CONSUMER PROTECTION – COMPLETE NOTES

Class 12 Business Studies | Keyword-Based Revision

■ Consumer Protection – Concept (Crisp)

Earlier, market followed "Caveat Emptor" (Let the buyer beware)
■ Buyer had responsibility to check goods

Now, market follows "Caveat Venditor" (Let the seller beware)

■ Seller is responsible for quality, safety and fairness

■ Today, consumer is king

■ Therefore, consumer protection = safeguarding consumer interests and protecting them from unfair trade
practices

■ Consumer Protection – Importance

Adulteration of Goods
Inferior or harmful substances are mixed in products, which affects health and safety of consumers.

Sale of Counterfeit Goods

Fake or duplicate products are sold as original, leading to loss of money and trust.

Sale of Sub-standard Goods

Goods that do not meet prescribed quality standards are sold in the market.

Sale of Duplicate Goods

Products that look like original brands but are actually copies or imitations.

Malfunctioning Weights and Measures

Use of wrong weights or measures results in less quantity being given to consumers.

Black Marketing and Hoarding

Goods are stored to create artificial scarcity, which leads to increase in prices.

Overcharging
Charging a price higher than the Maximum Retail Price (MRP).

Supplying Defective Goods

Products with faults or defects are sold, causing dissatisfaction or loss to consumers.

Misleading Advertisement
Advertisements that give false or exaggerated claims about products or services.

Inferior Services
Services provided are of low quality and do not match what was promised

■ Need for Consumer Protection

Consumer protection is needed to protect consumers from loss or exploitation and to ensure:
● Physical safety of consumers
● Access to information (correct & complete)
● Corporate social responsibility (quality + fair price)
● Consumer satisfaction
 ● Social justice & trusteeship
● Survival & growth of businesses

■ From Consumers' Point of View

Consumer Ignorance
■ Consumers are often unaware of their rights and remedies, so education is needed.
Unorganised Consumers
■ Consumers are not united, so they need organisations to protect their interests.
Widespread Exploitation
■ Consumers face unfair practices like adulteration, defective goods, misleading ads, black marketing, etc.

■ From Business Point of View

Long-term Interest of Business
■ Customer satisfaction leads to repeat sales, goodwill and increase in customer base, ensuring long-term profit.

Business uses Society's Resources

■ Business uses society's resources, so it has a responsibility to serve public interest and maintain trust.

Social Responsibility ■ (Important Line)

■ Business has social responsibility towards various stakeholders. ■ Since businesses earn by selling goods and
services to consumers, consumers are an important stakeholder, and their interests must be properly taken care
of.

Moral Justification
■ It is the moral duty of business to avoid exploitation and ensure fair practices.

Government Intervention
■ Unfair practices may invite government intervention, which can harm the company's image, so businesses
should act responsibly.

■ Consumer – Meaning
■ A consumer is a person who buys any goods or avails any services for a consideration which has been paid, or
promised, or partly paid and partly promised, or under any system of deferred payment.

■ It includes any user of such goods or beneficiary of services when such use is made with the approval of the
buyer.

■ It applies to both offline and online transactions (including e-commerce, teleshopping, direct selling, etc.).

■ Terms & Definitions

Complaint
Any allegation in writing made by the complainant for obtaining relief w.r.t. restrictive trade practice, defect in
goods or deficiency in services provided, overcharging of price or offering of goods or service injurious to life and
safety.

Complainant
means one or more consumers, or any voluntary consumer association, central or state government or the central
authority or a legal heir or legal representative or a parent or legal representative in case of a minor.
Spurious goods
Goods that are falsely claimed to be genuine.

Unfair trade practice

A trade practice for the purpose of promoting sale, use or supply of any goods or service falsely represents its
quality, standard, quantity, composition, style or model.

Restrictive trade practice

A trade practice which manipulates price or affect the flow of supplies in the market relating to goods and services
in such a manner that an unjustified cost is imposed on the consumer.

Defect
Any fault, imperfection, shortcoming or inadequacy in quality, nature and manner of performance in relation to
goods or a product.

Deficiency
Any fault, imperfection, shortcoming or inadequacy in quality, nature and manner of performance in relation to any
service and includes act of negligence or omission or commission or withholding relevant information which
causes loss or injury to the consumer.

Injury
Any harm illegally caused to any person in body, mind or property.

Product
Any article or goods or substance or raw material or any extended cycle of such product either in gaseous, liquid
or solid state possessing intrinsic value capable of delivery either as assembled or a component produced or
manufactured to trade. It does not include human tissues, blood, blood products and organs.

Product Seller
Any person in the course of business imports, sells, distributes, leases, installs, prepares, labels, markets, repairs,
maintains or otherwise involved in placing the product for commercial use or a service provider.

Product Liability
Responsibility of a product manufacturer or seller of any product or service to compensate for any harm caused to
a consumer by defective product manufactured or sold or by deficiency in services.

■ Six Consumer Rights (Consumer Protection Act, 2019)

1. Right to Safety
■ Consumer ko right hai ki wo hazardous goods & services se protected rahe jo life, health aur property ke liye
dangerous ho sakte hain.
■ Example: ISI marked products ensure safety.

2. Right to be Informed
■ Consumer ko right hai complete information mile — price, quality, quantity, ingredients, date of manufacture,
expiry, usage etc.
■ Taaki wo informed decision le sake.

3. Right to be Assured (Right to Choose)

■ Consumer ko freedom hai variety of goods & services me se choose karne ki at competitive prices.
■ Market me options available hone chahiye.

4. Right to be Heard
■ Consumer ko right hai complaint file karne ka aur suna jane ka in case of dissatisfaction.
■ Companies ko grievance redressal system maintain karna chahiye.

5. Right to Seek Redressal

■ Consumer ko right hai relief/compensation mile against unfair trade practices.
■ Includes: replacement, repair, refund, compensation.

6. Right to Consumer Education

■ Consumer ko right hai awareness & knowledge mile apne rights aur remedies ke baare me.
■ Taaki wo informed aur alert rahe.

■ Consumer Responsibilities (Short Points)

Be aware
■ Market me available goods & services ke baare me aware raho, taaki wise choice kar sako.

Buy standardised goods

■ Hamesha ISI, FPO, Hallmark jaise quality marks check karo.

Learn about risks

■ Products/services ke risks samjho aur instructions follow karo.

Read labels carefully

■ Price, quantity, manufacturing date, expiry date etc. dhyaan se padho.

Assert yourself
■ Apne rights ke liye stand lo aur fair deal ensure karo.

Be honest in dealings
■ Sirf legal goods/services kharido aur unfair practices ko discourage karo.

Ask for cash memo

■ Hamesha bill/receipt lo as proof of purchase.

File complaints when needed

■ Agar dissatisfaction ho toh consumer forum me complaint file karo.

■ Ways and Means of Consumer Protection

1. Self-regulation by Business
■ Businesses should follow ethical practices and set up consumer service & grievance cells to solve complaints.

2. Business Associations
■ Organisations like FICCI, CII lay down code of conduct for their members to ensure fair dealings with
customers.

3. Consumer Awareness
■ A well-informed consumer can raise voice against unfair practices and make better decisions. ■ Example: Jago
Grahak Jago campaign

4. Consumer Organisations
■ These organisations educate consumers, protect their rights and force businesses to avoid malpractices.
5. Government
■ Government protects consumers through laws & regulations like Consumer Protection Act, 2019 and bodies like
CCPA.

■ Redressal Agencies under Consumer Protection Act, 2019

1. District Commission
■ Complaint entertain karta hai jab value ≤ ■50 lakh
■ Yahin pe first hearing hoti hai
■ Order se dissatisfied ho toh appeal State Commission me (within 45 days)

2. State Commission
■ Complaint entertain karta hai jab ■50 lakh – ■2 crore
■ District Commission ke orders par appeal sunta hai
■ Iske order ke against appeal National Commission me (within 30 days)

3. National Commission
■ Complaint entertain karta hai jab value > ■2 crore
■ Entire India jurisdiction
■ State Commission ke orders par appeal sunta hai
■ Iske order ke against appeal Supreme Court me (within 30 days)

■ Relief Available to Consumers

Agar District / State / National Commission satisfied ho jaye ki defect / deficiency / unfair trade practice hai, toh
yeh orders pass kar sakti hai:

Defect remove karna

■ Goods ya service me jo defect hai usse correct karwana

Replacement
■ Defective product ko new product se replace karwana

Refund
■ Product ya service ka paid price wapas dilwana

Compensation
■ Consumer ko loss ya injury ke liye reasonable compensation dilwana

Punitive damages
■ Special cases me extra penalty/damages lagana

Stop unfair practices

■ Unfair/restrictive trade practice ko band karwana aur future me repeat na ho

No sale of hazardous goods

■ Dangerous goods ko sell karne se rokna

Withdrawal of hazardous goods

■ Market se hazardous goods withdraw karwana

Stop manufacturing hazardous goods/services

■ Hazardous goods banana ya services dena band karwana

Product liability compensation

■ Defective product/service ki wajah se loss/injury ka compensation dilwana

■ Role of Consumer Organisations / NGOs

Consumer organisations aur NGOs consumer protection ke liye important role play karte hain:

Awareness create karna

■ Seminars, workshops, campaigns ke through consumers ko unke rights & duties ke baare me educate karte
hain

Publications & information dena

■ Journals, magazines, reports publish karke consumer problems, legal remedies, rights ki info dete hain

Comparative testing
■ Different brands/products ka testing karke unki quality compare karte hain aur results publish karte hain

Unfair practices ke against protest

■ Consumers ko encourage karte hain ki woh exploitative practices ke against awaaz uthayein

Legal assistance provide karna

■ Consumers ko legal advice, aid aur guidance dete hain complaint file karne me

Complaints file karna

■ Consumer courts me consumers ki taraf se cases file karte hain

Public interest cases lena

■ Individual nahi, balki general public interest me cases file karte hain

Consumer unity promote karna

■ Organisations bana kar collective strength develop karte hain (e.g., consumer societies)

Class 12 Business Studies | Consumer Protection Chapter | Complete Notes