Unfair Trade Practices: Why do consumers adjust themselves to all inconveniences? Has the Consumer Protection Act lost its power or have consumers lost faith in it
In June 2008, V. Thiruvengadanathan and C. Packialakshmi of Unfair Trade Practice Wing of Madurai filed a complaint with the Office of the Inspector General/Economic Offences Wing about a multilevel marketing business forum selling Tirukkural books. The complaint remained unaddressed for almost two years. In May 2010, police arrested the owner of the business for duping about 1.25 lakh persons from Madurai and various parts of the State.
“If the authorities had taken our complaint seriously, crores of hard-earned money of lakhs of common people would have been saved,” says Thiruvengadanathan, a senior consumer forum activist.
Unfair trade practices can spread like a disease. In the name of freebies and benefits, traders cash in on the consumer’s desire and greed. Unaware of the potential snares in chain and Ponzi schemes that promise large returns for very little work, people lose their hard-earned money, he says.
“Nowadays, the month of Aadi has become synonymous with freebies and gifts,” says Thiruvengadanathan. But throughout the year, there are sales promotional schemes that lure consumers.
Unaware of snares
The Government has implemented various Acts to stress the need for fair and healthy competition and to ensure a level playing field and equal opportunities for all businesses. Those Acts are meant to ensure a fair deal for consumers also.
Originally, the Monopolies and Restrictive Trade Practices Act, 1970, identified and classified unfair trade practices (UTPs). Aggrieved individuals and consumer bodies were able to approach the MRTP Commission for redressal against such practices. Now the Competitions Act, 2002, has replaced the MRTP Act. The original provisions against unfair and restrictive trade practices in the MRTP Act are now wholly vested with the Consumer Protection Act, 1985 (CP Act).
“But the CP Act is toothless as it has no punishing power,” says Thiruvengadanathan. He adds that the consumer court has become similar to civil courts, which are known for dragging out cases with many adjournments.
“There are cases where people are fighting for more than 14 years under CP Act, which is enacted to solve issues of customers within 90 days,” he notes.
High-tech and low-tech UTPs
Unfair practices in respect of sales and services include misleading advertisements and false representation, bargain sale, bait and switch selling, offering of gifts or prizes with the intention of not providing them and conducting sales promotional prize contests, sale of non-standard or unsafe products and services to consumers, and hoarding and destruction of goods.
“New UTPs not so far imagined by the lawmakers are being continuously invented and innovated,” says Thiruvengadanathan. “Now we have a crop of high-tech UTPs in e-commerce and cyber space. Consumer associations are continuously battling against the UTPs. Unfortunately, their efforts pay little dividends due to lacunae in the CP Act and the long-drawn legal procedure.”
The Unfair Trade Practice Wing does have islands of successes against mighty national and multinational companies, media houses and Government sectors. But neither the Wing nor the CP Act is able to take a dig at the rampant Aadi discount sales, especially in the garment sector. Traders buy from different places and quote their own prices, he says, and it is hard to trace the origin of the goods, except for certain branded items. It is impossible to judge whether the discounts are genuine.
History of consumer rights
The Consumer Rights Protection Council of Madurai functioned under the patronage of M. Tamilkudimagan in the 1970s even before the enactment of the Consumer Protection Act. In those days, only the elite and educated were benefitted.
“Consumer is the king but they seldom realise it,” says C. Packialakshmi, Secretary, Women Consumer Protection Association. “People should learn to take everything with a pinch of salt. In the chain scheme, ten idiots are paying for the lucky person.”
She recommends that consumers develop the habit of collecting bills for their purchases, to protect themselves and also as their civic duty. Consumers who do not ask for bills do not save their wallets but the traders, who use discount as a hook to trap customers. “Consumers have no proof to prove themselves in the courts,” adds Packialakshmi.
There are many registered consumer forums but only a couple of them are active. The Koodal Nagar Consumer Movement, the Women Consumer Protection Association and a few other organisations are establishing consumer clubs in schools. So far, they have set up 35 clubs and organise awareness programmes at regular intervals. Packialakshmi says, “After all, we should catch them young.”
Consumer cases must be promptly settled if consumer forums are to function effectively, according to the honourable Justice G. Regupathi (retired), State President, State Consumer Disputes Redressal Commission, Madurai Bench.
Addressing advocates and consumer forum activists recently on the district court premises at the commencement function of Madurai Circuit Bench of State Consumer Disputes Redressal Commission, Justice Regupathi said the Circuit Bench is a milestone in the history of consumer protection and a step forward in taking legal remedies to the doorsteps of the consumers.
“The object of the Act is to provide speedy, inexpensive justice and redressal,” he said. “Voluntary consumer organisations and educational institutions should reach out to consumers at the grassroots level at village and taluk levels and create awareness about consumer rights.”
He suggested that panchayat boards, municipalities and corporation could be used for receiving complaints from the public, and that police and revenue authorities could help enforce the Act and enhance its efficiency. “In spite of establishing consumer courts for more than two decades, we have not achieved the desired results,” he said.
There are 1704 cases pending with the 13 southern districts, including 678 pending cases in Madurai. Chief Minister J. Jayalalithaa inaugurated the Madurai Circuit Bench of State Consumer Disputes Redressal Commission on August 11. The Madurai Bench of State Commission commenced its proceedings on August 21.