to decide how much responsibility they bear for the accuracy of the websites they link to.

Question-25 What is the Role of Government in Consumer protection at various levels? Explain. Answer:
Role of Government in Consumer Awareness Role of a Govt in consumer awareness is only indirect and limited. From school level curriculum should cover markets and consumer informations needs, sources of information and consumer rights. Regulatory agencies and consumer courts should promote consumer awareness through publications, TV ads, booklets and brochures. Consumer forums should be encouraged to report abuse of the market by sellers. NGOs are the consumers own organisations where they should take part. Media can play an important part in Consumer Awareness. The Citizen can not continue to expect that Government will do everything for the consumers. They buy in different markets. They should educate themselves. This is what the Govt. of India does. Much depends on how everyone uses these: Consumer Welfare Fund-A Consumer Welfare Fund (CWF) was created in 1992 with the objective of providing financial assistance and to promote and protect the welfare of consumers, create consumer awareness and strengthen the consumer movement in the country, particularly in rural areas. The fund, set up by the Department of Revenue under the Central Excise and Salt Act, 1944, is operated by the Ministry of Consumer Affairs, Food and Public Distribution. The Central Excise and Salt Act, 1944 was amended in 1991

to enable the Central Government to create the CWF where the money, which is not refundable to the manufactures, etc., shall be credited. The Consumer Welfare Fund Rules were framed and notified in 1992. Under these Rules, any agency/organisation engaged in consumer welfare activities for a period of three years and registered under the Companies Act, 1956 or any other law for the time being in force, village/mandal/samiti level cooperatives of consumers, industries State Governments, etc., are eligible for seeking financial assistance from the Fund. The total quantum of financial assistance on an individual application is limited to five lakh rupees and 10 per cent contribution is required to be made by the applicant. Schemes Under CWF Jagriti Shivir Yojana: An integrated awareness campaign titled Jagriti Shivir Yojana was launched in June 2001. The scheme aims at spreading consumer awareness at district level by holding camps, meetings, functions, etc., through the State Government and District Administration officials in association with local elected representatives. So far an amount Rs 34.5 lakh had been released to States/UTs in respect of 65 districts till 31 March 2004. Recently, a decision has been taken to enhance the amount of grant from Rs 50,000 to one lakh for each district for organising consumer awareness programme at the district level. District Consumer Information Centre : A new scheme to set up a District Consumer Information Centre in each district of the country in a phased manner over a period of three years at a cost of Rs five lakh per Centre was launched in October 2000. These Centres are to be set up and run by Zilla Parishads/Voluntary Consumer Organisation of repute/educational institutions on a continuous basis. They are expected to raise consumer awareness and assist consumers in seeking redressal of their grievances. So far the scheme has been sanctioned for 96 districts in the Country. Consumer Clubs : This scheme has been introduced recently according to which a Consumer Club shall be set up in each Middle/High/Higher Secondary School/College affiliated to a government recognised Board/University. A grant of Rs 10,000 per Consumer Club for each school/college is admissible under this Scheme. Till the end of March 2004, 1,755 consumer clubs have been sanctioned in the States of Andhra Pradesh, Jammu and Kashmir, Tripura, West Bengal and NCT of Delhi. Promoting Involvement of Research Institutions/Universities/Colleges etc., in Consumer Protection and Welfare : This scheme has been launched recently to sponsor research and evaluation studies in the field of consumer welfare, to provide solution to the practical problems being faced by the consumers, to sponsor seminars/workshops/conferences on the consumer related issues and to have necessary inputs for formulation of policy/programme/scheme for the protection and welfare of the consumer. The Indian Institute of Public Administration (IIPA), New Delhi has been identified as the nodal organisation to administer this scheme. Bureau of Indian Standards

The Indian Standards Institution (ISI) came into existence on 6 January 1947 as a registered society with the objective of harmonious development of activities of standardisation, quality certification and marking. This set-up was provided statutory status through an Act of Parliament dated 26 November 1986 and the Bureau of Indian Standards (BIS) came into existence as a national standards body of India on 1 April 1987 with a broadened scope and more powers, taking over the staff, assets, liabilities and functions of the ISI. The main functions of BIS include preparation and implementation of standards, operation of certification schemes both for products and systems, organisation and management of testing laboratories, creating consumer awareness and maintaining close liaison with international standards' bodies.

With its headquarters at Delhi, BIS has five regional offices at Kolkata, Chandigarh, Mumbai, Delhi, and Chennai. It has 33 branch offices in the country. The BIS is developing need-based standards in accordance with national priorities with the help of over 26,500 technical experts as members of the technical committees. The standardisation projects are properly screened within BIS to ensure their usefulness. During 2002-03, 446 standards were formulated. As on 31 March 2004, 17,928 Indian Standards are in force covering important segments of the economy, which help the industry in upgrading the quality of their goods and services.

UNIT-IV
Question-26.How does Consumer play a vital role in Market Economy? or Question- What is the Consumer Role in Market Economy? Answer:
A consumer is a person or group of people that are the final users of products and or services generated within a social system. A consumer may be a person or group, such as a household. The concept of a consumer may vary significantly by context. The consumer is the one who consumes the goods and services produced. As such, consumers play a vital role in the economic system of a nation because in the absence of the effective demand that emanates from them, the economy virtually collapses. Typically when business people and economists talk of consumers they are talking about person as consumer, an aggregated commodity item with little individuality other than that expressed in the buy or not-buy decision. However there is a trend in marketing to individualize the concept. Instead of generating broad demographic profiles and psychographic profiles of market segments, marketers have started to engage in personalized marketing, permission marketing, and mass customization

CONSUMERS IN A MARKET ECONOMY Consumers in both market and command economies make many of the same kinds of decisions: they buy food, clothing, housing, transportation, and entertainment up to the limits of their budgets, and wish they could afford to buy more. But consumers play a much more important role in the overall working of a market economy than they do in a command economy. In fact, market economies are sometimes described as systems of consumer sovereignty, because the day-to-day spending decisions by consumers determine, to a very large extent, what goods and services are produced in the economy. How does that happen? Buying Oranges and Computer Chips Suppose a family -- Robert, Maria, and their two children -- go shopping to buy food for a family dinner. They may originally be planning to buy a chicken, tomatoes, and oranges; but their plans will be strongly influenced by the market prices of those goods. They may discover, for example, that the price of oranges has increased. There are several things that might cause those higher prices, such as freezing weather in areas where oranges are grown, which destroys a large part of the crop. The effect of the freeze is to leave the same number of consumers trying to buy a smaller number of oranges. At the old -- lower -- price, therefore, sellers would soon run out of oranges until the next harvest. Instead, by raising the price, all consumers are encouraged to cut back on the number of oranges they buy, and producers are encouraged to grow more oranges as fast as they can. There is another possibility: suppliers could choose to import a larger number of oranges from other countries. International trade, when it is permitted to operate with relatively few barriers or import taxes (called tariffs), can give consumers wider choice and allow producers to offer more competitive prices for a wide range of products, from oranges to automobiles. On the other hand, the orange crop might be spared freezing weather, but instead consumers decide to start buying more oranges and fewer apples. In other words, instead of the orange supply shrinking, demand increases. This, too, will drive up the price of oranges for a time, at least until growers have time to bring more oranges to market. Whatever the reason for the higher price, Robert and Maria will probably respond in a predictable way once they discover that the price is higher than they anticipated. They may well decide to buy fewer oranges than they had planned, or to buy apples or some other fruit instead. Because many other consumers make the same choices, oranges won't disappear from store shelves entirely. But they will be more expensive, so only the people who are willing and able to pay more for them will continue to buy them. Shortly, as more people start buying apples and other fruits as substitutes for oranges, the prices of those fruits will rise as well. But the response of consumers is only one side, the demand side, of the equation that determines the price of oranges. What happens on the other side, the supply side? A price

increase for oranges sends out a signal to all fruit growers -- people are paying more for fruit -which tells the growers it will pay to use more resources to grow fruit now than they did in the past. It will also pay the fruit growers to look for new locations for orchards where fruit isn't as likely to be damaged by bad weather. They may also pay biologists to look for new varieties of fruit that are more resistant to cold weather, insects, and various plant diseases. Over time, all of these actions will increase the production of fruit and bring prices back down. But this whole process depends first and foremost on the basic decision by consumers to spend some part of their income on oranges and other fruits. If consumers stop buying, or if they decide to spend less on a product -- for whatever reason -prices will drop. If they buy more, increasing demand, the price will rise. Keep in mind that this interaction of supply, demand, and price takes place at every level of the economy, not just with consumer goods sold to the public. Consumption refers to intermediate goods as well -- to the inputs that companies must purchase to provide their goods and services. The cost of these intermediate, or investment, goods will ripple throughout a market economy, changing the supply-and-demand equations at every level. Let's take the example of the semiconductor chip that is at the heart of the modern computer revolution. As with the case of oranges, higher prices will tend to reduce demand for computer chips and, consequently, for computers themselves. Over time, however, the higher price will signal manufacturers of computer chips that it may be profitable to increase their production, or for new suppliers of chips to consider entering the market. As chip prices come down, so eventually will the cost of computers (assuming that the cost of other inputs remains unchanged), and demand for computers will grow. That demand for computers will do more than simply spur suppliers to increase their output. It will also encourage innovation, which will result in computer chips and computers that are more powerful and efficient than earlier models -- a competition of progress and price that occurs in virtually all genuinely free markets. Prices and Consumer Incomes The other economic factor that consumers must consider carefully in making their purchases of goods and services is their own level of income. Most people earn their income from the work they perform, whether as physicians, carpenters, teachers, plumbers, assembly line workers, or clerks in retail stores. Some people also receive income by renting or selling land and other natural resources they own, as profit from a business or entrepreneurial venture, or from interest paid on their savings accounts or other investments. We later describe how the prices for those kinds of payments are determined; but the important points here are that: 1) in a market economy the basic resources used to make the goods and services that satisfy consumer demands are owned by private consumers and households; and 2) the payments, or incomes, that households receive for these productive resources rise and fall -- and that fluctuation has a direct influence on the amount consumers

are willing to spend for the goods and services they want and, in turn, on the output levels of the firms that sell those products. Consider, for example, a worker who has just retired, and as a result earns only about 60 percent of what she did while she was working. She will cut back on her purchases of many goods and services, especially those that were related to her job, such as transportation to and from work, and work clothes -- but may increase spending on a few other kinds of products, such as books and recreational goods that require more leisure time to use, perhaps including travel to see new places and old friends. If, as in many countries today, there are rapidly growing numbers of people reaching retirement age, those changing spending patterns will affect the overall market prices and output levels for these products and for many others that retirees tend to use more than most people, such as health care services. In response, some businesses will decide to make more products and services geared toward the particular interests and concerns of retirees -- as long as it is profitable for firms to produce them. To summarize: whether consumers are young or old, male or female, rich, poor, or middle class, every dollar, peso, pound, franc, rupee, mark, or yen they spend is a signal -- a kind of economic vote telling producers what goods and services they want to see produced. Consumer spending represents the basic source of demand for products sold in the marketplace, which is half of what determines the market prices for goods and services. The other half is based on decisions businesses make about what to produce and how to produce it.

Question-27. What are the recent developments in Consumer Protection Movement? Answer:
There are lot of surveys about the major developments in the field of consumer protection in India since 1984, when the statutory provisions for regulating unfair trade practices were incorporated for the first time. Among the developments described in the paper is the strengthening of provisions for consumer protection through amendments to the Act regulating restrictive and monopolistic trade practices (the MTRP Act). Public-sector undertakings and co-operative societies have been brought within the purview of the Act, and consumers have obtained the right to participate in inquiry proceedings before the MRTP Commission. Consumers and their associations have been given the right to seek redress of grievances arising out of the violation of certain pieces of legislation, including the Drugs and Cosmetics Act. The Consumer Protection Act, 1986, was enacted in order to provide speedy and inexpensive redress of consumers' grievances. Redress can now be sought before any consumer court also for negligence or deficiency in medical services.

The Bureau of Indian Standards Act, 1986, has strengthened the measures for the standardisation and quality control of manufactured goods. A Consumer Welfare Fund has been set up to provide financial assistance to voluntary consumer organisations and for the general development of consumer movement in the country. A spurt in voluntary consumer organisations in different parts of the country can also be observed. Other developments include the establishment of a separate Department of Consumer Affairs in the Union Government and the setting up of a Consumer Product Testing Laboratory The process of development coupled with increasing liberalization and globalisation across the country has enabled consumers to realize their increasingly important role in society and governance. The consumer movement in India is as old as trade and commerce. In Kautilyas Arthashastra, there are references to the concept of consumer protection against exploitation by the trade and industry, short weighment and measures, adulteration, and punishment for these offences. In a developing country like high and the level of literacy is very low, the people face a volume of problems, particularly in the context of consumer related issues. This book brings into focus the role and status of Indian consumers and their problems arising from the given socio-economic set up of our society. A critical appraisal of government policies and programs has also been attempted. Ensuring consumer welfare is the responsibility of the state. Accepting this, policies have been framed and the Consumer Protection Act, 1986 was introduced. A separate Department of Consumer Affairs was also created in the Central and State Governments to exclusively focus on ensuring the rights of consumers as enshrined in the Act. This Act has been regarded as the most progressive, comprehensive and unique piece of legislation. The present book provides a detailed and comprehensive study of the recent developments in the Indian consumer protection law, besides examining the provisions of various other statues dealing with consumer protection. It also provides further insight into consumer behaviour to help marketers develop an appropriate marketing strategy. The book constitutes a rich contribution to an issue of considerable importance. It is expected to be highly useful to policy planners, economists, researchers, NGOs and students. Recent Developments in Consumer Protection Movements The increasing number of consumer goods on offer was accompanied by rising wages across Europe and North America. Consumer organisations sprang up to analyse the products, provide independent advice, and to challenge rogue traders. The following years saw a steady expansion in testing collaboration among these new organisations and a widening of focus for IOCU. Newly formed groups were invited to join from across the world and IOCU's first global newsletter was launched.

The developing world Meanwhile at the biennial conferences that IOCU organised, leaders spoke of a wider consumer agenda, and particularly the need to address poverty, access to basic goods and services, and the challenges faced by consumers in developing countries. Issue-based networks Anwar Fazal, head of the Asia Pacific Office, took IOCU into new ways of campaigning and advocacy. He targeted transnational corporations with specific campaigns, and played a leading role in setting up issue-based networks with partners from outside the consumer movement, including the International Baby Food Action Network (IBFAN). These networks were early pioneers of a new method of campaigning for NGOs, which brought together disparate groups on a particular issue for a particular purpose. IOCU's role in the networks made it one of the early leaders of the international NGO community. UN Guidelines on Consumer Protection These methods and activities brought results. Among them, the seminal international document of the consumer movement - the United Nations Guidelines on Consumer Protection - was adopted by the UN in 1985 after 10 years of campaigning. This gave important legitimacy to the principles of consumer rights and practical support for developing national consumer protection legislation.

Capacity building Through the 1990s IOCU managed extensive capacity building programmes in all parts of the world, training both in methods (such as institutional management, research and fundraising) and on specific issues. Membership numbers increased to nearly 250 from around 115 countries. The consumer movement had indeed become global. WTO Advocacy began to focus on international trade negotiations, particularly those of the newly formed World Trade Organisation (WTO). IOCU also increased its work at the International Organisation for Standardisation (ISO) and the Codex Alimentarius Commission (food standards) as international standards became the reference point for disputes about artificial barriers to trade.

These developments in global governance made it increasingly difficult for individual countries to adopt national standards that were different from those agreed internationally.

IOCU becomes Consumers International By the late 1990s, a much-altered organisation was in place, a transition symbolised by a change of name from IOCU to Consumers International (CI) in 1995. Campaigning and member development was a particular priority in Central and Eastern Europe and in Africa. In the former, CI helped create a sustainable consumer presence very nearly from scratch in countries struggling first with democracy and transition to market economies, and then with the demands of preparations to join the EU. Many publications appeared in three languages. World Congresses were held for the first time in Latin America (Chile, 1997) and then Africa (South Africa, 2000). And CI's Presidents came, successively, from Indonesia, Hong Kong, Australia, Brazil and Kenya. New consumer issues CI facilitated member participation in trade, food and technical standards activities; taking a 40-strong delegation to the WTO ministerial in Cancun, and getting Codex and ISO to provide training and improved access to meetings. Other consumer problems also became more prominent - for example, access to and the management of utilities services, the regulation of GMOs, and protecting consumer rights in the digital age. As CI's work on these issues continued through the 2000s, its range of campaign targets and techniques developed too. Critical engagement with transnational corporations increased, but so did demands for accountability and responsibility. New communication techniques, such as email, online forums, project-specific websites and campaign films were used to raise awareness and engage with members.

Question- 28. How Consumer information and Knowledge can be used as a Means of Protection? Answer:
Consumer Information and Knowledge

Being an educated consumer is vital. Without researching products or services that you want to buy, you may not make an informed choice. Thankfully, the Internet provides a great way to research various products and services. Many websites include consumer reviews, customer comments, and other important details that you should consider. Consumer information can also be found by contacting a consumer watch-dog group such as the Better Business Bureau. Sometimes, simply checking up on a company is worth the extra effort. Consumer information also pertains to details about a certain object or service. You should be able to find these details with ease by contacting a company or by reading a users manual. The great thing about consumer information is that it is free. You can find out about nearly anything simply by conducting a bit of research. Through books, the Internet, and magazines, you can find all you need to know about a product or service. Of course, speaking with family and friends about particular products or services is also a great idea. In fact, personal referrals are often the best referrals that you can get. We publish information about consumer information our on website. On our Consumer Information Directory page, you will find plenty of details about consumer information. As soon as we find more details to add to our directory, we post them on our website. Start looking for consumer information by looking at our website. Soon, you will find all you need to know about any product or service. Importance of Consumer Information and Knowledge in Consumer Protection Every purchase you make as a consumer should be treated as an investment in your happiness. You wouldn't invest in the stock market without being informed on the choices you were making, and the same concept should apply to your daily purchases. Being an informed consumer provides you and your family with a variety of benefits Higher-Quality Investments

With almost any purchase you make, there are dozens of options for you to choose from. This is why being informed about your options is so important. If you are willing to do a little bit of research, you can find out what kind of quality products are available, and make a purchase that will last much longer than an impulse buy might. Safer Investments With the wide variety of products made, some are bound to be made poorly. Recognizing shoddy workmanship could be key to protecting your family. By keeping yourself informed as a consumer, you know what products have received poor safety reviews or have been recalled. This is particularly important with bigger purchases like vehicles. Being well-informed can literally save your life. Money-Saving Investments Going into a store and listening to a sales person can be a dangerous venture, especially if that sales person is paid on commission. They have an incentive to sell you on the most expensive options, even if they aren't really what you need. Doing your research before you shop can save

you hundreds of dollars in unnecessary features, and tell you where to shop to get the best price on your purchases. Ethical Investments

For some individuals, the ethics behind the products or services they endorse are incredibly important. Generally speaking, you shouldn't support companies that engage in activities you do not approve of. Checking out companies for things like animal testing, labor exploitation or donations to sketchy non-profit organizations can help you make an informed decision. Your money doesn't just purchase a product. It helps to support the organizations that produce that product, and any cause they deem worthy. Responsible Investments Realistically, many people would probably give their right arms to be able to drive a flashy convertible. This is where being an informed consumer makes you more responsible in your purchases. If you investigate regular drivers driving high-performance vehicles, you're likely to find stories about fatal car accidents and high insurance rates. Arming yourself with information about the consequences of your purchases doesn't just make you an informed consumer; it makes you a responsible one.

Question-29. What is ethical marketing and how it can act as an instrument of consumer protection? Answer:
Ethical Marketing Ethical Marketing refers to the application of marketing ethics into the marketing process. Briefly, marketing ethics refers to the philosophical examination, from a moral standpoint, of particular marketing issues that are matters of moral judgment. Ethical marketing generally results in a more socially responsible and culturally sensitive business community. The establishment of marketing ethics has the potential to benefit society as a whole, both in the short- and long-term. Ethical marketing should be part of business ethics in the sense that marketing forms a significant part of any business model. Study of Ethical marketing should be included in applied ethics and involves examination of whether or not an honest and factual representation of a product or service has been delivered in a framework of cultural and social values. It promotes qualitative benefits to its customers, which other similar companies, products or services fail to recognise. The concern with ethical issues, such as child labor, working conditions, relationships with third world countries and environmental problems, has changed the attitude of the Western World towards a more socially responsible way of thinking. This has influenced companies and their response is to market their products in a more socially responsible way. The increasing trend of fair trade is an example of the impact of ethical marketing. In the 'Ethical Shoppers Price Index Survey' (2009) fair trade was the most popular ethical badge products could have. It also revealed that many consumers distrusted green claims. (The idea

of fair trade is that consumers pay a guaranteed commodity price to a small group of producers, the producers agree to pay fair labor prices and conserve the environment - a fair deal for everyone.) The philosophy of marketing is not lost with this newfound ethical slant, but rather hopes to win customer loyalty by reinforcing the positive values of the brand, creating a strong citizen brand. However, this new way of thinking does create new challenges for the marketer of the 21st century, in terms of invention and development of products to add long-term benefits without reducing the products desirable qualities. Many brands have tried to use ethics to make themselves look responsible, often spinning environmental claims which has led to the term green wash. In research consumers have shown to have even less trust of ethical claims in ads than ordinary ads. media attention on ethics has resulted in many top brands suffering consumer boycotts. Although many brands have tried to use green issues, it has been noted that in research 2/3 of consumers responded more to ethical claims that relate to people rather than to than environment. Ethical marketing should not be confused with government regulations brought into force to improve consumer welfare, such as reducing sulfur dioxide emissions to improve the quality of the air. A government regulation is a legal remedy intended to mitigate or correct an ethical issue, such as pollution of the air that we all share. Enlightened ethical marketing is at work when the company and marketer recognize further improvements for humankind unrelated to those enforced by governments or public opinion. By way of example, the Coop Group refuses to invest money in tobacco, fur and any countries with oppressive regimes. Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. Some areas of marketing ethics (ethics of advertising and promotion) overlap with media ethics. Eco-ethical marketing requires creativity and an openness to experimentation and learning from failure. While Arnold admits, This book is no rule book, here are 12 key tips from the approach: 1. People beats planet. Between people and planet, consumers are more likely to pay more for perceived human benefits, such as Fair Trade or proceeds benefiting charity, than environmental benefits, such as organic or low carbon footprint. Communitybased values are particularly compelling. 2. Values are a must. Consumers are looking for the ethos behind the brandconsumers want to know that a company isnt just driven by money, Arnold states. Gone are the days when profit as sole motivator could fly. 3. Heartstrings win over logic. Consumers respond to emotional angles more than rational ones. Luckily, ethical and environmental aspects can be highly emotive, so make sure to position them that way. 4. Honesty is king. Make an honest gesture about where you are even if youre still working to become green people will appreciate your honesty. For Gods sake, dont greenwash. 5. Get creative with your packaging. Make your products packaging a selling point, or design a second life into the packaging so that consumers can continue to use the

package for another purpose once they get it home. (While youre at it, design a second life for your product.) 6. People dont trust ads. Use channels other than advertising to communicate with your audience. 7. Action speaks louder than words. Spend money on making a great product rather than marketing it. 8. Market the ease of the green or ethical aspects of your product. People are lazy. 9. Beware of market research. Basing a marketing campaign on statistics is a dangerous trap, given that market research is often flawed. For example, people cannot be relied on to answer truthfully about how they would act in a situation. 10. Balance ethical and traditional values. Products dont sell on ethics alone. Arnold advises choosing the 1 or 2 key ethical values and blending them with the key traditional values (such as value and quality). 11. Choose your words wisely different words elicit different impressions from different people. 12. Maintain coherent messaging across the company. If a companys marketing campaigns send conflicting messages, no one wins

Question -30. What is the market approach to consumer protection on ethical dimensions? Answer:
Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. Some areas of marketing ethics (ethics of advertising and promotion) overlap with media ethics. Market Approach to Consumer Protection: Consumer safely is seen as a good that is most efficiently provided through the mechanism of the free market whereby sellers must respond to consumer demands. Problems with the Assumption of Full Information:

Many products are too complex for consumers to understand Markets cannot provide consumers with product information. Free Riders:

individuals who enjoy the benefits of a good without paying their share of its costs. Rational Utility Maximizer: A person who has a well defined and consistent set of preferences, and who knows how personal choices will affect those preferences.

Problems with the Assumption of Rational Utility Maximization:

Few people are good at estimating probabilities. People are irrational and inconsistent when weighing choices. Many consumer markets are monopolies or oligopolies.

Contract View of The Firms Duties to its Customers: The view that the relationship between a business firm and its customers is relationship, and the firms moral duties to the customer are those created by this contractual relationships. Reliability: The probability that a product will function as the consumer is led to expect that it will function. Service Life: The period of time during which the product will function as effectively as the consumer is to led to expect it to function. Maintainability: The ease with which the product can be repaired and kept in operating condition. Product Safety: The degree of risk associated with using a product. Moral Duties to Consumers Under Contractual Theory:

Duty to comply with express and implied claims of reliability, service life, maintainability, and safety. Duty of disclosure Duty not to misrepresent Duty not to coerce Due Care Theory of the Manufacturers Duties to Consumers:

The view that because manufacturers are in more advantaged position, they have a duty to take special care to ensure that consumers interests are not harmed by the products that they offer them. Caveat Emptor: Let the buyer take care.

Caveat Vendor: Let the seller take care. Areas of Producer Responsibility According to Due Care Theory:

Design Production Information Social Costs View of the Manufacturers Duties to Consumers:

The view that a manufacturer should pay the costs of any injuries sustained through any defects in the product, even when the manufacturer exercised all due care in the design and manufacture of the product and has taken all reasonable precautions to warn users of every foreseen danger.

Manufacturer should pay the costs of all injuries caused by defect in a product even if exercised due care. Argues that injuries are external costs that should be internalized.

Strict Liability: A legal doctrine that holds that manufacturers must bear the costs of injuries resulting from product defects regardless of fault. Criticisms Of The Social Cost View:

Unfair to manufacturers since it forces them to compensate unforeseeable injuries. Assumption that adherence to the social cost view will prevent accidents is false. Leads to successful consumer lawsuits in cases where manufacturers took all due care. Commercial Advertising:

Communication between a seller and potential buyers that is publicly addressed to a mass audience and is intended to induce members of this audience to buy the sellers products.

Public communication aimed at mass audience Intended to induce members of its audience to buy the Sellerss products Succeeds by creating a desire for the sellers product or a belief that a product will satisfy a pre existing desire.

Production Costs: The costs of the resources consumed in producing or improving a product. Selling Costs:

The additional costs of resources that do not go into changing the product, but are invested instead in getting people to buy the product. Deceptive Advertising:

Is a function of the authors intent to make the audience believe what is known to be false. OR a function of The medias communication of the false message. OR a function of The audiences vulnerability to deception. Right to Privacy:

The right of persons to determine what, to whom, and how much information about themselves will be disclosed to other parties. Psychological Privacy: Privacy with respect to a persons inner life. Physical Privacy: Privacy with respect to a persons physical activities. Importance of Privacy:

Protects individuals from interference, shame, embarrassment, hurting loved ones, selfincrimination Enables the development of personal relationships,professional relationships, distinct social roles and self determination.

Question-31. What is Advertising Standard Council of India and what is its role in Consumer Protection? Answer:
Advertising Standards Council of India (ASCI) is a self-regulatory voluntary organization of the advertising industry. Origin Like other countries around the world, India too has a self regulatory organization (SRO) for advertising content The Advertising Standards Council of India, ASCI founded in 1985. The three main constituents of advertising industry viz advertisers, advertising agencies and media came together to form this independent NGO. The aim of ASCI is to maintain and enhance the public's confidence in advertising. Their mandate is that all advertising material must be truthful, legal and honest, decent and not objectify women, safe for consumers especially children and last but not the least, fair to their competitors.

Members of ASCI ASCIs team consists of the Board of Governors, the Consumer Complaints Council (CCC) and its Secretariat. ASCI has 12 members in its the Board of Governors, four each representing the key sectors such as Advertisers, advertising agencies, media and allied professions such as market research, consulting, business education etc. The CCC currently has about 21 members: 9 are from within the industry and 12 are from the civil society like well-known doctors, lawyers, journalists, academicians, consumer activists, etc. The CCCs decision on complaint against any ad is final. ASCI also has its own independent Secretariat of 5 members which is headed by the Secretary General. There is no other non governmental body in India which regulates the advertising content that is released in India. If an ad that is released in India seems objectionable, a person can write to ASCI with their complaint. This complaint will be deliberated on by the CCC after providing due process to advertiser to defend the ad against the complaint and depending on whether the ad is in alignment with the ASCI code and law of the land, the complaint is upheld or not upheld and if upheld then the ad is voluntarily either withdrawn or modified. In 2007, the Government of India amended the Cable TV Network Rules Advertising Code by which ads which violate ASCI code cannot be permitted on TV. Self-Regulation Almost all professional fields have self regulatory bodies governing their activities. For the advertising fraternity, until 1985 there was none. Due to this there was a lot of false, misleading and offensive advertising. This led to consumers losing faith in advertising and hence resenting it. It was decided that if this continued it would not take time for statutory regulations such as censorship to be imposed on advertising content. In 1985, ASCI to be imposed on advertisers and advertising agencies. This would make fair, truthful and decent advertising almost impossible which would in turn hinder the industrys ability to compete and grow. In 1985, the ASCI adopted a Code for Self-Regulation in Advertising. With the introduction of the code, the aim is to promote honest and decent advertising and fair competition in the industry. It will also ensure the protection of consumer interests and the all concerned with the ad industry - advertisers, media, advertising agencies and others who help in the creation or placement of advertisements. As the fraternity starts accepting the code, it will result in fewer false claims, fewer unfair advertisements and increased respect for advertisers. [ Need for ASCI When an advertiser is creating an ad, the consumer is his audience. The feedback from a consumer is important to the advertiser so he can be assured if his message has been correctly conveyed. If a consumer feels that a particular advertisement is in bad taste or is false in its claims, they need a body or council to whom they can air their grievances and who will take any appropriate action, if necessary. ASCI as a self regulatory body governing advertising

content is the ideal medium as its purpose is to serve both the advertisers as well as the consumers. Role & Function of ASCI The Role and Functioning of the ASCI & its Consumer Complaints Council (CCC) in dealing with Complaints received from Consumers and Industry, against Ads which are considered as False, Misleading, Indecent, Illegal, leading to Unsafe practices, or Unfair to competition, and consequently in contravention of the ASCI Code for Self-Regulation in Advertising. ASCI is a voluntary self-regulatory council, registered as a not-for-profit Company under section 25 of the Indian Cos. Act. The sponsors of the ASCI, who are its principal members, are firms of considerable repute within Industry in India, and comprise Advertisers, Media, Ad. Agencies and other Professional or Ancillary services connected with advertising practice. The ASCI is not a Government body, nor does it formulate rules for the public or for the relevant industries. The Purpose and the Mission of the ASCI is spelt out clearly in the literature provided. You will appreciate that if an AD is to be reviewed for its likely impact on the sensibilities of individual viewers of TV, or readers of press publications, we require to convey to the Advertiser concerned, the substantial issues raised in the complaint, in the exact context of the specific Ad, as conveyed by the perception of the complainant, and to elicit the appropriate response by way of comments from the Advertiser. Only then will the CCC, of the ASCI, be in a position to deliberate meaningfully on the issues involved, and to arrive at a fair and objective conclusion, which would stand the scrutiny of all concerned with the right to freedom of expression, and the freedom of consumers to choose the products or services made available to them in the market-place. For this we require in each case a clearly readable copy or clipping of the Ad under complaint, with full particulars of name and date of publication, or a printout of an Ad or promotion on a Website or in case of a T.V. Commercial, the channel, date and time or programme of airing, and a description of the contents of the TVC, along with a hard copy of the complete complaint preferably signed by the complainant. As a policy we do not disclose the identity of the complainant to the Advertiser. The ASCI receives and processes complaints against Ads, from a cross section of consumers, the general public and Industry, in the interests of all those who rely on advertising as a commercial communication, and this covers individuals, practitioners in advertising, advertiser firms, media, ad. agencies, and ancillary services connected with advertising. In the case of complaints which were Upheld by the CCC, during the past year, it may interest you to know that over 80% of such Ads have been withdrawn or modified appropriately by the Advertisers or Agencies involved, and the concerned Media have also confirmed that they would not carry such offending Ads or TVC.

Question-32 What is Consumer Awareness? What are the causes of Low level of Consumer awareness in India? June, 2010 Answer:
Consumer Awareness Anyone who consumes goods is a consumer. Consumers get exploited in the market. They respond to advertisements and buy goods. Generally advertisements do not give all the information that a consumer needs to know or wants to know about a product. Some of the common methods of exploitation are 1. Under weight and under measurements -not measured or weighed correctly 2. Substandard Quality -defective home appliances and medicines beyond expiry date 3. High prices-charging above the retail price 4. Duplicate Articles-selling fake items in the name of the original 5. Adulteration and Impurity-is done to get higher profits 6. Lack of safety Devices-absence of inbuilt safeguards in appliances 7. Artificial Scarcity-hoarding and black marketing 8. False and Incomplete Information-misleading information on quality, durability, and safety. 9. Unsatisfactory after sales Service-high cost items like eletronics and cars require constant and regular service. 10. Rough behaviour and Undue conditions-harassment in getting LPG connection or a telephone connection.. Factors causing exploitation of Consumers. Limited Information-providing full and correct information will help in the choice Limited Supplies-when goods and services are in short supply then price shoots up Limited Competition.-single producer may manipulate the market in terms of price and stocks. Low Literacy.-illiteracy leads to exploitation.Hence Consumer Awareness is essential. Rise of consumer Awareness Kautilya was one of the earliest to write in his Arthasastra about the need for Consumer awareness and protection. With the growth of private sector there is a greater need for discipline and regulation of the market. Consumers must be aware of the sale and purchase of goods, the health and security aspects also. Ensuring the safety of food items sold in the market is essential these days. Legal measures for consumer safety and consumer awareness must be uniform, and transparent in terms of prices, quality of goods, and stocks. Consumers must have the tools to combat malpractices and protect their rights. Rights and Duties of Consumers As codified under the Indian Laws the Consumers have the following Rights

1. 2. 3. 4.

1. 2. 3. 4. 5.

Right to Safety-to protect against hazardous goods Right to be Informed-about price, quality, purity Right to Choose-access to a variety of goods and services at competitive prices. Right to be Heard-consumers interest and welfare must be taken care of Right to seek Redressal-protection against unfair trade practicesand settling genuine grievances. 6. Right to Consumer Education.-Kowledge about goods and issues related to consumers. Duties Get a bill for every important purchase and also the Warranty card Check the ISI mark or Agmark on the goods Form consumer awareness groups Make a complaint on genuine grievances. Consumers must know to exercise their rights. Consumer protection Measure 1. Legislation concerning Consumer Rights. The Consumer Protection Act 1986 provides for consumer disputes redressal at the state and national level. With the help of this law the agencies can solve grievances in a speedy, simple and inexpensive manner. A separate department of consumer affairs was set up at the state and central government. A three tier system of consumer courts at the National, State and District levels were set up. These agencies have done good work by handling lakhs of cases. 2. Public Distribution System. To protect the poor from price rise and black marketing the government food security to the poor by supplying essentials through the ration or Fair price shops. 3. Standardisation of Products. These are done to assure the quality of products. The ISI stamp on goods is placed by the Bureau of Indian standards. This caters to industrial and consumer goods. These goods can be trusted to confirm to specific standards. Agmark is meant for Agricultural products. At the International level the International Organisation for Standardisation (ISO) located in Geneva sets common standards. The FAO and WHO provide food standards. Legal formalities for filing a complaint.

1. 2. 3. 4. 5.

The complaint can be written on plain paper. The supporting documents like the warranty card must be attached. A lawyer is not required. We can argue our case. Causes of Low Consumer Awareness In India In India, the concept of consumer protection is not new. References to the protection of consumers interest against exploitation by trade and industry, underweight and measurement, adulteration and punishment for these offences, were made in Kautilyas Arthashastra. However, an organized and systematic movement to safeguard the interest of consumers, is a recent phenomenon. The consumers have to be aware not only of the commercial aspects of sale and purchase of goods, but also of the health and security aspects. Food safety has become an important element of consumer awareness these days. In case of food products, its quality depends not only on its nutritional value, but also on its safety for human consumption. Consumption of contaminated or adulterated food is a major cause of human illness and suffering. This called for strong legal measures to ensure that the manufacturers and sellers observe uniformity and transparency in prices, stocks and quality of their goods.Enactment of Consumer Protection Act, 1986 was one of the most important steps taken to protect the interests of consumers. The provision of the Act came into force, with effect from July 1, 1987. The act recognizes consumers right to seek redresses and right to consumereducation. The salient features of the Act are as follows: Applies to all goods and services unless specifically exempted by the Union Government; Covers all the sectors whether private, public or cooperative; Enshrines the consumers rights related to safety, information, choice, representation and redress and consumer education. The act gives consumers an additional remedy besides those which may be available to them under the provisions of other existing laws and they are free to choose the remedy. Empower consumers seeking discontinuance of certain unfair and restrictive trade practices, defects or deficiencies in services and stopping in services or withdrawal of hazardous goods from the market. There are no legal formalities for filing the complaint. Suppose, you find yourself cheated by trader or a manufacturer and wish to make a complaint to consumer court, you can write the details on a plain paper. Attach the supporting documents, that is, guarantee or warrantee card

and cash memo with the complaint and submit it in the district consumer court. You do not have to go to any lawyer or professional for legal assistance. You yourself can plead the case in the consumer court.Since, the enactment of the Consumer Protection Act and even before that, newspapers and magazines have been responding to the needs of consumers. Apart from publishing articles, columns etc newspapers have also tried to come to the rescue of harassed consumers. The Indian Express was one of the first newspapers to start a consumer complaint column. There are 500 consumer associations, which are working in the field of consumer protection. They deal with various aspects of consumer exploitation. Some of the prominent ones are: Consumer Guidance Society of India, Mumbai; Citizens Action group, Mumbai; Common Cause, New Delhi; Voice, New Delhi; Consumer Utility and Trust Society, Jaipur. So next time you find yourself at the wrong end of a purchase dont just sit back and blame, go to a consumer court and make your claim.