Consumer prortection

Introduction
In regulatory jurisdictions that provide for this (a list including most or all developed
countries with free market economies) consumer protection is a group of laws and organizations
designed to ensure the rights of consumers, as well as fair trade, competition, and accurate
information in the marketplace. The laws are designed to prevent the businesses that engage
in fraud or specified unfair practices from gaining an advantage over competitors. They may also
provide additional protection for those most vulnerable in society. Consumer protection laws are
a form of government regulation that aim to protect the rights of consumers. For example, a
government may require businesses to disclose detailed information about products—particularly
in areas where safety or public health is an issue, such as food.
Consumer protection is linked to the idea of consumer rights, 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, ombudsmen, the Federal Trade Commission in America,
and Better Business Bureaus in America and Canada, etc.
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.[1]
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 Laws
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.
It's a way of preventing fraud and scams from service and sales contracts, bill collector
regulation, pricing, utility turnoffs, consolidation, personal loans that may lead to bankruptcy.
The following lists consumer legislation at the nation-state level. In the EU member states
Germany and the United Kingdom there is also the applicability of law at the EU level to be
considered; this applies on the basis of subsidiarity.
Australia
In Australia, the corresponding agency is the Australian Competition and Consumer
Commission or the individual State Consumer Affairs agencies. The Australian Securities and
Investments Commission has responsibility for consumer protection regulation of financial
services and products. However, in practice it does so through privately run EDR schemes such
as the Financial Ombudsman Service (Australia).
Germany
Germany as a member state of the European Union is bound by the consumer
protection directives of the European Union; residents may be directly bound by EU regulations.

A minister of the federal cabinet is responsible for consumer rights and protection
(Verbraucherschutzminister). In the current cabinet of Angela Merkel, this is Heiko Maas.
When issuing public warnings about products and services, the issuing authority has to take into
account that this affects the supplier's constitutionally protected economic liberty,
see Bundesverwaltungsgericht (Federal Administrative Court) Case 3 C 34.84, 71 BVerwGE
183).
India
See also: Consumer Protection Act of 1986 and National Consumer Disputes Redressal
Commission
In India The Consumer protection act, 1986 is governing consumer protection. Under this law,
Separate Consumer Dispute Redress Forums have been set up throughout India in each and every
district in which a consumer [complaint can be filed by both the consumer of a goods as well as
of the services] can file his complaint on a simple paper with nominal court fees and his
complaint will be decided by the Presiding Officer of the District Level. Appeal could be filed to
the State Consumer Disputes Redress Commissions and after that to the National Consumer
Disputes Redressal Commission (NCDRC). The procedures in these tribunals are relatively less
formal and more people friendly and they also take less time to decide upon a consumer
dispute[2] when compared to the years long time taken by the traditional Indian judiciary. In
recent years, many effective judgment have been passed by some state and National Consumer
Forums. The Contract Act of 1982 act lays down the conditions in which promises made by
parties to a contract will be legally binding on each other.It also lays down the remedies
available to aggregate party if the other party fails to honour his promise. The Sale of Goods Act
of 1930 act provides some safeguards to buyers of goods if goods purchased do not fulfill the
express or implied conditions and warranties. The Agriculture Produce Act of 1937 act provides
grade standards for agricultural commodities and live stock products.It specifies the conditions
which govern the use of standards and lays down the procedure for grading, marking and
packaging of agricultural produce.The quality mark provided under the act(Troy Kidige) is
known as AGMARK-Agricultural Marketing
Taiwan
Modern Taiwanese law has been heavily influenced by European civil law systems, particularly
German and Swiss law. The Civil Code in Taiwan contains five books: General Principles,
Obligations, Rights over Things, Family, and Succession. The second book of the Code, the
Book of Obligations, provided the basis from which consumers could bring products liability
actions prior to the enactment of the CPL.[
The Consumer Protection Law (CPL) in Taiwan, as promulgated on January 11, 1994 and
effective on January 13, 1993, specifically protects the interests and safety of customers using
the products or services provided by business operators. The Consumer Protection Commission

of Executive Yuan serves as an ombudsman supervising, coordinating, reporting any unsafe
products/services and periodically reviewing the legislation.
According to the Pacific Rim Law & Policy Association and the American Chamber of
Commerce, in a 1997 critical study, the law has been criticized by stating that "although many
agree that the intent of the CPL is fair, the CPL's various problems, such as ambiguous
terminology, favoritism towards consumer protection groups, and the compensation liability
defense, must be addressed before the CPL becomes a truly effective piece of legislation that will
protect consumers"
United Kingdom
See also: Consumer protection in the United Kingdom, Consumer Credit Act 1974, Unfair
Contract Terms Act 1977, Unfair Terms in Consumer Contract Regulations 1999, and Unfair
Contract Terms Bill
The United Kingdom, as a member state of the European Union, is bound by the consumer
protection directives of the European Union; residents may be directly bound by EU regulations.
Specifics of the division of labour between the EU and the UK are detailed here. Domestic (UK)
laws originated within the ambit of contract and tort but, with the influence of EU law, it is
emerging as an independent area of law. In many circumstances, where domestic law is in
question, the matter judicially treated as tort, contract, restitution or even criminal law.
Consumer Protection issues are dealt with when complaints are made to the Director-General of
Fair Trade. The Office of Fair Trading will then investigate, impose an injunction or take the
matter to litigation. However, consumers cannot directly complain to the OFT. Complaints need
to be made to the Citizens Advice Consumer Service (which has taken over from Consumer
Direct) who will provide legal advice to complainants, or re-direct the individual complaint to
Trading Standards for investigation. Due to restrictions within the Enterprise Act 2002,
individual complainants are unable to be told whether their case is being investigated or not. In
very rare cases, Consumer Direct may direct a very large number of complaints to the OFT to be
considered as a systemic complaint. The OFT can also be engaged by consumer groups e.g. The
Consumers Association or the statutory consumer protection body – Consumer Focus – via a
super complaint. The OFT rarely prosecute companies, however, preferring a light touch
regulation approach. Consumer complaints against companies are not published, but
investigation work, undertakings and enforcements are located at Many of the consumer
protection laws e.g. Distance Selling Regulations 2000 or Unfair Terms in Consumer Contracts
Regulations 1999 (15 years ago) are actually UK implementations of EU directives. The OFT is
one of the bodies responsible for enforcing these rules. This leads to a problem in that these
examples of legislation are clearly designed to deal with individual complaints but the OFT will
only deal with systemic complaints and will ignore individual complainants redirecting them
back to Consumer Direct.
The Office of Fair Trading also acts as the UK's official consumer and competition watchdog,
with a remit to make markets work well for consumers, and at a local, municipal level

by Trading Standards departments. General consumer advice can be obtained from the Citizens
Advice Consumer Service or via a local branch of the Citizen's Advice Bureau.
United States
Consumer protection laws often mandate the posting of notices, such as this one which appears
in all automotive repair shops in California
In the United States a variety of laws at both the federal and state levels regulate consumer
affairs. Among them are the federal Federal Food, Drug, and Cosmetic Act, Fair Debt Collection
Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, and
the Gramm–Leach–Bliley Act. Federal consumer protection laws are mainly enforced by
the Federal Trade Commission, the Consumer Financial Protection Bureau, the Food and Drug
Administration, and the U.S. Department of Justice.
At the state level, many states have adopted the Uniform Deceptive Trade Practices
Act including, but not limited to, Delaware, Illinois, Maine, and Nebraska. The deceptive trade
practices prohibited by the Uniform Act can be roughly subdivided into conduct involving either
a) unfair or fraudulent business practice and b) untrue or misleading advertising. The Uniform
Act contains a private remedy with attorneys fees for prevailing parties where the losing party
"willfully engaged in the trade practice knowing it to be deceptive". Uniform Act §3(b). Missouri
has a similar statute called the Merchandising Practices Act. This statute allows local prosecutors
or the Attorney General to press charges against people who knowingly use deceptive business
practices in a consumer transaction and authorizes consumers to hire a private attorney to bring
an action seeking their actual damages, punitive damages, and attorney's fee
Also, the majority of states have a Department of Consumer Affairs devoted to regulating certain
industries and protecting consumers who use goods and services from those industries ]For
example, in California, the California Department of Consumer Affairs regulates about 2.3
million professionals in over 230 different professions, through its forty regulatory entities. In

addition, California encourages its consumers to act as private attorneys general through the
liberal provisions of its Consumers Legal Remedies Act,
California has the strongest consumer protection laws of any US state, partly because of rigorous
advocacy and lobbying by groups such as Utility Consumers' Action Network, Consumer
Federation of California, and Privacy Rights Clearinghouse.
Other states have been the leaders in specific aspects of consumer protection. For example,
Florida, Delaware, and Minnesota have legislated requirements that contracts be written at
reasonable readability levels as a large proportion of contracts cannot be understood by most
consumers who sign them.

Types of ConsumerProtectionCases
The most common kinds of abusive business practices occur when consumers are in
particularly vulnerable circumstances. For example, when people fall behind on their bills, debt
collectors are in a position to make life even more difficult by calling in the early morning or late
night hours, making contact at a person’s place of business, and speaking to friends and family.
Consumer rights laws prohibit this sort of activity. In fact, under the Fair Debt Collection
Practices Act (FDCPA), such harassment can result in a statutory damage award of $1,000 for
the victim, plus the attorney fees incurred in bringing the suit.
Predatory lending also forms the basis for a large number of consumer protection
lawsuits. These schemes cover a broad range of conduct, such as charging exorbitant interest
rates on credit cards and other loans, hiding fees and penalties in the fine print of agreements
seldom read by customers, and applying payments to low-interest portions of a loan balance first.
Sadly, the foreclosure crises of 2010 exposed numerous lending scams in the real estate market.
Federal legislation aimed at predatory lending includes the Truth in Lending Act (TILA) and the
Home Ownership and Equal Protection Act (HOEPA) of 1994.
Consumer rights laws also protect the public from false or misleading advertising. For example,
automobile dealers have been known to advertise a vehicle at a reduced price in order to draw
shoppers to the dealership. Once they arrive, however, that vehicle or sales price is no longer
available. The dealer will then pressure shoppers into purchasing a vehicle on less favorable
terms. In addition to these “bait and switch” advertising tactics, consumer rights laws address
things like warranty misrepresentation, defective products, forced arbitration clauses, identity
theft, and other types of harassment and fraud.
The Federal Trade Commission (FTC)
In 1914, the U.S. Congress passed legislation creating the FTC, primarily in an effort
to combat trusts and anti-competitive business practices. While the agency continues that effort,
its role has since been expanded to cover a variety of consumer rights issues. The FTC’s Bureau
of Consumer Protection is tasked with enforcing federal laws dealing with unfair or deceptive
practices throughout the consumer economy. For instance, the bureau has taken an important
step to curb telemarketing fraud through the creation of the National Do Not Call Registry. This
popular service allows people to bar for-profit organizations from making unsolicited calls to
their home telephones.
Consumer Rights Class Action Lawsuits
One problem facing consumer rights victims is the relatively small amount of economic damages

they suffer as a result of a company’s improper conduct. When a consumer falls victim to fraud
by purchasing a product or service that does not measure up to the seller’s promises, the
consumer may suffer a loss equal to the amount paid, and perhaps some incidental expenses as
well. But in all likelihood, the loss to the consumer will represent only a fraction of the amount
of money it would take to bring a lawsuit against the seller. Consumers have the option of filing
a complaint with federal or state authorities in an attempt to have sanctions brought against a
fraudulent company, but this will not help consumers get their money back.
A class action lawsuit tips the balance of power in favor of the consumer. An individual whose
rights have been violated can join together with others who have similar claims against the same
defendant. Due to the economy of scale that exists with a class action lawsuit, a group of victims
can present a serious litigation threat to even the largest corporations. Attorneys who handle
these cases work on a contingency basis, meaning they only get paid if and when the victims are
compensated. Furthermore, victims with claims that are the basis of a class action suit may
decide to “opt-out” and pursue the matter individually when it is in their best interests to do so.

Consumer Product SafetyCommission
In 1972, Congress established the Consumer Product Safety
Commission (CPSC). It is the job of the CPSC to protectconsumers from faulty or dangerous pro
ducts by enacting mandatory safety standards for those products. The CPSC hasthe authority to b
an products from the marketplace or to recall products (when a product is recalled, it is removed
from theshelves or sales lots, and consumers may be able to return it to the manufacturer or place
of purchase for repair,replacement, or a refund). Still, the agency has trouble protecting consume
rs from hazardous products of which it isunaware.
In recent years, the CPSC has fallen victim to Federal
Budget cuts. Reductions in the agency's legal staff have promptedthe CPSC to rely more and mor
e on manufacturers to voluntarily recall their defective or hazardous products. Whenmanufacture
rs do not cooperate, the CPSC must commence a legal action that may take years to resolve.
Unfair or Deceptive Trade Practices
The Federal Trade
Commission (FTC), the largest federal agency that handles consumer complaints, regulates unfai
r ordeceptive trade practices. Even local trade practices deemed unfair or deceptive may fall with
in the jurisdiction of FTC lawsand regulations when they have an adverse effect on interstate co
mmerce.
In addition, every state has enacted consumer protection statutes, which are modeled after the Fe
deral Trade CommissionAct (15 U.S.C.A. § 45(a)(1)). These acts allow state attorneys, along wit
h general and private consumers, to commencelawsuits over false or deceptive advertisements, or
other unfair and injurious consumer practices. Many of the state statutesexplicitly provide that c
ourts turn to the federal act and interpretations of the FTC for guidance in construing state laws.
The FTC standard for unfair consumer acts or practices has changed with time. In 1964, the agen
cy instituted criteria fordetermining unfairness when it enacted its cigarette advertising and labeli
ng rule. A practice was deemed unfair when it (1)offended public policy as defined by statutes, C
ommon
Law, or otherwise; (2) was immoral, unethical, oppressive, orunscrupulous; and (3) substantially
injured consumers. The FTC changed the standard in 1980. Now, substantial injury ofconsumers
is the most heavily weighed element, and it alone may constitute an unfair practice. Such an unfa
ir practice isillegal pursuant to the Federal Trade Commission Act unless the consumer injury is
outweighed by benefits to consumers orcompetition, or consumers could not reasonably have av
oided such injury. The FTC may still consider the public policycriterion, but only in determining
whether substantial injury exists. Finally, the FTC no longer considers whether conduct wasimm
oral, unethical, oppressive, or unscrupulous.
The FTC has also developed, over time, its definition of deceptive acts or practices. Historically,
an act was deceptive if ithad the tendency or capacity to deceive, and the FTC considered the act'

s effect on the ignorant or credulous consumer. Aformal policy statement made by the FTC in 19
88 changed this definition: currently, a practice is deceptive if it will likelymislead a consumer, a
cting reasonably under the circumstances, to that consumer's detriment.
False
Advertising is often the cause of consumer complaints. At common law, a consumer had the righ
t to bring an actionagainst a false advertiser for Fraud, upon proving that the advertiser made fals
e representations about the product, thatthese representations were made with the advertiser's kno
wledge of or negligent failure to discover the falsehoods, and thatthe consumer relied on the false
advertisement and was harmed as a result. In 1911, an advertising trade journal calledPrinter's In
k proposed model legislation criminalizing false advertisements. Fortyour states enacted statutes
b

Importance of Consumer Protection
An analysis of marketing management has made it clear that consumer is a king pin in the
market. The producer should produce goods keeping in mind the requirements of consumers and
satisfy the consumer but it is observed that this obligation is neglected by some businessmen and
they are involved in the unfair practices such as supply of substandard quality, adulteration etc.
So there is need for consumer protection. Hence consumer protection means protecting the
interest of consumer.
Consumer protection is very wide. It includes rights, responsibilities and various remedies
available to consumers. It is not only beneficial for consumer but it is equally important for
businessmen also.
1. Consumer Ignorance:
Consumer protection provides information to the ignorant customers regarding rights and
remedies available to them. It spreads awareness so that consumer can know about the various
redressal agencies where they can approach to protect their interests.
2. Unorganized Consumers:
In developing countries like India, consumers are not organised. There are very few consumer
organisations which are working to protect the interests of consumers. Consumer’s protection
encourages establishment of more consumer organisations. Consumer protection provides power
and rights to these organisations as these organisations can file case behalf of customers.
3. Widespread Exploitation of Consumers:
Although nowadays consumer is the king pin of market but then also there is lot of exploitation
of consumers as businessmen use various unfair trade practices to cheat and exploit consumers.
Consumer protection provides safeguard to consumers from such exploitation.
Importance of Consumer Protection from Businessmen’s point of View:
Businessmen cannot survive for a long time by ignoring the interest of consumer. They have to
give due importance to consumer if they want to prosper in competitive market. Consumer
protection provides following benefits to businessmen:
1. Long Term Interest of Business:
After the liberalisation and globalisation the level of competition has increased so much that not
only internal but business has to face international competition. In the race of competition the
businessmen can win and capture a big share in the market only when they are able to satisfy its
customers by designing the products keeping in mind the requirements of customers.

The businessmen who ignore the interest and satisfaction of customers lose their goodwill and
clients. So it is in interest of business itself to keep its customers satisfied.
2. Businessman Uses Society’s Resources:
Businessmen use the resources of society. They earn profit by supplying goods and services to
the members of society so it must do something for society. Businessmen are merely trustee of
resources; they must use these resources for the benefits of consumers.
3. Social Responsibilities:
A businessman has social obligations towards various groups and customer is one of the
important groups. It is responsibility of businessmen to provide quality goods at reasonable
price. Consumer protection guides businessmen to provide social responsibilities.
4. Moral/Ethical Justification:
Traditionally ethics was part of profession only, but today ethics is playing very important role in
business also. The ethics or a moral value practiced by the businessmen adds glory to
businessmen. In today’s environment business without ethical value is not more than a criminal
activity and no civil society can tolerate and allow the existence of unethical business.
5. Government Intervention:
If businessmen want to avoid intervention of government then they should not involve in unfair
trade practices. Government intervention may spoil the image of business. Businessmen should
voluntarily involve in the activities which protect the interest of consumer.
6. Consumer is the Purpose of Business:
The basic purpose of business is to create more and more customers and retain them and
businessmen can create more customers only by satisfying the customers and protecting the
interest of consumer. The customer is the foundation of business.
1) To Organize Consumers: Indian consumers are scattered over a wide geographical area.
They are not well organized. They have a low power and businessmen exploit consumers. Here
we need consumer protection.
(2) Provide Market Information: Majority of the consumers have no information about quality,
type, price and other marketing facilities. Many customers buy without product knowledge and
this make them suffer losses.
(3) Importance of Physical Safety: Indian markets are over flooded with products. The
products may be adulterated and may be health hazardous. This may endanger their life and due
to this a consumer needs to be protected.

(4) Avoiding Monopoly: Consumer Protection is very important in terms of avoiding monopoly.
Monopoly is the crown of modern market. Most of the organizations, irrespective of various
restrictions follow monopoly practice. Due to this consumers get affected and needs to be
protected.
(5) Prevention from Malpractices: Business malpractices are rapidly growing in modern
market. Businessmen follow unfair trade practices, restrictive trade practices and monopolistic
trade practice and consumer protection plays a vital role.
(6) Avoiding Pollution: Pollution is very serious issue taken by every country. Pollution affects
the mind and health of not only consumers but also citizens. It is important to avoid pollution to
save society at large from pollution.
(7) Misleading Advertisements: Many organizations, deliberately cheat consumers through
wrong or misleading advertisements. This will protect consumers from getting exploited.
(8) Informing Consumers about their Basic Rights: Majority of the consumers are ignorant.
They do not know about consumer rights. Consumer movements inform consumers about their
rights and protect their interest and rights.

Consumer prortection

More Related Content

What's hot (20)

Similar to Consumer prortection (20)

More from manish jangid (8)

Recently uploaded (20)

Consumer prortection