CBSE Class 12 Business Studies Consumer Protection Notes

8. Quality life for Consumer Importance of Consumer Protection is to aim at redressal of consumer complaints in an effective manner but also on giving good-quality life to consumers by business organizations who have defaulted on the other side and make sure that justice is done to final consumers.

9. Ethical Obligations Importance of consumer protection, Today ethics play a prominent role in business. Business without ethical values is nothing but a criminal activity. Protecting the interests of the consumer includes absence of unfair business practices such as black marketing, profiteering, creating an artificial shortage, using wrong weights and measures, publishing false advertisement, etc. It is necessary for a businessman not to practice such uneven means thereby protect the interest of consumers.

10. Getting Public Support Importance of consumer protection does not isolate the business. Financial institutions and banks provide finance to business. Government provides support and incentives. Employees contribute their time, skill and labour. Consumers are ready to pay for value. The businessmen can get the best support of all these parties only when it stops exploiting its customers. To conclude, the importance of Consumer Protection is to safeguard consumers from any kind of exploitation from business organizations and ensuring the position of ‘King of Market’ to consumer.

NEED OF CUSTOMER PROTECTION The necessity of adopting measures to protect the interest of consumers arises mainly due to the helpless position of the consumers. There is no denying fact that the consumers have the basic right to be protected from the loss or injury caused on account of defective goods and deficiency of services. But they hardly use their rights due to lack of awareness, ignorance or lethargic attitude. However in view of the prevailing malpractices and their vulnerability there to, it is necessary to provide them physical safety, protection of economic interests, access to information, satisfactory product standard, and statutory measures for redressal of their grievances.

The other main arguments in favour of consumer protection are as follows:

(a) 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.

(b) 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.

(c) 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.

(d) 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.

(e) 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.

(f) 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.

RIGHT TO CUSTOMER F, Kennedy, the former USA President, in his message to consumer had given six rights to consumers. These rights are (i) right to safety, (ii) right to be informed, (iii) right to choose, (iv) right to be heard, (v) right to redress and (vi) 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.

(a) 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.

(b) 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.

(c) 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.

(d) 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.

(e) 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 / replaced by the seller/ 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.

(f) 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, labeling, etc.

RESPONSIBILITIES OF CONSUMER

(a) Be quality conscious To put a stop to adulteration and corrupt practices of the manufacturers and traders, it is the duty of every consumer to be conscious of the quality of product they buy. They should look for the standard quality certification marks like ISI, Agmark, FPO, Woolmark, Ecomark, Hallmark etc. while making the purchases.

(b) Beware of misleading advertisements The advertisement often exaggerates the quality of products. Hence, the consumers should not rely on the advertisement and carefully check the product or ask the users before making a purchase. Incase there are discrepancies, the same should be brought to the notice of the sponsors and the appropriate authority, if need be.

(c) Responsibility to inspect a variety of goods before making selection The consumer should inspect a variety of goods before buying the goods and service. For this purpose he/she should compare their quality, price, durability, after sales service etc. This would enable the consumers to make the best choice within the limit of their own resources. 

(d) Collect proof of transaction The consumer should insist on a valid documentary evidence (cash memo/invoice) relating to purchase of goods or availing of any services and preserve it carefully. Such proof of purchase is required for filing a complaint. In case of durable goods the manufactures generally provide the warrantee/guarantee card along with the product. It is the duty of consumers to obtain these documents and ensure that these are duly signed, stamped and dated. The consumer must preserve them till the warrantee/ guarantee period is over.

(e) Consumers must be aware of their rights The consumers must be aware of their rights as stated above and exercise them while buying goods and services. For example, it is the responsibility of a consumer to insist on getting all information about the quality of the product and ensure himself/ herself that it is free from any kind of defects.

(f) Complaint for genuine grievances As a consumer if you are dissatisfied with the product/services, you can ask for redressal of your grievances. In this regard, you must file a proper claim with the company first. If the manufacturer/company does not respond, then you can approach the forums. But your claim must state actual loss and the compensation claim must be reasonable. At no cost fictitious complaints should be filed otherwise the forum may penalise you.

(g) Proper use of product/services It is expected from the consumers that they use and handle the product/services properly. It has been noticed that during guarantee period, people tend to reckless use of the product, thinking that it will be replaced during the guarantee period. This practice should be avoided.

WAY 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. Infact, 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 Indi

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 user's grievances on the spot.

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.

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.

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.

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. 

Quality mark - AGMARK

Rights of A Consumer

Six rights provided by CPA 1986.
1. Right to Safety : Means the right to be protected against products, production processes & services which are hazardown to life (should use ISI marked electric products)
2. Right to be informed : Right to have complete information about the product before buying.
3. Right to choose ; Right to choose from a variety of products at competitive prices.
4. Right to be heard : Right to file a complaint & to be heard in case of dissatisfaction with goods or services (use of grievance cell)
5. Right to Seek Redressal : Right to get relief in case the product or service falls short of his expectations. e.g. replacement / removal of defect / compensation for any loss.
6. Right to consumer education : Right to acquire knowledge & to be well informed consumer throughout life. IGNOU has devised a syllabus for distant education on consumer protection.

Responsibilities / Duties of a Consumer
1. Consumer must exercise his right : Consumer must be aware of their rights with regard to the product or services they buy from the market.
2. Consumer must be a cautions consumer : While buying a product or services, a consumer should read labels carefully to learn about its every minute detail.
3. Consumer must file a complaint in a appropriate forum in case of any shortcoming in product / service availed.
4. Conumer must insist on cash memo ; i.e. a proof of purchase & required to file a complaint.
5. Consumer must be a quality conscious : He should ask / look for ISI mark on electric goods. FPO mark on food products, Hall mark on jewellery etc.
6. Consumer must bring the discrepancy in the advertisiment to the notic of the sponsor.

Ways And Means of Consumer Protection.

1. Government : Protcts the interest of consumers by enacting various legislations like CPA 1986, Sale of goods Act 1930,Bureu of Indian Standard 1986 etc. Consumer Protection Act provides for a three-tier machienery at the district, state & national level for speedy & inexpensive redrenal of consumer grievances.

2. Consumer Organisation : Force business firms to avoid malpractices & explotation of consumers.
e.g. Consumer coordination council, Delhi.
ii) Common cause, Delhi
iii) Consumers Association, Kolkata.iv) M
umbai Grahak Panchyat Mumbai etc.

3. Business Association : The associations of trade, commerce & business like federation of Indian Chambers of commerce (FICCI) & Confederation of Indian Industries (CIL) have laid down their code of conduct for their members in their dealings with the customers.

The Salient Features and Provisions of Consumer Protection Act, 1986

A. Why was consumer protection act, 1986 was enacted
- To protect & promote the interests of the cousumers by recognising consumers right (all six rights)

B. Who is a ‘consumer’ according to the CPA 1986
- A person who uses or consumer goods or avails any of service for a consideration.
- It does not include those who obtain goods for re-sale or any commercial purposes.

C. Under what circumstances complaints can be filed ?
- Frandulent practices of traders & manufactures.
- Goods are defective
- Any deficiency in the services hired.

D. Redressal agencies under the consumer Protection Act 1986.
- District forum
- State Commission
- National commission

E. Relief / Remedies available to a consumer under CPA 1986.
- Remove the defect in goods / deficiency in services.
- Replace defective product with new, defect free.- Ref
und the price paid.
- Issue connective advertisement to neutrilize the effect of misleading advertisement.

F. With in what period the complaint must be filed ?
With in 3 months of purchase & if some testing of goods is required then with in 5 months.

G. Who can file a complaint.
- Any consumer
- Any registered consumer association.
- Central / State Govts.
- Legal heir / representation of a a deceased customer.

Role and Functions of Consumer Organisation & NGOs.
- Educating the general public about consumer right.
- Publishing periodeial & other publications.
- Providing Legal assistance to consumers.
- Producing films or cassettes on food adultration misuse of drugs etc.

Important Questions :

1. What are the two aspect of consumer prolection?
(Hint - Educating consumers & Redrerral of their grievances)

2. Give one example of consumer exploitation?
(unsafe products / Black marketing)

3. Name any two legitalations which provide protection to consumers
(Hint : (i) CPA 1986, The Essential Commodities Act 1955)

4. Mention any two ways & means of consumer protection.
(Hint - Consumer organisation & Govt.)

5. Which mark is issued under the Bureau of Indian Standard Act 1986 ?
(Hint : ISI)

3/4 Marks Questions

6. Explain the role of Universities & schools in counsumer protection?

7. Explain briefly the salient features of consumer protection Act 1986?

Syllabus Linkage:

Manufacturer Wholesaler Retailer Consumer Protection

CONCEPT MAPPING:

• Concept and Importance of consumer protection 

• Consumer Protection Act 1986
√ Meaning of consumer and consumer protection.
√ Rights and Responsibilities of consumers.
√  Who can file a complaint and against whom?
√ Redressal machinery
√ Remedies available

• Consumer awareness ‐ Role of consumer organization and NGO’s

KEY CONCEPTS IN NUTSHELL
Meaning: Consumer protection refers to protecting the consumer against anti‐consumer trade practices by the producers or sellers.

IMPROTANCE OF CONSUMER PROTECTION
1.Business is a means of human welfare
2. Growth with social justice
3.Single vs Multiple objectives fication.
4. Stake holders of society / moral justi / social responsibility
5. Power centre
6. Self interest ns
7. Ethical obligatio
8. Public support
9. Consumer is the purpose of the business long‐term interest of business

CONUSMER RIGHTS:
1.Right to safety med
2.Right to be infor
3.Right to choose
4. Right to be heard
5. Right to seek Redressal
 6. Right to Consumer Education

CONUSMER PROTECTION ACT 1986:
a) Under this Act, remedies available to consumers are as follows :
1. Removal of Defects Goods
2. Replacement of
3. Refund of Price
4. Award of compensation
5. Removal of Deficiency in service
6. Discontinuous of unfair / Restrictive Trade practice

CONUSMER RESPONSIBILITIES
1. Consumer must exercise his rights: They must be aware of their rights while buying. R
2. Consmers should buy only standard goods like ISI/AGMA K goods only.
3. Filing complaint for the redressal of genuine grievances. .
4. Consumer must be quality conscious / should not compromise on quality d services.
5. Consumers shluld learn the risks associated with products an e / Warranty Card.
6. Do not forget to get receipt and Guarante
7. Consumers should read labels carefully.
8. Consumers should be honest in their dealings. They should buy only legal boods.
9. Consumers should respect environment. Avoid waste, littering and contributing to pollution.
10. Consumers should form consumer societies.

Ways and Means of Consumer protection

a) Self regulation by business: Every firm insists to have a strong consumer base which means that more and still move people should buy their products. This is possible only when the consumers are fully satisfied with the products of the firm.
b) Business Associations: Business associations prepare a code of conduct for businessmen.
c) Consumer Awareness : Cosumer should protect himself
d) Consumer organizations: these organizations can force business firms to avoid malpractices and exploitation of consumers. e) Government: Interests of the consumers are protected by the government by enacting various legislations. Consumer protection Act 1986 is an important legislation by the government to provide protection to the affected consumer.

Various remedies available to the consumers for redressing their grievances under the consumer protection Act 1986.

a) District forum: According to consumer protection Act state goverup one or more district forum in each district.

1) District forum hears disputes involving a sum upto Rs. 20 Lacs.
2) It can file appeal against it with the state commission within 30 days.

b)State commission:

c) 1) State commission redresses grievances involving a sum exceeds Rs. 20 lacs and upto Rs. 1 crore.

2) It can file an appeal before the national commission within 30 days.

d) National commission :

e)1) It is appointed by the Central Government

2) It has the jurisdiction to hear complaints involving a sum exceeding Rs. 1 crore.

3) It can file an appeal with the Supreme Court within 30 days

ROLE of Consumer Organisaotions and NonGovernment Organisations (NGO’s)
1.  Education Consumers cts and Testing them
2. Collecting data on different produ
3. Filing suit on belief if consumers
4. Helping Educational institutions
5. Promoting network of consumer association.

6. Extending support to Government NGOs : Non‐Government Organisations are those organizations which aim at promoting the welfare of the people with non‐profit concept. They are taking up various aspects of conmsuer exploitation. rdinating councils
a) Consumer co‐coo
b)Role of the press
c) Role of Universities / Schools 

Legal protection to consumers:
a) The Consumer Protection Act 1986
b) The Contract Act 1982
c) The Sale of Goods Act 1930
d) The Essen tial Commodities Act 1955 937
e) he Agricultural produce (Grading and Marketing) Act 1
f) The Prevention of Food Adulteration Act 1954 nd Measures Act 1976
g) The Standards of Weights a
h) The Trade Marks Act 1999
i) The Competition Act 2002
j) The Bureau of Indian Standards Act 1986.

Consumer Protection: Concept, Consumer Protection Act 1986: Meaning of consumer Rights and responsibilities of consumers Who can file a complaint? Redressal machinery ,Remedies available. 

Please click on below link to download CBSE Class 12 Business Administration Consumer Protection Notes