Power to buyer: Class action suits to be part of new consumer protection laws
A botched online purchase, a disappointing holiday or an exploding cellphone -- the country’s two main consumer laws are set for an overhaul to give buyers larger protection and improved services in a changed economy.business Updated: Jun 02, 2015 08:00 IST
A botched online purchase, a disappointing holiday or an exploding cellphone -- the country’s two main consumer laws are set for an overhaul to give buyers larger protection and improved services in a changed economy.
The Ram Vilas Paswan-headed consumer affairs ministry has finalised a set of amendments for creating a national consumer protection authority that will, for the first time, extend “class-action suits”, a legal tool, to consumer laws.
This means one individual complaint of a faulty product or service could be treated as that of a larger group of people, or “class”, in similar circumstances. “There will be clear rules for recall of product, refund of product and return of product,” an official said.The proposed changes would reflect the larger constitutional requirement envisaged in articles 301 and 307 that talk of a "common national market", another official said.
Given the scope of the amendments, there won’t be a business that won’t be affected. An empty file for a song that was paid for or a cellphone blowing up due to poor circuitry -- the changes will cover all.
Firms might even be required to overhaul their systems, processes and interaction with consumers.
The Bureau of Indian Standards Act, 1980, which enforces quality, will be amended to lay down standards for specific paid services, not just products. Typically, services include hotel amenities, bus journeys, holiday packages and beauty clinics.
The BIS act covers just 90 products, most of which are bought by bulk buyers, rather than individual consumers, such as steel. This basket will be expanded to include 2,000 items of common consumption, such as driving helmets, for which quality standards are not laid out.
A review by the consumer ministry showed there was no “authority of a federal nature” to deal with unfair trade practices.
At present, buyers take their complaints to consumer courts but these do not have investigation powers. The proposed regulator will plug the gap.
“The necessity for a national consumer protection authority has also arisen because there is no authority which can independently investigate charges of unfair trade practices in so far as consumer protection is concerned,” said Pradip Mehta, the secretary general of consumer advocacy group CUTS International.