- Why markets need rules, and the different ways sellers exploit consumers
- How the consumer movement grew in India, from consumers having to be careful on their own to a legal right to redressal
- The six consumer rights; four of them are illustrated by a real case (Reji Mathew, Amritha, Abirami, Prakash), while Representation and Consumer Education are explained without one
- How COPRA’s three-tier commission system works, and what changed in the 2019 amendment
- What ISI, Agmark, Hallmark and +F actually certify, and when using them is compulsory
- What is still holding the consumer movement back today
1The Consumer in the Marketplace
Every one of us plays two roles in the market. As producers, we work in
agriculture, industry or services to make goods and provide services. As
consumers, we buy and use the final goods and services that other
people have produced. This chapter looks at the market from that second
role: the buyer’s side.
An individual consumer buying one shirt or one kilogram of rice is in a
weak position compared to the seller. Once a sale is completed, many sellers
behave as if their responsibility has ended: “if you didn’t like what you
bought, please go elsewhere.” Rules and regulations exist precisely to stop this. The same principle
protects workers in the unorganised sector from unfair conditions, and
borrowers from unfair moneylenders: markets left to themselves favour whoever
holds more power in the deal.
The consumer movement arose out of the dissatisfaction of
consumers, as many unfair practices were being indulged in by the sellers.
It is an effort to change the situation in which the seller tries to shift
all the responsibility on to the buyer.
1.1 How consumers are exploited
Exploitation in the marketplace happens in several concrete ways, and the
book gives an example of each:
Under-weighing
Shopkeepers weigh out less than what they are paid for.
Hidden charges
Traders add charges to a bill that were never mentioned before the sale.
Adulterated or defective goods
Selling goods that are mixed with something inferior, or simply faulty.
False advertising
Passing on false information through the media to attract buyers.
Two real examples the book gives for false advertising: a company sold
powder milk for babies all over the world for years as “the most scientific
product”, claiming it to be better than mother’s milk, and it took years of
struggle before the company was forced to accept that it had been making false
claims. Similarly, a long battle had to be fought with court cases to make
cigarette-manufacturing companies accept that their product could cause
cancer.
A question may ask you to mention factors that cause exploitation of
consumers. Give under-weighing, hidden charges, adulteration/defective
goods and false advertising as four separate, named points, not one
merged sentence.
Markets are especially unfair to consumers when producers are few and
powerful whereas consumers purchase in small amounts and are
scattered. This happens especially when large companies are producing
these goods: companies with huge wealth, power and reach can manipulate the
market in various ways, and at times false information is passed on through
the media and other sources to attract consumers.
2The Consumer Movement in India
For a long time, when a consumer was not happy with a particular brand
product or shop, he or she generally avoided buying that brand product, or
would stop purchasing from that shop. There was no legal system available to
protect consumers from exploitation, and it was presumed that it was the
responsibility of consumers to be careful while buying a commodity or
service. It took many years for organisations in India and around the world
to create awareness, and this has also shifted the responsibility of ensuring
the quality of goods and services on to the sellers.
In India, the consumer movement arose as a “social force” out of
the necessity of protecting consumers against unethical and unfair trade
practices. It took organised shape in the 1960s, driven by rampant
food shortages, hoarding, black marketing and the adulteration of food and
edible oil.
Till the 1970s, consumer organisations were mostly engaged in writing
articles and holding exhibitions. They went on to form consumer groups that
looked into malpractices in ration shops and overcrowding in road passenger
transport. More recently, India has seen a sharp rise in the number of such
groups.
In 1985 the United Nations adopted the UN Guidelines for
Consumer Protection, a tool nations could use to protect consumers,
and consumer groups could use to press their own governments. At the
international level this became the foundation of the consumer movement.
Today, Consumers International is an umbrella body of over
200 member organisations from over 100 countries.
These efforts built enough pressure on businesses and government that, in
1986, the Indian government enacted the Consumer Protection Act,
1986, popularly known as COPRA. The book calls this “a major
step” taken by the Indian government; the Act was amended in 2019.
3The Six Consumer Rights
COPRA guarantees consumers six specific rights. Four of them (safety,
information, choice and redressal) are best remembered through the real case
that illustrates each.
3.1 Right to Safety
Right to Safety: as consumers, we have the right to be
protected against the marketing of goods and delivery of services that
are hazardous to life and property. Producers must strictly follow
required safety rules and regulations.
Reji Mathew, a healthy Class IX student in Kerala, was admitted to a
private clinic for a tonsillectomy. Improper anaesthesia during the
operation left him showing symptoms of some brain abnormalities, and he was crippled for life. His
father claimed ₹5,00,000 compensation in the State Consumer Disputes
Redressal Commission for medical negligence; the State Commission dismissed
it, saying the evidence was insufficient. On appeal, the National
Consumer Disputes Redressal Commission held the hospital responsible
for medical negligence and directed it to pay the compensation.
Everyday example: a pressure cooker’s safety valve, if defective, can
cause a serious accident. Manufacturers must maintain high quality, and
public or government action is needed to see that this quality is
maintained.
3.2 Right to Information
Right to Information: consumers have the right to be informed
about the particulars of the goods and services they purchase:
ingredients, price, batch number, date of manufacture, expiry date and the
manufacturer’s address, so they can complain or ask for compensation or
replacement if the product turns out to be defective.
This is why medicine packets carry “directions for proper use” and side
effects, and garments carry “instructions for washing.” If an expiry date is
not printed, the manufacturer can refuse responsibility and blame the
shopkeeper instead, which is exactly why the rule exists. MRP
(maximum retail price) is part of the same right: a consumer can protest if
charged above the printed MRP, and can even bargain to buy below it.
In October 2005 this right was extended to government services through
the RTI (Right to Information) Act, which ensures citizens
information about the functioning of government departments.
Amritha, an engineering graduate, submitted certificates and attended an
interview for a government job but received no news of the result, and
officials would not answer her queries. She filed an RTI application
saying it was her right to know the result within a reasonable time. She
was informed of the reason for the delay, and also received her call
letter, since she had in fact performed well in the interview.
3.3 Right to Choice
Right to Choice: any consumer who receives a service, in
whatever capacity, regardless of age, gender and nature of service, has
the right to choose whether to continue to receive the service.
Abirami joined a two-year professional course at a coaching institute in
New Delhi and paid the full fee, ₹61,020, as a lump sum in advance.
After one year she found the teaching was not up to the mark and asked for
a refund of the second year’s fee: the institute refused. The District
Consumer Disputes Redressal Commission ordered the institute to refund
₹28,000, ruling that she had the right to choose. On the
institute’s appeal, the State Commission upheld this and additionally
fined the institute ₹25,000 for a frivolous appeal, plus
₹7,000 as compensation and litigation cost. The State Commission
also barred all the educational and professional institutions in the state from charging fees
for an entire course in advance, in one go.
The book’s everyday examples of choice being denied: a shopkeeper who
will sell toothpaste only if you also buy a toothbrush, or a gas dealer who
insists you buy the stove from them when you take a new connection. In this
way you may be forced to buy things you do not wish to, and are left with no
choice.
3.4 Right to Redressal
Right to Redressal: consumers have the right to seek redressal
against unfair trade practices and exploitation. If a consumer is damaged
in any way, they have the right to compensation depending on the degree of
the damage, and there must be an easy, effective public system for this.
Prakash sent a money order to his village for his daughter’s marriage.
It did not reach her when she needed it, nor months later. When the post
office would not respond to his queries, he took his case, step by step,
to a district-level Consumer Disputes Redressal Commission in New Delhi.
A consumer can file such a complaint on their own, with or without a
lawyer, individually or as a group (a class action suit), and can
do so in person, through the internet, or attend hearings by video
conferencing.
3.5 Right to Representation
Right to Representation: COPRA has enabled consumers to be
represented in the Consumer Disputes Redressal Commissions: either
directly, or through consumer forums and protection councils that guide
and represent individual consumers before these commissions.
These voluntary organisations, locally called consumer forums or
consumer protection councils, receive government financial support to
create awareness. Even a residential colony’s Residents’ Welfare
Association can take up a case on its members’ behalf against unfair trade
practices.
3.6 Right to Consumer Education
Right to Consumer Education: consumers must become conscious of
their rights so they can distinguish between products and make informed
choices. COPRA led to separate Departments of Consumer Affairs in the
central and state governments, which spread this awareness through
posters and advertisements.
The book discusses this right in its section “Learning to become
well-informed consumers”. It gives no case story for it, unlike safety,
information, choice and redressal.
4The Redressal Machinery: District, State, National
Under COPRA, a three-tier quasi-judicial machinery was set up to hear
consumer disputes, at the district, state and national level.
| Commission | Handles claims of | If the case is dismissed |
|---|---|---|
| District Consumer Disputes Redressal Commission | Up to ₹1 crore | Consumer can appeal to the State Commission |
| State Commission | Between ₹1 crore and ₹10 crore | Consumer can appeal to the National Commission |
| National Commission | Exceeding ₹10 crore | Highest level of appeal |
Remember the limits in order of size: District
goes up to ₹1 crore, State sits between ₹1 crore and ₹10 crore, National
starts above ₹10 crore.
4.1 The 2019 amendment
COPRA was amended in 2019 to strengthen consumers further:
Online purchases covered
Buying through the internet is now explicitly included under the Act.
Manufacturer/service provider liable
For a deficient service or defective product, the manufacturer or
service provider is also held responsible, and can be penalised or even
imprisoned.
Mediator option
Settlement of disputes with the help of a neutral intermediary
outside the Commission, called a mediator, is now encouraged at
all three tiers.
5Certification Marks
When you buy many commodities, you may notice a logo on the cover: ISI,
Agmark, Hallmark or +F. These certifications reassure a consumer of quality;
organisations that monitor them allow producers to use their logo only if
they follow certain quality standards.
| Mark | Certifies |
|---|---|
| ISI | Industrial products that meet the quality and safety standards of the Bureau of Indian Standards (BIS), the “agency that develop standards for goods and services” in Exercise 12 (the chapter names the ISI logo but not what it covers) |
| Agmark | Agricultural products such as edible oil and cereals |
| Hallmark | Standardisation of the quality of jewellery |
| +F | Food fortification: addition of key nutrients to staple foods |
Following these standards is not compulsory for all producers.
Certification is mandatory only for some products that affect the health
and safety of consumers or are of mass consumption, such as LPG cylinders,
food colours and additives, cement and packaged drinking water.
6Taking the Consumer Movement Forward
India observes 24 December as National Consumers’ Day, marking the
day Parliament enacted COPRA in 1986. India is one of the countries that have
exclusive authority for consumer redressal.
Even so, the redressal process is becoming cumbersome, expensive and time
consuming: consumers often need lawyers, cash memos are frequently not
issued for small retail purchases, so evidence is hard to gather. Beyond the
courtroom, enforcement of laws protecting workers, especially in the
unorganised sector, remains weak, and market rules and regulations are
often simply not followed.
It is often said that consumer movements can be effective only with the
consumers’ active involvement. It requires a voluntary effort and struggle
involving the participation of one and all.
the chapter’s closing lines
- Can I name all six consumer rights, and match the four rights that have a case to their cases?
- Can I state the three redressal tiers with their exact money limits?
- Can I explain what changed in the 2019 amendment to COPRA?
- Can I tell ISI, Agmark, Hallmark and +F apart by what each certifies?
- Consumers are exploited by under-weighing, hidden charges, adulteration/defective goods and false advertising
- Consumer movement began organised form in the 1960s; COPRA enacted 1986, amended 2019
- Six rights: Safety (Reji Mathew), Information (Amritha/RTI), Choice (Abirami), Redressal (Prakash), Representation, Consumer Education
- District (up to ₹1 crore) → State (₹1-10 crore) → National (above ₹10 crore); appeal moves up the ladder
- 2019 amendment: online purchases covered, manufacturer/service provider liable, mediator option added
- ISI, Agmark, Hallmark, +F certify quality; certification is mandatory only for some health/safety/mass-consumption goods
- 24 December = National Consumers’ Day; 2000+ consumer groups exist but only 50-60 are well organised
- 1 markName the Act popularly known as COPRA, and the year it was enacted.
- 1 markWhich day is observed as National Consumers’ Day, and why?
- 3 marksGive three ways in which consumers are exploited in the marketplace, with an example of each.
- 3 marksWhat changes did the 2019 amendment bring to COPRA?
- 4 marksDescribe the three-tier redressal machinery under COPRA, with the monetary limits of each commission.
- 6 marksExplain any four of the six consumer rights; for Safety, Information, Choice or Redressal, use the case given in your notes.