Consumer Rights, Consumerism and Business

8/3/2019 Consumer Rights, Consumerism and Business

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What is consumerism?

What are consumer rights?

What is the role of Government,Business,Consumers?


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Consumerism Kotler has defined Consumerism as a social

movement seeking to augment the rights and powersof the buyers in relation to others.

Consumerism as a collective endeavor of theconsumers to protect their interests, is a manifestation

of the failure of the business, including that of thepublic sector, and the government to guarantee andensure the legitimate rights of the business.


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In todays date, business is confronted with growth of

consumerism and legislative measures to protectconsumers.

Consumer movement is growing in India.

There is growing consumer awareness about products

failing to satisfy quality requirements. Exploitation of consumers by unfair trade practices,

poor quality and spurious products and overpricing isvery widespread.

Misleading false or deceptive advertisements iscommon. At times the advertisement gives only halfthe information so as to give a different impressionthan is the actual fact.


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There are organisations such as Consumer GuidanceSociety of India, Mumbai and Consumer Educationand Research Centre, Ahmedabad.

These organisations are active in conducting product

testing and exposing substandard quality andadulteration. Outcome of consciousness regardingconsumer rights has led to ISI certification of foodcolors now being mandatory.

Consumer organisations also play an important role inaddressing consumer greivances.


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UN Guidelines for Consumer Protection Objective:

1. To assist countries in achieving or maintaining adequateprotection for their population as consumers.

2. Facilitate production and distribution patternsresponsive to the needs and desires of consumers.

3. Encourage high levels of ethical conduct for thoseengaged in the production and distribution of goods andservices.

4. Assist countries in curbing abusive business practices byall enterprises which adversely affect consumers.

5. Facilitate development of independent consumer groups.6. To further international cooperation in the field of

consumer protection7. Encourage the development of market conditions which

provide consumers with greater choice at lower levels.


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U.N. Guidelines on Consumer

Protection (UNGCP) Provide a framework for governments to develop and

strengthen consumer protection policies andlegislation

Minimum guarantee by governments that themeasures will be undertaken


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Obligations imposed on governments

by the UNGCP 1. Physical Safety

Assure that products are safe and conform to safetystandards

Consumers receive information on proper use of goodsand risks involved

Measures are in place for notification and recall ofunsafe goods


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2. Consumers economic interests

Consumers obtain optimum benefit from theireconomic resources Ensuring that goods meet production and performance standards

Adequate distribution channels and after sales services

Fair business practices are employed

Protection against contractual abuses

Information is adequate for consumers to make informeddecisions and exercise choice


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3. Standards for safety and quality of goods andservices

Ensure there are national standards for safety andquality of goods and services

Such standards conform to international standards

Facilities to test and certify goods and services areencouraged


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4. Distribution facilities for essential goods andservices

Especially to consumers who are disadvantaged, e.g., inrural areas


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5. Redress

Establish and publicize mechanisms that are fair,affordable and accessible

Especially taking into consideration the needs of low-incomeconsumers


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6. Education and information programs

Should involve consumer and business groups

Particular attention to disadvantaged consumers inurban and rural areas

Should be included in school curriculum

Training programs for educators, mass media

professionals and consumer advocates


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7. Promotion of sustainable consumption

Should be done in conjunction with civil societyorganizations and business groups

Sustainable consumption practices within government,by business enterprises and by consumers


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8. Measures relating to food, water andpharmaceuticals

Prioritizes these areas

Should ensure quality control, adequate distributionand standardized information


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Food production

Sustainable agricultural polices and practices

Conservation of biodiversity Traditional knowledge


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Drinking water

National policies should be developed to improvesupply, distribution and quality of water for drinkingand other purposes


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Pharmaceuticals

Develop national policies to ensure appropriate use,procurement, distribution, production, licensingarrangements, registration systems and information toconsumers


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Consumer Rights

Some of the rights of consumers are:

Right against exploitation by unfair trade practices.

Right to protection of health and safety from goods and

services that are available to the consumer. Right to be informed about the quality and

performance standards, ingredients of the products,possible adverse effects etc.

Right to be heard if there is any grievance or suggestion. Right to get genuine grievances redressed.

Right to a physical environment that will protect andenhance the quality of life.


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Responsibility of Consumers

Consumer should not make vague or generalcomplaints and should also have supportinginformation and proof such as a bill.

Consumer should try to understand the viewpoint ofthe seller.

Consumers in asserting their rights should not

inconvenience or hurt other sections of the public ieresort to rasta roko movements, bandh etc.

Consumers should complain against a system and notattack individuals.


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Consumer Protection

For consumer protection all stakeholders especiallyBusiness, Government and consumers are equallyresponsible.

Business, comprising producers and all elements of

distribution channels have to pay due regard toconsumer rights.

Producer should not charge exorbitant prices in a sellersmarket.

Hoarding and blackmarketing is illegal.


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Government should come to the rescue of the consumerto avoid him from being misled, duped, cheated andexploited.

Role of Government in consumer protection is vital and

is through policy making, legislation and developmentof institutional capacity for its enforcement.

Government to establish distribution facilities foressential consumer goods and services.

Encourage establishment of consumer cooperatives and

related trading activities. Establish legal measures to enable consumers to obtain

redress through formal or informal procedures.

Consumer Protection


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Utility of Consumerism Producers and sellers will not take the consumer for

granted.

Consumerism will provide feedback for businesses andenable producers to understand consumer grievances,needs and wants.

Consumerism will make the Government more

responsive to consumer interests, prompt it to takenecessary measures to protect the rights of consumers.

Help consumer and producer to get together and co-operate to get rid of unscrupulous traders.


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Consumerism Consumerism has the following roles to play:

Consumer Education: Consumer is given informationabout various consumer goods and services in relation toprices, standard trade practices etc.

Product Rating: Agencies such as Consumer Educationand Research Society (CERS), Ahmedabad; carry outtests and report the result of such tests.

Liaison with Government and with Producers


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Plight of Indian ConsumerSome of the problems faced by Indian consumers are:

Short supply of items of essential needs.

Lack of effective or workable competition.

Unfamiliarity of product features results in sale ofsubstandard, inferior or even defective goods

Due to low literacy levels and unsatisfactory informationflows, Indian consumers are not conscious of their rights.

Consumerism in India is not organised and developed.

Laws to safeguard interests of consumers are not effectivelyimplemented.


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Government MeasuresIn India, the Government has taken a number of

measures to protect consumer interests: Statutory Regulation:

Government of India is empowered to regulate the termsand condition of sale, nature of trade and commerce etc.

Important legislation in this respect include theCompetition Act, Essential Commodities Act, Preventionof Food Adulteration Act, Prevention of Black marketingand Maintenance of Supplies of Essential Commodities

Act, Consumer Protection Act etc.

Growth of Public Sector was designed to enhanceconsumer welfare by increasing production and makingavailable goods and services at fair prices, curbing privatemonopolies and reducing market imperfections.


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Consumer Protection Act, 1986

The Consumer Protection Act 1986 is a social welfare legislationwhich was enacted as a result of widespread consumerprotection movement. The main object of the legislature in theenactment of this act is to provide for the better protection of theinterests of the consumer and to make provisions forestablishment of consumer councils and other authorities for

settlement of consumer disputes and matter therewithconnected.

In order to promote and protect the rights and interests ofconsumers, quasi judicial machinery is sought to be set up atdistrict, state and central levels.

The main object of these bodies is to provide speedy and simpleredressal to consumer disputes. It is one of the benevolent piecesof legislation intended to protect the consumers at large fromexploitation.


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Consumer Protection Councils The Act provides for the establishment of a Central Consumer

Protection Council by the Central Government and a StateConsumer Protection Council in each State by the respectiveState Governments.

Central Council shall consist of the Minister in charge ofconsumer affairs in the Central Government who shall be itsChairman .

Objective of Council: Right to be protected against marketing of goods and services which

are hazardous to life and property. Right to be informed about the quality, quantity , purity, standard

and price of goods and services so as to protect the consumer

against unfair trade practices. Right to be assured access to a variety of goods at competitive prices. Right to be heard and assured that consumers interests will receive

due consideration at appropriate forums. Right to seek redressal against unfair trade practices Right to consumer education.


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Consumer Disputes Redressal

AgenciesA District forum in each and every District of the

State.

A State Commission in each State.

A National Commission : Established by the CentralGovernment in Aug 1988.

A complaint where the value of the goods and services

and compensation is less than Rs 5 lakh is to be dealtwith the District Forum; between 5-20 lakhs by theState Commission and with more than twenty lakhsfalls within the jurisdiction of the National Comission.


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Right to Information Act 2005An Act to provide for setting out the practical

regime of right to information for citizens tosecure access to information under the control of

public authorities, in order to promotetransparency and accountability in the working ofevery public authority


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Ethical Responsibilities of Business towards

Consumers The responsibility of business corporations towards theirconsumers are to provide the products at right quality, quantity,time, place and the right price. Consumer is the foundation of anybusiness activity. Various unfair practices like hoarding,adulteration, shoddy merchandise, unfair measurements,

misleading advertising etc. should not be allowed. Businessesshould:

Produce goods according to the needs of the consumers, theirpurchasing power etc.

Offer quality goods at a reasonable price. Aim to improve the standard of living by producing goods and

services of high quality.

Treat customers fairly in all aspects of business transactions


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Ensure that after sales services is available. Ensure the health and safety of customers Inform and educate customers on the arrival and use of

products. Be truthful in the matter of advertising and warranty. Offer improved and new products through technical and

marketing research. Avoid monopolistic and restrictive trade practices.

Ensure that product promotion and advertising are notmisleading.

Trust forms the basis of successful marketplacetransactions and is the most important ethical issue.

Ethical Responsibilities of Business towards

Consumers


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Ethical issues relating to Product

Quality

Safety: Business should give safety the priority warranted by theproduct. Safety of a product can be ensured by monitoring themanufacturing process and periodic reviewing of the working

conditions and competence of personnel Packaging and Branding Issues: It is the ethical responsibility of

the manufacturer to provide clear, accurate and adequateinformation regarding the labeling and packaging of products.There should not be any misleading information regarding thequantity and quality of products.

Product Warranties: Warranties are obligations to purchasers thatsellers assume. Express warranties are the claims that sellersexplicitly state for eg: a product is waterproof etc. Implied

warranties include the claim, implicit in any sale, that a product isfit for its ordinary, intended use.


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Ethical issues Relating to Promotion Companies make use of advertising and promotional

strategies to lure more customers. Advertising isconsidered unethical when:

It degrades the rivals product or substitute product. The company provides misguiding and false information.

It conceals information that vitally affects human life (eg:side effects of drugs etc).

It is obscene or immoral.


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Cases under MRTP/Competition

Act Hindustan coco-cola and Inox Leisure Ltd

Colgate palmolive

RaavanAtul Kapoor Vs. Apollo Land & Housing Co Ltd (2009)

MRTP Commission.

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Consumer Rights, Consumerism and Business

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