The government is planning the most radical overhaul of key consumer laws in decades to keep pace with a changing marketplace – from botched online shopping experiences and shoddy haircuts at salons to exploding mobile phones.
The Ram Vilas Paswan-headed consumer affairs ministry has decided to amend the Consumer Protection Act 1986 to create a proposed National Consumer Protection Authority, aiming to update the country’s consumer protection laws in light of India’s new economy.
Indian consumers are increasingly buying newer goods and services not covered under current laws. For instance, there is no law yet for refunds in online shopping. What if you paid for a song download but ended up with an empty file? An early morning electric shock from a beard trimmer due to poor circuitry sounds funny, but there are no rules yet on product liability.
Several of the first-time provisions being envisaged will affect all businesses and may even force some firms to overhaul their systems and processes.
For the first time, the Bureau of Indian Standards – the country’s watchdog for product quality – will set up benchmarks for paid services, such as bus journeys, hotel packages and beauty clinics.
At present, the BIS Act 1980 covers just 90 products, most of which are industrial -- such as steel – that are rarely bought by individual customers.
Its basket is being expanded to include 2,000 items of common consumption. These include simple but life-saving equipment like a two-wheeler helmet, for which currently there are no prescribed quality standards.
“Class-action suits”, a legal tool, will now be extended to consumer laws, so that one individual complaint of a faulty product or service could be treated as an interest group of people in similar circumstances.
“There will be clear rules for recall of product, refund of product and return of product,” an official said.
The three-tier consumer-court system will continue but their process will be updated.
Currently, the district forum deals with consumer disputes where the value of the goods or the compensation claimed is less than Rs. 5 lakh and the state commission hears cases for claims exceeding Rs. 5 lakh but not exceeding Rs. 20 lakh. The national commission hears claims exceeding Rs. 20 lakh and also decides cases challenging lower court verdicts.
The official said a review showed there is no “authority of a federal nature” that deals with unfair trade practices. “All of this must be seen in light of the bigger countrywide picture as well as the Constitution, which in article 301 and 307 talks of a common national market,” the official said.