Indian parliament approved a new Consumer Protection 2019 bill on August 6. The bill will regulate the trade actions of e-commerce entities selling products and service, including but not limited to eCommerce based inventory sellers, market places, e-commerce sites, or online service providers.
Some of the quick examples to online service are food delivery, travel, insurance, hotels and lodges, personnel services, ticketing services, person to person market places for selling new and used goods, medical care and pharmacies, facility and household management, and couponing. It can also be any trade carried on social media platforms.
The Consumer Protection Bill is released with a set of ground rules for protecting the rights of consumers when shopping online on e-commerce sites. The Consumer Protection Act 2019 proposes taking severe actions against fake or counterfeit products and unfair trade practices to protect the interest of consumers. The act passed by the Lok Sabha will replace the Consumer Protection Act, 1986.
The new guidelines establish a Central Consumer Protection Authority (CCPA) to reform the process of settling disputes, such as administering stringent penalties and even jail term for counterfeit sales, misleading ads, and services adulteration. The bill was defined and submitted to the Upper House by the Union Food and Consumer Affairs Minister, Ram Vilas Paswan.
A preliminary consumer consultation in the Connected Consumers Community was conducted by the LocalCircles to support the guidelines established.
Thousands of consumers across the country participated in the survey, where the key areas focused on the following improvements:
- Addressing counterfeit
- Price influencing
- Integrity of reviews
- Transparency of sellers’ terms and disclosure of sellers’ information
The draft guidelines are now in the public domain, with online sellers and e-commerce platforms. They have all rights to share their views. The instructions can be fine-tuned before they are finalized.
Counterfeiting and eCommerce Sites
Although e-commerce sites have brought a lot of comfort to consumers, there is no guarantee that the items sold on the apps and websites are originals.
The new guidelines (e-commerce) will empower the consumer interest and help boost their trust in the e-commerce sector.
At present, most online sellers and e-commerce platforms do not disclose their identity or information to consumers, including their general trade terms. In the event of having received fake products or their appeal of return of goods or money being rejected, consumers have very little to say. With undisclosed information, consumers currently cannot hold sellers accountable for such acts.
The guidelines will change this part.
LocalCircles conducted a seven-poll survey to see how massive the counterfeit problem on e-commerce sites is. 30,000 unique consumers around India participated in the survey while casting over 57,000 votes. The answers are unbelievable:
- 19% of consumers received a fake product in the past 6 months of their purchase.
- 79% of consumers said that if a product obtained from an e-commerce site was found to be fake, the site or seller must pay the penalty along with return and refund.
- Fragrances and cosmetics section received the highest votes (35%) for the most counterfeited category in the last 6 months.
- 98% of the consumers agreed that e-commerce sites must blacklist the sellers under a lawful act that are selling fake products.
- Unfortunately, only 16% of consumers are able to identify a counterfeit product.
- Almost 78% of consumers believe that if sellers disclose their information, such as name, address, GSTIN, phone number, email id and trade terms to the public, the counterfeit act will reduce substantially.
- 92% of the consumers want e-commerce sites to segregate authorized sellers’ product listings by adding filters in the Search section.
LocalCircles also conducted a 5-poll survey on ‘Reviews and Ratings on Ecommerce Sites’ and another 3-poll study of ‘Customer Service on Ecommerce Sites.’
The results of these surveys have been utilized in the institution of the guidelines to reduce counterfeiting frauds.
Highlights of the Consumer Protection Bill 2019
The rising number of consumer cases, including 20, 304 pending at the national level, 1,18,319 at the state level, and 2,23,163 cases at the district level has triggered the imminent change of the act.
The bill endorses all rights of consumers and offers a structure for raising and addressing complaints regarding misleading sellers and service deficiency. For instance, the bill mandates celebrities to pay fine if they endorse misleading ads. Mr. Paswan said the new bill would take actions against publishers and celebrities for advertising misleading information.
He also added that in case a product is found not up to the quality standards, instead of individual examination and replacement, the entire batch would be evaluated. Suggestions given by the members will be added and modified in the bill.
It is found that there is no world-wide provision of strict punishment for celebrities. Addressing this, Paswan added that the new bill would include jail term as punishment for influencers and celebrities.
Any celebrity or media publisher must advertise only the content given to them in writing directly by the manufacturer. Anything extra provided will be considered misleading. Advertisements stunts will be strictly examined by the government henceforth, so that good works by the celebrities receive full credit as opposed to punishment for misleading acts.
Other important issues that the bill will address:
- Punishment for adulteration of products.
- Regulations to be notified on all e-commerce and direct selling platforms.
- Product Liability protection: Manufacturers or sellers will have to compensate for injury or damage caused by defective product and service deficiency.
- Compensation to be increased to INR 1 crore for a district-level commission, INR 10 crore for a state-level commission, and above INR 10 crore for a national commission.
- A simplified dispute resolution process for mediation and e-filing cases. Consumers will be able to file cases at the nearest commission under the local law.
- MRP should be printed clearly on the product or services offered.
- In support of the bill, RJD member Manoj Kumar Jha urged the government to take measures against financial instruments and mutual funds advertisers lest their advertisements do not send a clear message to consumers.
While many members of the Rajya Sabha have opposed the sanction of the bill, the majority (including KC Ramamurthy and Vijay Geol, BJP, Amar Patnaik, BJP, and Ravi Prakash Verma, SP) has shown support and come forward with new views and policies to reform the guidelines furthermore.
The bill is critical for consumers as a way to throw light on their path while buying goods and services online safely. The policies and guidelines will help sustain the integrity of product reviews and ratings and admonish fake reviews.
The bill will also make sure grievance redressal is quickened and strictly enforced to enable increased trust and development of the e-commerce sector.
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