Business Studies 3 Marks Question

Under the Consumer Protection Act, a consumer means:

1. Any person who buys any goods for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment. It includes any user of such goods, when such use is made with the approval of the buyer, but does not include a person who obtains goods for re-sale or any commercial purpose.
2. Any person who hires or avails of any service, for a consideration which has been paid or promised, or partly paid and partly promised, or under any system of deferred payment. It includes any beneficiary of services when such services are availed of with the approval of the person concerned but does not include a person who avails of such services for any commercial purpose.

Consumer Organisations: Consumer organisations play an important role in educating consumers about their rights and providing protection to them. These organizations can force business firms to avoid malpractices and exploitation of consumers.Major functions performed by consumer organizations:

1. Educating the general public about consumer rights by organising training programmes, seminars and workshops.
2. Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available and other matters of interest.
3. Carrying out comparative testing of consumer products in accredited laboratories to test relative qualities of competing brands and publishing the test results for the benefit of consumers.

1. Right to Safety: The consumer has a right to be protected against goods and services which are hazardous to life and health. For instance, electrical appliances which are manufactured with substandard products or do not conform to the safety norms might cause serious injury. Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications.
2. Right to be Heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells. Many consumer organisations are also working towards this direction and helping consumers in redressal of their grievances.

Importance of 'consumer protection' from consumerpoint of view

1. Consumer Ignorance: In the light of widespread ignorance ofbconsumers about their rights and reliefs available to them, it becomes necessary to educate them about the same so as to achieve consumer awareness.
2. Unorganised Consumers: Consumers need to be organised in the form of consumer organisations which would take care of their interests. Though, in India, we do have consumer organisations which are working in this direction, adequate protection is required to be given to consumers till these organisations become powerful enough to protect and promote the interests of consumers.
3. Widespread Exploitation of Consumers: Consumers might be exploited by unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black-marketing etc. Consumers need protection against such malpractices of the sellers.

1. Right to Choose: The consumer has the freedom to choose from a variety of products at competitive prices. This implies that the marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc. and allow the consumer to make a choice from amongst these.
2. Right to Consumer Education: The consumer has a right to acquire knowledge and to be a well informed consumer throughout life. He should be aware about his rights and the reliefs available to him in case of a product or service falling short of his expectations. Many consumer organisations and some enlightened businesses are taking an active part in educating consumers in this respect.

Reliefs available to a consumer under the Consumer Protection Act, 1986:

1. To remove the defect in goods or deficiency in service.
2. To replace the defective product with a product free from any defect.
3. To refund the price paid for the product.
4. To pay a reasonable amount of compensation for any loss or injury suffered by the consumer due to negligence of the manufacturer.
5. To pay punitive damages in appropriate circumstances.
6. To discontinue this unfair/restrictive trade practice and not to repeat it in future.
7. Not to offer hazardous goods for sale.
8. To withdraw the hazardous goods from sale.
9. To cease manufacture of hazardous products.
10. To pay any amount not less than 5% of the value of the defective products to be credited to the Consumer Welfare Fund or any other organisation/person, to be utilised in the prescribed manner.
11. To issue corrective advertisement to neutralise the effect of a misleading advertisement.
12. To pay adequate costs to the appropriate party.

Consumer protection refers to protection for consumers from unscrupulous, explotative and services providers.Importance of Consumer protection for consumers is due to:

1. Consumer Ignorance: Consumers as ignorant about their rights and relief available to them so it is necessary to educate them.
2. Unorganized Consumers: There is need to organize consumers in the form of associations who would take care of their interest. Adequate protection of consumers is needed till these associations are able to protect. The interest of consumers.
3. Widespread exploitation of consumers: Consumers can be exploited be unscrupulous, exploitative and unfair trade practices. They need protection against such practices.

Consumer responsibilities while purchasing the goods:

1. Consumer should have knowledge about market: He/ She should be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
2. Quality conscious: He/ she must be quality conscious. He/she should buy only standardized goods that carry quality certification marks like ISI, Agmark, FPO, Woolmark etc. While purchasing goods he/ she should check the products, their packaging and label.
3. Use the products safety: He/ She should learn about the risk associated with the products of services, follow manufacture’s instruction and use the product accordingly.
4. Consumer must be cautions: He/ she should not blindly buy a product. He/ she should check the name of the product, manufacture’s name and address, manufacture’s name and address, manufacturing and expiry date, the net weight and retail price.
5. Obtaining cash memo: A consumer must obtain a documentary proof of purchase. It may be a cash memo, bill or receipt. The proof of purchase is must for filling a complaint.
6. Consumer must be honest: Consumer should be honest in his/ her dealings. He/ She should buy only legal goods and services and discourage malpractices like black-marketing, hording, etc.

If the Consumer Court is satisfied with the genuineness of the complaint, it can issue one or more of the following directions to the aggrieved party as reliefs:

1. To remove the defect in goods or the deficiency in service.
2. To replace the defective product with a new one, free from any defect.
3. To refund the price paid for the product.
4. To pay a reasonable amount of compensation for any loss or injury suffered by the consumer due to negligence of the opposite party.
5. To pay punitive damages in appropriate circumstances.
6. To discontinue the unfair/restrictive trade practice and not to repeat the same in future.
7. Not to offer hazardous goods for sale.
8. To withdraw hazardous goods from sale.
9. To cease manufacture of hazardous goods.
10. To pay any amount (not less than 5% of the value of the defective goods to be credited to the Consumer Welfare Fund or any other organisation/person, to be utilised in the prescribed manner.
11. To issue corrective advertisement to neutralize the effect of misleading advertisement.
12. To pay adequate costs to the appropriate party.

Three function performed by NGO are:

1. Educating the general public about consumer rights by organising training programs.
2. Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available and other matters of interest.
3. Carrying out comparative testing of consumer products in accredited laboratories to test relative qualities of competing brands and publishing the test results for the benefit of consumers.

Responsibilities of the consumer to safeguard his interests:

1. Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
2. Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO/ FSSAI mark on food products, Hallmark on jewellery etc.
3. Learn about the risks associated with productsand services, follow manufacturer’s instructions and use the products safely.
4. Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.
5. Assert yourself to ensure that you get a fair deal.
6. Be honest in your dealings and choose only from legal source and discourage unscrupulous practices like black-marketing, hoarding etc.
7. Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.
8. File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services availed. Do not fail to take an action even when the amount involved is small.
9. Form consumer societies which would play an active role in educating consumers and safeguarding their interests.
10. Respect the environment by avoiding waste and littering as it contributes to pollution.

1. Right to seek Redressal: The consumer has a right to get relief in case the product or service falls short of his expectations. The Consumer Protection Act provides a number of reliefs to the consumers including replacement of the product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.
2. Right to Consumer Education: The consumer has a right to acquire knowledge and to be a well informed consumer throughout life. He should be aware about his rights and the reliefs available to him in case of a product or service falling short of his expectations. Many consumer organisations and some enlightened businesses are taking an active part in educating consumers in this respect.

Importance of 'consumer protection' from business point of view:

1. Long-term Interest of Business: Enlightened businesses realise that it is in their long-term interest to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer-base of business.
2. Business uses Society’s Resources: Business organisations use resources which belong to the society. They, thus, have a responsibility to supply such products and render such services which are in public interest and would not impair public confidence in them.
3. Moral Justification: It is the moral duty of any business to take care of consumer’s interest and avoid any form of their exploitation. Thus, a business must avoid unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black marketing etc.

1. Right to Choose: The consumer has the freedom to choose from a variety of products at competitive prices. This implies that the marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc. and allow the consumer to make a choice from amongst these.
2. Right to be Heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells. Many consumer organisations are also working towards this direction and helping consumers in redressal of their grievances.

Right to be Informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, directions for use, etc. It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product.
Right to Safety: The consumer has a right to be protected against goods and services which are hazardous to life and health. For instance, electrical appliances which are manufactured with substandard products or do not conform to the safety norms might cause serious injury. Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications.

Consumer protection plays an important role for businesses in the following ways:

1. Long-Term Interest: For any business, consumer satisfaction is essential. In today's times, with increasing competition, consumer satisfaction has become all the more important. As the organisation takes care of the interests of consumers, it builds goodwill and reputation in the market. This in turn helps in increasing the sales and profits of the business. Thus, protecting consumer's interests benefits the business in the long run.
2. Use of Resources: Any business survives on the basis of society. It uses the resources of society for its various production activities. It earns profits with the sale of these goods and services to society. Thus, the business must take care of the interest of society and supply goods and services which adhere to the overall interests and well-being of society.

The functions performed by consumer organisation are as follows:

1. One of the main tasks of consumer organisation is to create awareness among the consumers with regard to their rights and responsibilities. For this it organises various workshops and publishes regular journals.
2. It conducts research with regard to various consumer problems and other areas of consumer interest.
3. It assists the consumers to file complaints against fraudulent practices.
4. It keeps a tab on malpractice such as black marketing and adulteration. It informs the concerned government authorities such that appropriate action can be taken.

While buying a product or service, a consumer should take the following precautions:

1. See the name of the product, the manufacturer's name and address.
2. Date of manufacture and date of expiry.
3. Net weight.
4. Standardisation mark.
5. Maximum retail price.
6. Directions for using the product, if any.
7. See that the packet was properly sealed and not puffed, torn or in a bad condition.

While making the purchase, following points should be kept in mind:

1. She should ask for complete information about the quality, brand, etc.
2. She should look for quality assurance and standardisation mark.
3. She should check the date of manufacturing, expiry, etc.

A complaint can be made to the appropriate state commission when the value of the goods and services, along with compensation claim exceeds Rs.20 lakhs but does not exceed Rs 1 crore. The appeals against the orders of a District Forum can also be filed before the state commission.

Six reliefs available to Sanket, if he complaints and the consumer court is satisfied about the genuineness of the complaint are:

1. Removal of defect from the goods.
2. Replacement of goods.
3. Refund of the price paid.
4. Amount as compensation for loss or injury suffered.
5. Removal of deficiency in services Discontinuance of unfair trade practices.
6. Stopping the sale of hazardous goods.
7. Withdrawal of hazardous goods from being offered for sale.
8. Payment of adequate costs to parties.

Right to Consumer Education: Consumer education refers to educating the consumer constantly with regard to their rights. In other words, consumers must be aware of the rights they enjoy against the loss they suffer on account of goods and services purchased by them. Government has taken several measures to educate the consumers. For instance, Ministry of Civil Supplies publishes a quarterly magazine under the title “Upbhokta Jagran”. Doordarshan telecasts a programme like the “Sanrakshan Upbhokta Ka” and apart from this, Consumer Day is observed on March 15 every year.

Indira Gandhi National Open University (IGNOU) has made a beginning by developing a comprehensive syllabus which provides the basis of framework for other universities to develop a curriculum for consumer education. The Kakitaya University in Warangal, Andhra Pradesh, is already running one year postgraduate course in consumer law. The Maharashtra Open University in Pune is also offering courses in consumer education. The Central Board of Secondary Education (CBSE) has published a teachers' manual on consumer education which provides guidelines and examples by which cocurricular activities can be orgainsed and acted upon for creating awareness among school students.

A complaint may be filed by the complainant or his authorised agent in person or by post. There is no fee for filing a complaint. A complaint should be in writing and it should contain the following information:

1. The name, description and address of the complainant.
2. The name, description and address of the opposite party or parties, as far as they can be ascertained.
3. The facts relating to complaint and when and where it arose.
4. Documents if any, in support of the allegations contained in the complaint.
5. Details of the relief which a complainant is seeking.

1.  

1. Right to choose: The right to choice deals with the issue of choosing between different alternatives. The right to choice can be defined as an assurance, whenever possible, of availability, ability and access to a variety of products and services at competitive prices.
2. Right to be informed: Consumers should have the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, so as to make the right decision and protect themselves against abusive practices.

2. Two responsibilities of a consumer that he should always kept in his mind while purchasing are:

1. A consumer should buy only standardized goods as they provide quality assurance.
2. A consumer should ask for cash memo on purchase of any good or service.

1. Common Cause, Delhi.
2. Consumer Coordination Council, Delhi.
3. Voluntary Organisation in Interest of Consumer Education, Delhi.

Following consumer rights are taken care of by the company:

1. Right to Safety: The company uses organic plant extract to produce its products which are non allergic and beneficial for every type of skin.
2. Right to Choose: The product is made available in different packs and sizes.
3. Right to be Informed: The label of the product contains full information about the ingredients, batch number, date of manufacture and expiry price etc.
4. Right to be Heard: The company has set up its customer care cell to handle all sort of queries of its customer.

Three means of consumer protection are:

1. Self-regulation by business: Enlightened business firms realise that it is in their long-term interest to serve the customers well. For this, they usually set up their customer services and redessal cells.
2. Business associations: Associations of trade, commerce and business like CII and FICCI lay down the code of conduct for their members for dealing with customers.
3. Government: The government can protect the consumers interest by enacting various legislations.

Following actions can be taken:

1. She should force him to refund the extra price paid by her.
2. She can make her friend circle aware about the wrong practices of the seller and ask them not to buy books from that bookseller.
3. She can inform to the publication house, whose books are being sold by that bookseller at wrong price, so that appropriate actions can be taken.

They are as follows:

1. i. Consumer must exercise his Rights.
2. Cautious Consumer/ do not buy Blindly.
3. Filing complaint for the redressal of genuine grievances.
4. Consumer must be Quality Conscious/ should not compromise on Quality.
5. Advertisements Often Exaggerate/ Beware of False Advertisement.
6. Do not forget to Get Receipt and Guarantee/ Warranty Card.

As I am associated with media, it is my duty to protect the interest of consumers. I can launch a consumer awareness campaign or publish an article in newspaper as follows: Follow smart shopping tips:

1. Take bill/ cash memo of every purchase.
2. Check date of expiry and manufacturing before leaving the counter.
3. Do not pay more than MRP (Maximum Retail Price).
4. Consumers be aware, approach 1800-11-4000 (Toll Free for MTNL/BSNL) for any complaints of products services.

1. The two other parties besides government who can file a case under Consumer Protection Act 1986 are any consumer and any registered consumers' association.
2. The government filed a suit in National Consumer Disputes Redressal Commission (NCDRC) and at no other level of the three tier redressal system because a complaint has to be made to the National Commission only when the value of the goods or services along with the compensation claimed, exceeds ₹ 1 crore.

Complaint means any allegation in writing in regard to one or more of the following:

1. Complainant has suffered loss or damage as a result of any unfair trade practice or restrictive trade practice adopted by any trader.
2. Goods bought by him suffer from one or more defects.
3. Services hired or availed of suffer from any deficiency in that respect.
4. Trader has charged a price in excess of the price fixed by law or displayed on the goods or package.
5. Goods are hazardous to life and property.

The one who can file a complaint before the appropriate consumer forum should be:

1. Any consumer.
2. Any registered 'consumers' association.
3. The Central Government or any State Government.
4. One or more consumers, on behalf of numerous consumers having the same interest.
5. A legal heir or representative of a deceased consumer.

A complaint can be made by:

1. Any consumer.
2. Any registered consumer’s association.
3. The Central Government or any State Government.
4. One or more consumers, on behalf of numerous consumers having the same interest.
5. A legal heir or representative of a deceased consumer.

He can appeal before the District Forum as in this, such complaints can be filed whose claim is less than ₹ 20 lakh. On receiving the complaint, the District Forum shall refer the complaint to the opposite party. After being satisfied with the genuineness of complainant, it passes orders such as remove the defects in goods, return the price paid or pay compensation, etc.

1. The approach of Caveat Emptor means 'Let the buyer beware'.
2. The approach of Caveat Venditor means 'Let the seller beware'.
3. The change has taken place because a consumer is said to be a king in the current competitive market and all the marketing efforts of a firm revolve around him.

As per the Consumer Protection Act, 1986, a consumer is:

1. Any person who buys any good for a consideration which has been paid or promised or partly paid and partly promised or under any scheme of deferred payment. It includes any user of such goods, when such use is made with the approval of the buyer, but does not include a person who obtains goods for re-sale or any commercial purpose.
2. Any person who hires or avails any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment. It includes any beneficiary of services when such services are availed of with the approval of the person concerned, but does not include a person who avails of such services for any commercial purpose.

These non-government consumer organisations perform the following functions:

1. Accelerating Consumer Awareness/ Educating Consumers: The first priority of consumer organisation is to accelerate consumer awareness towards their rights.

To accomplish this task following efforts are made:

1. To publish brochures, journals and monographs.
2. To arrange conferences, seminars and workshops.

2. Collecting Data on Different Products and Testing them: These organisations collect samples of different products from time to time and test them. After that the results of tests are declared to public. In this way, these organisations provide prior information to consumers about the authenticity of product and protects them.
3. Filing Suit on behalf of Consumers: Whenever a consumer fails to raise his voice of protection regarding his complaints, these consumers’ organisations come to his rescue and file a case in the court. They also run voluntary complaint centres for the guidance of consumers.

1. Suresh is depicting the importance of consumerprotection from the consumer's point of view, whereas Mahesh is depicting the importance of consumer protection from business point of view.
2. The Consumer Protection Act, 1986

1. Consumer Guidance Society of India, Mumbai.
2. Karnataka Consumer Service Society, Bengaluru..
3. Consumer Protection Council, Ahmedabad.

1. Endangering the lives.
2. Violation of law.
3. False information to consumers.

A complaint can be filed under the Consumer Protection Act, 1986 within two years from the date on which the cause of action has arisen. However, a complaint may be entertained even after the expiry of the said two years, if the complainant satisfies the Consumer Courts that he has sufficient cause for not filing the complaint within such period.

From the Point of View of Business: Business needs consumers as much as consumers need business. Therefore, business should also join hands in protecting consumers’ interest.
Its importance is highlighted by the following facts:

1. Long Term Interest of Business: Every business wants to enjoy long existence. This is possible only when business firms provide absolute satisfaction to the consumers. A firm that succeeds in satisfying the consumers, the consumers themselves turn to such a firm for buying their products time and again and they tell others also about their satisfaction. In this way, the number of customers for that firm goes up and the firm continues to live for a long time. Paying attention to the satisfaction of the consumers is nothing but consumer protection.
2. Business Uses Society’s Resources: Every business uses various resources, e.g., material, machinery, human, capital, etc. All these resources are supplied by society. From this point of view, it becomes the responsibility of business to provide better facilities to society. By doing this and through the medium of consumer protection business gets an opportunity to discharge its responsibility towards society.
3. Government Intervention: By ignoring consumers’ interest, business is almost inviting government intervention. Government intervention in defence of consumers’ interest is certainly a set back for any firm. This is why every firm wants to avoid such a situation. Such a situation can be avoided only if the consumers’ interest is taken care of. Doing so means taking care of consumers’ protection.

The main objective of the Consumer Protection Act, 1986 is to protect the interests of consumers in India. It aims to provide a speedy and simple redressal to consumers' grievances. It provides effective safeguards to consumers against various types of exploitations and unfair trade practices. The Act has created special consumer courts for enforcement of the rights of consumers. It provides a convenient and 9 inexpensive procedure for redressal of grievances of consumers.

1. Deterioration of quality of products.
2. Reduction in quantity of the products.
3. Bad effects on health of consumers.

There is a three tier judicial machinery to deal with consumers' grievances and disputes:

1. District Forums to deal with all complaints where the value of goods or services and compensation claimed does not exceed ₹ 20 lacs.
2. State commission to deal with cases where the value or claim for compensation exceeds ₹ 20 lacs, but does not exceed ₹ 1 crore.
3. National commission to take up all cases exceeding the value of ₹ 1 crore.

1. Coverage of Items: This Act is applicable on all the products and services, until or unless any product or service is especially debarred out of the scope of this Act by the Central Government.
2. Coverage of Sectors: This Act is applicable to all the areas whether private, public or cooperative.
3. Compensatory Nature of Provisions: Many Acts have been passed for the help of consumers. Consumers enjoy the benefits of these Acts but if a consumer wishes the Consumer Protection Act can provide extra help. As a result the nature of provisions of this Act is compensating for the loss or providing extra help. Consumer is totally free to enjoy the benefits provided in the Act.

The importance of consumers’ protection from the point of view of the consumers can be made clear with the help of the following points:

1. Consumer's Ignorance: Generally, the consumers are not aware of their rights. It is only because of this ignorance that they cannot raise their voice against their exploitation rampart in the market. They bear this exploitation ungrudgingly thinking it as a part of the market. Hence, they remain inactive in this respect. Therefore, it has become necessary in public interest that they should be educated about their rights so that they become activated.
2. Unorganised Consumers: Consumers are unorganised and this fact alone highlights the importance of consumers’ protection. A single consumer raising his voice against exploitation is not as effective as the voice of an organised consumers’ body can be. So far the consumers have not shown such an attitude that they should raise their voice in an organised manner. Consumers’ protection encourages the consumers to organise themselves.
3. Widespread Exploitation of Consumers: These days consumers are being exploited on a large scale.

Following are some of the examples of their exploitation:

1. Adulteration in consumers’ products.
2. Inferior quality of goods and services.
3. Misleading advertisement.

Consumers’ protection is absolutely necessary in order to get rid of such exploitation.

1. Harmful for health.
2. Adulteration is violation of law.
3. False information to consumers.