MODULE-5
Marketing
Notes
24
CONSUMER PROTECTION
W e buy a variety of goods and services in our day-to-day life. Whatever we buy we
pay for it and derive satisfaction from its consumption and use. But sometimes we
do not feel satisfied with the product we buy. This may be on account of poor quality of
the product, overcharging by the shopkeeper, lower quantity of contents, misleading
advertisement, and so on. Should we allow these practices to continue? Obviously not;
then is there any remedy for such malpractices? The answer lies in the concept and practice
of consumer protection, the rights and responsibilities of consumers, legal provisions and
mechanism for settlement of consumer grievances. In this lesson, let us know details about
all these points.
OBJECTIVES
After studying this lesson, you will be able to:
• state the meaning of consumer;
• explain the concept of consumer protection;
• outline the need for consumer protection;
• describe the rights and responsibilities of consumers;
• state the main provisions of Consumer Protection Act; and
• outline the machinery for settlement of consumer grievances.
24.1 MEANING OF CONSUMER
You have learnt that a consumer is a person who consumes or uses any goods or services.
Goods may be consumables like wheat flour, salt, sugar, fruit etc. or durable items like
television, refrigerator, toaster, mixer, bicycle etc. Services refer to items like electricity,
cooking gas, telephone, transportation, film show etc. Normally, it is the consumption or
use of goods and services that makes the person to be called as ‘consumer’. But in the
eyes of law, both the person who buys any goods or hires any service for consideration
Business Studies 197
, MODULE-5
Marketing
(price) and the one who uses such goods and services with the approval of the buyer are
termed as consumers. For example, when your father buys apple for you and you consume
them, your father as well as yourself are treated as consumers. The same thing applies to
Notes hiring a taxi to go to your school. In other words, even the buyer of goods and services
whether he uses them himself or purchases them for consumption or use by some other
person(s) is treated as consumer in the eyes of law. However, a person who buys goods
for resale (like wholesaler, retailer, etc.) or for any commercial purpose is not treated as
consumer.
Under the Consumer Protection Act 1986, the word Consumer has been defined separately
for the purpose of goods and services.
(a) For the purpose of goods, a consumer means (i) one who buys
any goods for consideration; and (ii) any user of such goods
other than the person who actually buys it, provided such use is
made with the approval of the buyer.
(The expression ‘consumer’ does not include a person who
obtains such goods for resale or for any commercial purpose.)
(b) For the purpose of services, a consumer means (i) one who hires
any service or services for consideration; and (ii) any beneficiary
of such service(s) provided the service is availed with the
approval of such person.
24.2 CONCEPT OF CONSUMER PROTECTION
Consumer protection means safeguarding the interest and rights of consumers. In other
words, it refers to the measures adopted for the protection of consumers from unscrupulous
and unethical malpractices by the business and to provide them speedy redressal of their
grievances. The most common business malpractices leading to consumer exploitation are
given below.
(a) Sale of adulterated goods i.e., adding something inferior to the product being sold.
(b) Sale of spurious goods i.e., selling something of little value instead of the real product.
(c) Sale of sub-standard goods i.e., sale of goods which do not confirm to prescribed
quality standards.
(d) Sale of duplicate goods.
(e) Use of false weights and measures leading to underweight.
(f) Hoarding and black-marketing leading to scarcity and rise in price.
(g) Charging more than the Maximum Retail Price (MRP) fixed for the product.
(h) Supply of defective goods.
(i) Misleading advertisements i.e., advertisements falsely claiming a product or service
to be of superior quality, grade or standard.
198 Senior Secondary
, MODULE-5
Marketing
(j) Supply of inferior services i.e., quality of service lower than the quality agreed upon.
The above instances show the exploitation of consumers in the context of goods and
services. In a democratic nation like India, should we allow this to happen? So the measures
Notes
adopted by the government or non-government organisations (NGOs) for safeguarding
the interests of the consumers constitute consumer protection.
Examples of Consumer Exploitation in India
• The after sales service provider of the television set charged Rs
200 as service charge though he repaired the set within the
warranty period.
• The tickets issued to different passengers on the same day for
the same journey showed the same seat number.
• Penalty of Rs. 50 was charged by SBI after issuing the cheque
book to the customer showing that the balance available in the
account was less than the minimum required balance for issue of
cheque book.
• The supply of cooking gas cylinder to the consumers is found to
be underweight.
24.3 NEED FOR CONSUMER PROTECTION
The necessity of adopting measures to protect the interest of consumers arises mainly due
to the helpless position of the consumers. There is no denying fact that the consumers
have the basic right to be protected from the loss or injury caused on account of defective
goods and deficiency of services. But they hardly use their rights due to lack of awareness,
ignorance or lethargic attitude. However in view of the prevailing malpractices and their
vulnerability there to, it is necessary to provide them physical safety, protection of economic
interests, access to information, satisfactory product standard, and statutory measures for
redressal of their grievances. The other main arguments in favour of consumer protection
are as follows:
(a) Social Responsibility
The business must be guided by certain social and ethical norms. It is the moral
responsibility of the business to serve the interest of consumers. Keeping in line with Need for Consumer
Protection
this principle, it is the duty of producers and traders to provide right quality and § Social Responsibility
quantity of goods at fair prices to the consumers. § Increasing Awareness
§ Consumer
(b) Increasing Awareness Satisfaction
The consumers are becoming more mature and conscious of their rights against the § Principle of Social
Justice
malpractices by the business. There are many consumer organisations and associations § Principle of
who are making efforts to build consumer awareness, taking up their cases at various Trusteeship
levels and helping them to enforce their rights. § Survival and Growth
of Business
Business Studies 199
Marketing
Notes
24
CONSUMER PROTECTION
W e buy a variety of goods and services in our day-to-day life. Whatever we buy we
pay for it and derive satisfaction from its consumption and use. But sometimes we
do not feel satisfied with the product we buy. This may be on account of poor quality of
the product, overcharging by the shopkeeper, lower quantity of contents, misleading
advertisement, and so on. Should we allow these practices to continue? Obviously not;
then is there any remedy for such malpractices? The answer lies in the concept and practice
of consumer protection, the rights and responsibilities of consumers, legal provisions and
mechanism for settlement of consumer grievances. In this lesson, let us know details about
all these points.
OBJECTIVES
After studying this lesson, you will be able to:
• state the meaning of consumer;
• explain the concept of consumer protection;
• outline the need for consumer protection;
• describe the rights and responsibilities of consumers;
• state the main provisions of Consumer Protection Act; and
• outline the machinery for settlement of consumer grievances.
24.1 MEANING OF CONSUMER
You have learnt that a consumer is a person who consumes or uses any goods or services.
Goods may be consumables like wheat flour, salt, sugar, fruit etc. or durable items like
television, refrigerator, toaster, mixer, bicycle etc. Services refer to items like electricity,
cooking gas, telephone, transportation, film show etc. Normally, it is the consumption or
use of goods and services that makes the person to be called as ‘consumer’. But in the
eyes of law, both the person who buys any goods or hires any service for consideration
Business Studies 197
, MODULE-5
Marketing
(price) and the one who uses such goods and services with the approval of the buyer are
termed as consumers. For example, when your father buys apple for you and you consume
them, your father as well as yourself are treated as consumers. The same thing applies to
Notes hiring a taxi to go to your school. In other words, even the buyer of goods and services
whether he uses them himself or purchases them for consumption or use by some other
person(s) is treated as consumer in the eyes of law. However, a person who buys goods
for resale (like wholesaler, retailer, etc.) or for any commercial purpose is not treated as
consumer.
Under the Consumer Protection Act 1986, the word Consumer has been defined separately
for the purpose of goods and services.
(a) For the purpose of goods, a consumer means (i) one who buys
any goods for consideration; and (ii) any user of such goods
other than the person who actually buys it, provided such use is
made with the approval of the buyer.
(The expression ‘consumer’ does not include a person who
obtains such goods for resale or for any commercial purpose.)
(b) For the purpose of services, a consumer means (i) one who hires
any service or services for consideration; and (ii) any beneficiary
of such service(s) provided the service is availed with the
approval of such person.
24.2 CONCEPT OF CONSUMER PROTECTION
Consumer protection means safeguarding the interest and rights of consumers. In other
words, it refers to the measures adopted for the protection of consumers from unscrupulous
and unethical malpractices by the business and to provide them speedy redressal of their
grievances. The most common business malpractices leading to consumer exploitation are
given below.
(a) Sale of adulterated goods i.e., adding something inferior to the product being sold.
(b) Sale of spurious goods i.e., selling something of little value instead of the real product.
(c) Sale of sub-standard goods i.e., sale of goods which do not confirm to prescribed
quality standards.
(d) Sale of duplicate goods.
(e) Use of false weights and measures leading to underweight.
(f) Hoarding and black-marketing leading to scarcity and rise in price.
(g) Charging more than the Maximum Retail Price (MRP) fixed for the product.
(h) Supply of defective goods.
(i) Misleading advertisements i.e., advertisements falsely claiming a product or service
to be of superior quality, grade or standard.
198 Senior Secondary
, MODULE-5
Marketing
(j) Supply of inferior services i.e., quality of service lower than the quality agreed upon.
The above instances show the exploitation of consumers in the context of goods and
services. In a democratic nation like India, should we allow this to happen? So the measures
Notes
adopted by the government or non-government organisations (NGOs) for safeguarding
the interests of the consumers constitute consumer protection.
Examples of Consumer Exploitation in India
• The after sales service provider of the television set charged Rs
200 as service charge though he repaired the set within the
warranty period.
• The tickets issued to different passengers on the same day for
the same journey showed the same seat number.
• Penalty of Rs. 50 was charged by SBI after issuing the cheque
book to the customer showing that the balance available in the
account was less than the minimum required balance for issue of
cheque book.
• The supply of cooking gas cylinder to the consumers is found to
be underweight.
24.3 NEED FOR CONSUMER PROTECTION
The necessity of adopting measures to protect the interest of consumers arises mainly due
to the helpless position of the consumers. There is no denying fact that the consumers
have the basic right to be protected from the loss or injury caused on account of defective
goods and deficiency of services. But they hardly use their rights due to lack of awareness,
ignorance or lethargic attitude. However in view of the prevailing malpractices and their
vulnerability there to, it is necessary to provide them physical safety, protection of economic
interests, access to information, satisfactory product standard, and statutory measures for
redressal of their grievances. The other main arguments in favour of consumer protection
are as follows:
(a) Social Responsibility
The business must be guided by certain social and ethical norms. It is the moral
responsibility of the business to serve the interest of consumers. Keeping in line with Need for Consumer
Protection
this principle, it is the duty of producers and traders to provide right quality and § Social Responsibility
quantity of goods at fair prices to the consumers. § Increasing Awareness
§ Consumer
(b) Increasing Awareness Satisfaction
The consumers are becoming more mature and conscious of their rights against the § Principle of Social
Justice
malpractices by the business. There are many consumer organisations and associations § Principle of
who are making efforts to build consumer awareness, taking up their cases at various Trusteeship
levels and helping them to enforce their rights. § Survival and Growth
of Business
Business Studies 199
