Consumer Bill passed by LS, to ensure strict action against misleading ads

Ajay Banerjee
Tribune News Service 
New Delhi, July 30

The Lok Sabha on Tuesday passed a new consumer protection Bill which provides for strict monitoring and punishment for misleading advertisements and addresses conflicts arising from new-age developments in e-commerce, direct selling, and telemarketing.

It aims to empower consumer courts at the state and district level to disburse greater financial compensation to consumers. The Bill will replace the Consumer Protection Act 1986.

Minister for Consumer Affairs Ram Vilas Paswan said: “We aim to simplify the system and the new law was necessary in view of modern day challenges.”

The Bill with 109 clauses seeks to deal with consumer complaints on a proactive basis. The setting up of a Central Consumer Protection Authority (CCPA) is envisaged by the Bill to promote, protect and enforce the rights of consumers. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. The CCPA will have an investigation wing, headed by a Director-General, which may conduct an inquiry into such violations.

Speaking on misleading advertisements, Paswan said the onus will now be on the advertiser for claims made about the products. He cited advertisements which claim to increase height or grow hair, calling them “impractical claims”. 

Celebrities who advertise such goods will not go to jail, but will be advised to read about their claims before endorsing them, said Paswan. Notably, the standing committee had recommended jail for celebrities making tall claims in endorsements.

Explaining the provisions of the Bill, Paswan said it will allow for a ‘class action’ ie if the engine one car has been found faulty, owners of all cars made in the same lot can avail claims.

On enhancing powers of the district and state consumer courts Paswan said they can now deal with claims upto Rs 1 Crore and Rs 10 Crore. Matters of fiscal compensation of greater than Rs 10 Crore will be dealt with at the national level.

Congress MP Shashi Tharoor asked the minister to include clauses that any arbitration clause or any limited liability clause introduced by the seller or manufacturers will be over ridden by this law. Paswan promised that all this will be taken up when the rules will be framed.