An Appeal for Total Consumer Protection

30 Oct,2017

 

By Indrani Sen

 

With the resolution of creating a New India, our government is working on a new consumer protection act which will ensure stricter guidelines on advertisements to ensure that consumers in India are not misled.  At the International Conference on East, South and South-East countries held last week in New Delhi, Prime Minister NarendraModi made the preliminary announcements. This new law, incorporating the revised 2015 UN Guidelines on Consumer Protection, will replace the Consumer Protection Act 1986.

On October 28, Brand Equity quoted from the PM’s speech:“Stringent provisions are proposed against misleading advertisements. A Central Consumer Protection Authority (CCPA) with executive powers will be constituted for quick remedial action” The article also highlighted that “the proposed law, awaiting Cabinet approval, provides for fine up to Rs 50 lakh and up to three years’ ban in case of misleading endorsement by celebrities while manufacturers would face fine and jail term for similaroffence.”(https://brandequity.economictimes.indiatimes.com/news/advertising/law-to-curb-false-advertisements-for-buyer-safety-soon-pm-modi/61282918)

The media and advertising industry in India has been conscious about misleading advertisements and has set up various self-regulatory bodies to take care of consumer complains related to news, other content and advertising. The Advertising Standards Council of India (ASCI) is the foremost among these self-regulatory bodies which is supported by all industry bodies and has a representation of the general public. ASCI have been trying to ensure that our advertising follows four basic codes, Honesty, Decency, Responsibility and Fairness and in the process evaluates complains not just by the consumers, but also by manufacturers/ advertisers against misleading competitive advertisements. In the new law proposed by our government, will there be any provision for fine etc by the Central Consumer Protection Authority for unfair competitive advertisement which harms the business interest of the competitor and in the process indirectly harms the consumer?

The 2015 UN Guidelines on Consumer Protection lists the legitimate needs to be met as the following: (http://unctad.org/en/PublicationsLibrary/ditccplpmisc2016d1_en.pdf)

  • Access by consumers to essential goods and services;
  • The protection of vulnerable and disadvantageous consumers;
  • The protection of consumers from hazards to their health and safety;
  • The promotion and protection of the economic interests of consumers;
  • Access by consumers to adequate information to enable them to make informed choices according to their individual wishes and needs;
  • Consumer education, including education on the environmental, social and economic consequences of consumer choice;
  • Availability of effective consumer dispute resolution and redress;
  • Freedom to form consumer and other relevant groups or organizations and the opportunity of such organizations to present their views in decision-making process affecting them;
  • The promotion of sustainable consumption patterns;
  • A level of protection for consumers using electronic commerce that is not less than that afforded in other forms of commerce;
  • The protection of consumer privacy and the global free flow of information.

Readers, please note the third point on protection of consumers from hazards to their health, etc.

One would have expected that the further development of the Consumer Protection Act, in line with the 2015 UN guidelines, will be more all encompassing like USA where American consumers are protected not just from deceptive advertising, but also from unsafe products, fraud and unfair business practices including medical, financial and legal practices. Instead, from the preliminary announcement it seems that the only cat which the Government is planning to bell through enhancement of the act is the most visible one, advertising! While the penalty for misleading advertisements was highlighted by our PM, there was no mention of penalty for medical negligence or wrong treatment, etc. in government or private hospitals and nursing homes and various other offences related to consumer protection.

Today American consumers are protected through a mix of national (federal), state, and local governmental laws and many private rights of actions. The main consumer protection agency at the federal level is the United States Federal Trade Commission (FTC). Created in 1914, the FTC has two objectives:  firstly, to protect consumers by preventing fraud, deception, and unfair business practices in the marketplace and secondly to maintain competition by preventing anticompetitive business practices. The FTC’s Bureau of Consumer Protection supervises over all issues related to the first objective. From the initial announcement it seems that the proposed Central Consumer Protection Authority has been designed as per the Bureau of Consumer Protection in USA without having the 360-degree approach for consumer protection.

On behalf of the Marketing& Advertising industry, I would like to appeal to Prime Minister NarendraModi and Consumer Affairs Minister Ram Vilas Paswanfor a legal reform which provides “Total Protection” to Indian consumers from fraud, deception and unfair business practices and not just a law which gives lip-service to the 2015 UN Guidelines by making scapegoats of the marketers and the celebrities endorsing some advertisements in good faith.

 

 

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