`consumer protection law

A state or federal law designed to protect consumers

against improperly described, damaged, faulty, and
dangerous goods and services as well as from unfair
trade and credit practices.
In regulatory jurisdictions that provide for it
(comprising most or all developed countries with free
market economies), consumer protection is a group of
laws and organisations designed to ensure
the rights of consumers as well as fair trade,
competition and accurate information in
the marketplace. The laws are designed to prevent the
businesses that engage in fraud or specified unfair
practices from gaining an advantage over competitors.
They may also provide additional protection for those
most vulnerable in society. Consumer protection laws
are a form of government regulation that aim to
protect the rights of consumers. For example, a
government may require businesses to disclose
detailed information about products—particularly in
areas where safety or public health is an issue, such as
food.
Consumer protection is linked to the idea of consumer
rights and to the formation of consumer organisations,
which helps consumers make better choices in the
marketplace and get help with consumer complaints.
Other organisations that promote consumer protection
include government organisations and self-regulating
business organisations such as consumer protection
agencies and organisations, the Federal Trade
Commission in America and Better Business Bureaus in
America, Canada, England, etc.
A consumer is defined as someone who acquires goods
or services for direct use or ownership rather than for
resale or use in production and
manufacturing.Consumer interests can also be
protected by promoting competition in the markets
which directly and indirectly serve consumers,
consistent with economic efficiency, but this topic is
treated in competition law. Consumer protection can
also be asserted via non-government organisations and
individuals as consumer activism.

Reasons for consumer protection

For them to maximise profits, some businesses exploit
consumers by supplying poor quality goods at higher
prices. They adopt unfair trade practices such as
adulteration, boarding, black-marketing,and more.As a
result consumers do not get value for their money. Big
business houses use their power for private gain and to
the detriment of consumers. Consumers are exposed
to physical, environmental and other hazards.
Therefore,consumers need to be protected from
spurious, duplicate and adulterated products, pollution
of air, water and noise, and misleading
advertising.They need protection for to the following
reasons:

>Illiteracy and ignorance:Most consumers are illiterate

and ignorant. They do not understand their rights.
A system is required to protect them from
unscrupulous businessmen.

>Unorganised consumers:In many countries,consumers

are widely dispersed and are not united. They are at
the
mercy of businessmen. On the other hand, producers
and traders are organised and powerful.

>Spurious goods:There is increasing supply of duplicate

products. It is very difficult for an ordinary
consumer to distinguish between a genuine product
and its imitation. He pays the price for the original but
gets a substandard product.It is necessary to protect
consumers from such exploitation.
>Deceptive advertising:Some businessmen give
misleading information about quality, safety and utility
of
products. Consumers are misled by false advertisement
and do not know the real quality of advertised goods.
A mechanism is needed to prevent misleading
advertisements.

>To Stop Unethical Practices:The modern economy is

fiercely competitive and unethical business owners will
cut corners without regard to the health or safety of
the consumers. Unethical practices also produce
incredibly bad service and no consumer should have to
deal with it. One of the group legal services a
Countrywide attorney provides is information about
fraud or what constitutes a defective product. He or
she educates a group legal plan member on what
consumer rights they have and how redress can be
best achieved. If unethical practices merit a court case
being filed, Countrywide attorneys will help plan
members prepare the case to go before the Small
Claims court.
Importance of cp

Importance of Consumer Protection

I. Importance from Consumer Point of View
 Consumer Ignorance: Consumer when seeing it from
their point of view then we have gathered some
aspects to it. Of which, Consumer Ignorance needs
to be taken care of they should know how to
exercise their rights and how to seek reliefs.
 Unorganised Consumer: We need a Consumer
Organisation which can unify the consumers and
help them seek relief with their consumer issues.
 Widespread Exploitation of Consumer: Consumer is
been exploited through the ways of adulteration,
false practice, fake weights, incomplete information
on packaged products, Misleading Advertisements.
For instance, there are many products that claim to
make you fair or reduce your weight but when you
use the products it does not provide what is
promised.
II. Importance from Business Point of View
Do business really need to consider consumer
protection, is there a way which can benefit them as
well? Let us have a look at some of the points which
provide us with some insight :

 Long-Term Interest of Business: If one wants to

increase their customer base in long-term then they
need to make a satisfied customer. A satisfied
 customer with their word of mouth would make
more customer and increase the consumer base.
 Business uses society’s Resources: Business should
not hamper consumer confidence as most of the
resources taken from the society. In turn, business
keeps in mind public interest and provide products
accordingly.
 Social Responsibility: Business have responsibilities
towards the consumer, government bodies and
society and they should work in a way which should
be beneficial to them and the business as in return it
will flourish their business.
 Moral Justice: Business has a moral duty to the
society and consumer and they should take steps
which should not hamper the society or consumer.
They should prevent any sort of exploitation like
adulteration, unfair practices, defective product, fair
price and weight.
 Government Intervention: To avoid the situation of
government intervention in the business which
could be a hectic task. For that business should
design their trade practice in such a way which
would be in the interest of the consumer.
CONSUMER PROTECTION ACT, 1986
1st part
One of the most important milestones in the area of
consumer protection/consumer movement in the
country has been the enactment of the Consumer
Protection Act, 1986. It was a progressive and
comprehensive pieces of legislation of its time, covering
all goods and services. The Act ensures the rights of
consumer for safety, information, choice,
representation, and redressal and consumer education,
and provides for a simple, speedy and inexpensive
redressal to the consumers’ in the nature of a specific
nature and also awards compensation, wherever
appropriate, to the consumer. An exclusive three tier
redressal machinery as an alternative to the civil court
and other legal remedies available in the country has
been established under the Act, wherein an aggrieved
consumer can seek redressal against any defect in the
goods purchased or deficiencies in services availed,
including restrictive/unfair trade practices adopted by
such manufacturer and trader of goods/service
provider. In the past thirty years more than 4.3 million
consumer cases were adjudicated and decided by the
consumer fora.
2nd part
Consumer Protection Act has been implemented(1986)
or we can bring into existence to protect the rights of a
consumer. It protects the consumer from exploitation
that business practice to make profits which in turn
harm the well being of the consumer and society.
This right help to educate the consumer on the right and
responsibilities of being a consumer and how to seek
help or justice when faced exploitation as a consumer. It
teaches the consumer to make right choices and know
what is right and what is wrong.
Who is a consumer according to the Consumer
Protection Act, 1986? A consumer is one that buys good
for consumption and not for the resale or commercial
purpose. The consumer also hires service for
consideration.

Practices to be followed by Business under Consumer

Protection Act
 If any defect found the seller should remove the
mentioned defects from the whole batch or the
goods affected. For example, there have been cases
where car manufacturing unit found a defect in
parts of the vehicle usually they remove the defect
from every unit or they call of the unit.
 They should replace the defective product with a
nondefective product and that product should be of
similar configuration or should be the same as the
product purchased.
  If any defect found the seller should remove the
mentioned defects from the whole batch or the
goods affected. For example, there have been
cases where car manufacturing unit found a defect
in parts of the vehicle usually they remove the
defect from every unit or they call of the unit.
 They should replace the defective product with a
nondefective product and that product should be
of similar configuration or should be the same as
the product purchased.
Salient Features
1. The salient features of Consumer Protection Act (CPA),
1986 are as follows
2. It applies to all goods, services and unfair trade
practices unless specifically exempted by the Central
Government.
3. It covers all sectors-private, public or co-operative.
4. It provides for establishment of consumer protection
councils at the central, state and district levels to
promote and protect the rights of consumers and a
three-tier quasi-judicial machinery to deal with
consumer's grievances and disputes.
5. It provides a statutory recognition to the six rights of
consumers.

Consumer Rights and Responsibilities

Consumer Rights is an insight into what rights consumer
holds when it comes to seller which provide the goods.
What if the goods provided to the consumer by
the business is not up to the standard? Then in that case
– what should a consumer do? To be precise, what
rights consumer have is in the court of law to fight
against the malpractices of the business firms or seller.

Consumer Rights

There are six broad consumer rights defined as per the

Consumer Protection Act, 1986. These are:

Right to Safety
The Consumer Protection Act defines this right as a
protection against goods and services that are
‘hazardous to life and property’. This particularly applies
to medicines, pharmaceuticals, foodstuffs, and
automobiles. The right requires all such products of
critical nature to life and property to be carefully tested
and validated before being marketed to the consumer.

Right to Information
This right mentions the need for consumers to be
informed about the quality and quantity of goods being
sold. They must be informed about the price of the
product and have access to other information specific to
the product that they wish to consume.
Right to Choose
The consumer must have the right to choose between
different products at competitive prices. Thus, the
concept of a competitive market where many sellers sell
similar products must be established to ensure that the
consumer can actually choose what to consume and in
what quantity. This is to avoid monopoly in the market.

Right to Seek Redressal

When a consumer feels exploited, he/she has the right
to approach a consumer courtto file a complaint. A
consumer court is a forum that hears the complaint and
provides justice to the party that has been hurt. Thus, if
the consumer feels he/she has been exploited, they can
approach the court using this right.

Right to be Heard
The purpose of this right is to ensure that the consumer
gets due recognition in consumer courts or redressal
forums. Basically, when a consumer feels exploited, he
has the right to approach a consumer court to voice his
complaint. This right gives him/her due respect that
his/her complaint will be duly heard. The right
empowers consumers to fearlessly voice their concerns
and seek justice in case they are exploited.
Right to Consumer Education
Consumers must be aware of their rights and must have
access to enough information while making
consumption decisions. Such information can help them
to choose what to purchase, how much to purchase and
at what price. Many consumers in India are not even
aware that they are protected by the Act. Unless they
know, they cannot seek justice when they are actually
hurt or exploited.

RESPONSIBILITIES
The Responsibility to be aware of the quality and
safety of goods and services before purchasing.
The Responsibility to gather all the information and
facts available about a product or service as well as to
keep abreast of changes and innovations in the
marketplace.
The Responsibility to Think Independently and make
choices about well considered needs and wants.
The Responsibility to Speak Out, to inform
manufacturers and governments of needs and wants.
The Responsibility to Complain and inform business
and other consumers of dissatisfaction with a product
or service in a fair and honest manner.
The Responsibility to be an Ethical Consumer and to
be fair by not engaging in dishonest practices which
cost all consumers money.
The Responsibility to Respect the Environment and
avoid waste, littering and contribution to pollution.

Responsibilities of a Consumer
The consumer has a certain responsibility to carry as an
aware consumer can bring changes in the society and
would help other consumers to fight the unfair practice
or be aware of it.

 They should be aware of their rights under the

Consumer Protection Act and should practice the
same in case of need.
 They should be well aware of the product they are
buying. Should act as a cautious consumer while
purchasing the product.
 If in case a product is found of anything false or not
satisfactory a complaint should be filed.
 The consumer should ask for a Cash Memo while
making a purchase.
 A customer should check for the standard marks
that have been introduced for the authenticity of
the quality of the product like ISI or Hallmark etc.
What Is the Meaning of Consumer Awareness?
Consumer Awareness is the process of making the
consumer of goods and services aware of his rights. It
involves educating a consumer about safety,
information and the redressal options available to him.

As previously discussed consumer awareness is one of

the most persistent problems the government faces
when it comes to consumer protection. To resolve this
problem the government has come up with various
methods over the years. In fact, it is the main aim of the
Department of Consumer Affairs.

Consumer Awareness in India

One of the most important and successful Consumer
Awareness campaign in recent times has been the “Jago
Grahak Jago” campaign. You must have certainly come
across it. It is a great example of successful consumer
awareness.

Redressal: Three Tier System Under Consumer Act

 District Forum: These fora are set by the district of
the state concerned in each district wherein it
consists of President and two members of which one
should be a woman and is appointed by the State
Government. In this, the complaining party should
not make a complaint more than 20 Lacs and once
the complaint is filed the goods are sent for testing
 and if they found defective the accused party should
compensate and if the party is dissatisfied can make
an appeal with state commission within 30 days.
 State Commission: This is set up by each state It
consists of President and two members. Complains
should be at least 20 lacs and exceed not more than
1 crore. The goods are sent for testing and if found
defective are asked for replacement or
compensation. If not satisfied can make an appeal
within 30 days in front of the National Commission.
 National Commission: Consist of President and 4
members. The complaint must exceed an amount of
1 crore. The goods are sent for testing and if found
defective are asked for replacement or
compensation

Case study
1. magi
Maggi noodles was launched in India in 1984 by Nestle.
It is today the highest soldnoodles in India. With 60%
market share (2010 report)in its bowl, Maggi Noodles
continues to be an undisputed leader for almost 30
years
Abstract
The favourite and the most preferred instant food
product of children, magi noodles, got entangled in its
ethical issues of the ingredients being used. The safety
of the consumers was found to be hazardous inclining
us to give its detailed study with facts and figures. The
study focuses on the destructive positioning and its
aftermath. The corporate social responsibility of nestle
india was tremendously cross questioned with its after
test results, by food regulatory authorities. The public
relations of the company got worsely affected with the
issues stated. It made us further focus on its
repositioning state as well as its policies of managing
the crisis period.
The Crisis
Maggi instant noodles came under the scanner for
three main reasons. The first was the aforementioned
violation of the regulations for adding lead and MSG
into the product. As against the maximum limit of 2.50
parts per million (ppm), the amount of lead detected in
the Maggi samples was perilously high at 17.2 ppm.
The second offence was mentioning 'No added MSG'
on the packaging, which is an act of mislabeling. Also, it
launched 'Maggi Oats Masala Noodles' without
meeting the appropriate norms of standardisation. On
June 5, 2015, a nationwide ban was imposed on Maggi
by FSSAI (Food Safety and Standards Authority of
India).
Prior to the ban, Maggi owned nearly 80% of the
market share in the instant noodles segment. In the
blink of an eye, its share plummeted to zero. The crisis
was grave and it was a state of emergency for Nestle
India. The company was neither prepared for it nor did
it have any immediate plan of action to overcome it. It
only played with fire by initially denying the allegations
of hazardous composition of Maggi. But when it was
proven guilty for the second time, the customers were
furious. There were instances of mass protests by
Maggi lovers who were hurt by the severe breach of
trust. Maggi was losing not only its market share but
also credibility. A three decade long relationship was at
stake. It was time to act before it was too late.
Nestle Acts
Nestle had scarcely imagined that this could be its
worst crisis in decades. Perhaps the magnitude of the
controversy was underestimated at the outset. This
was surprising, given that it was a Swiss multinational
corporation. Apparently, the existing leadership was
taken off-guard and could not take a call over the
future plan of action.
To begin with, in June 2015 itself, Nestle announced a
recall of all its instant noodles from the markets. It
began to be executed within two days. At the same
time, the other step was confidence building measures.
It regularly called for press conferences and also
approached the Bombay High Court for relief, following
which the Court permitted export of Maggi to other
countries. Further, Nestle India sought help from APCO
Worldwide, a US based Public Relations firm. They set
up a mechanism for maintaining customer
relationships, be it through a customer services
helpline or posting FAQs regarding recent
developments on its website, not to mention its
presence on social media platforms like Facebook and
Twitter, where representatives answered all sorts of
questions asked by irate customers.
Nestle decided to destoy more than $50million worth
of magi noodles in india after they were deemed
unsafe by regulators
Repositioning of nestle
After the lift of 5 months ban from magi noodles, the
production got started from its tahilwal plant, himachal
Pradesh with its other plants located at nanjangud,
Karnataka,moga, Punjab, goa, and patnagar, himachal
Pradesh
Facts of revival
1. the food regulator FSSAI on 16th november , 2015
moved to supreme court against the Mumbai high
court order to lift a ban on magi noodles in india. The
FSSAI claimed that the high court favoured the
company.
2. the company stated that they would continue with
the existing formula of the product and would not
change their ingredients.
3. the orders of FSSAI and Maharashtra food regulator
fda was annulled by high court for the ban of 9 variants
of magi noodles. The court stated that the hearing was
not given to the manufacturer which does not entail
the natural justice.
3.on august 13, the Bombay high court gave a
significant respite to the company by lifting the ban on
the sale of the noodle, while also ordering fresh tests
to be conducted in three separate labs to ascertain
that the product complied with the country’s food
safety norms. The court order meant the original
product safety certificate of the watchdog remained
valid.
Recommendations
  The frequent checks/inspection by the
government regulatory authorities is suggested to
be implemented for avoiding the extreme
situations of crisis’s related to food products.
 The philosophy of corporate social responsibility
should not just be a matter of theoretical world
but needs to be compulsively incorporated to
prevent the health hazard of the society.
 The food production industries should focus more
on the nutritional constituents of the food rather
than just to enhance its taste to influence the
targeted population.
Conclusion
The nestle india could succeed in sustaining ad regaini
its lost image ..... see phone.

2. dairy milk
Introduction to Case
Cadbury is a brand which almost everyone knows. Even
after completion of more than 100 years, the brand is
into hearts of many people & it also leaves a significant
mark amidst all the competition. Cadbury stands tall in
food product sector. Cadbury is world’s leader in
chocolates and it is also one of the topmost FMCG
brands in India. Cadbury decided to enter Indian
market in 1948. Cadbury India began its operations in
India by importing chocolates. On 19th July 1948
Cadbury was incorporated in India. Cadbury has a
share of over 67% in the market, which is the highest
Cadbury brand share globally. Cadbury now has 5
manufacturing units all over India. Cadbury operates in
India with following categories of products: Chocolate,
Confectionery, Beverages, Biscuits and Candy.Cadbury
was performing very well since its incorporation in
India But, suddenly in 2003 Cadbury came across a
problem of worms.
In 2003, just a month before Diwali few instances of
worms in its Dairy Milk Bars were reported in
Maharashtra. In eight outlets across Maharashtra
worms were found. In October 2003, customers in
Mumbai complained about finding worms in Cadbury
Dairy Milk Bars.
Problems Faced by Cadbury:
When these worms were found in some of the dairy
milk bars, Maharashtra Food and Drugs Administration
responded quickly to this case and it seized the stocks
of chocolate bars which were manufactured in
Cadbury’s Pune Plant.
Cadbury in defense issued a statement where it
mentioned that problem of worms was not at the
manufacturing stage but the problem arose due to
poor storage facility by the retailers.

FDA denied the statement made by Cadbury. FDA

Commissioner Uttam Khobragade came up with a
statement saying “It was presumed that worms got
into it at the storage level, but then what about the
packing – packaging was not proper or airtight, either
ways it’s a manufacturing defect with unhygienic
conditions or improper packaging.”

Then there were many allegations and counter

allegations between Cadbury and FDA. Due to this
event reputation of Cadbury was hampered. Cadbury
sales went down by 30% which they had expected to
increase by 15% due to negative publicity.

For the first time, Cadbury’s Advertisements went off

air for one and a half months after the Diwali due to
this controversy

Recovery Strategy:
Project Vishwas:
Cadbury was losing on its sales and also reputation was
being hampered. So, recovering from this type of
situation was a challenge for Cadbury. In the month of
October only Cadbury launched Public Relations (PR)
campaign ‘Vishwas’ which was an education initiative
covering 190,000 retailers in key states.

Project Vishwas, a three-pronged program

that addressed the trade, consumers, media and
employees. The project incorporated the following
measures:
For Trade

 A retail monitoring and education program was

launched in which quality checks at over 50,000
retail outlets and educated 190,000 wholesalers
and retailers was done regarding storage
requirements.
 A press ad regarding ‘Facts about Cadbury’ was

also published by Cadbury nationally in 55 trade

publications which were about channel members
taking remedial measures in the company.
 Posters and leaflets on the issue were also

distributed to retailers, encouraging them to share

them with consumers.
 Cadbury also linked the trade with response cell

through a toll-free number and an email id to let

them contact the company directly.
For Media

 The point-of-view of a company was explained to

media, media was also given updates about
 actions initiated by the company, and encouraged
to share them with consumers.
 The company instituted a media desk and

diligently answered every media query, friendly or

not. The company’s managing director urged
media to assure consumers that Cadbury was safe
to eat, but that consumers exercise the usual care
in purchasing a chocolate that they exercise in
purchasing a food item.
 Furthermore, it also promised to implement

packaging changes within two months to ensure

against poor storage. Cadbury’s MD and key
spokespersons had one-to-one sessions with 31
media editors as part of an ‘Outreach’ program
initiated in November 2003.
For Employees

 Employees were also briefed about actions taken

through meetings with senior managers and email
updates from the MD.

Change in Packaging:
 January 2004, the company launched a new

double packaging that was able to wrap even the

smallest 13 gm chocolate in an aluminum foil,
heat-sealed for complete protection from all sides
and further encased in a poly flow pack. The over-
engineered pack, the first of its kind in India, cost a
 lot to a company, but fulfilled the company’s
promise to consumers and media. By investing up
to Rs 15 crore (Rs 150 million) on imported
machinery, Cadbury’s revamped the packaging of
Dairy Milk. The metallic poly-flow was costlier by
10-15 per cent, but Cadbury didn’t hike the pack
price.
 The new packaging was launched in a media
conference. In a conference comparison kits were
distributed. These kits were useful in comparing
old packs and new packs. A video with packaging
and factory shots for television coverage was also
launched.

Ad Campaign:

Just after changing packaging Cadbury roped in

Amitabh Bachchan as a brand ambassador. From the
month January to March 2004, Cadbury came up with
a strong Ad campaign which helped them to get back
the consumer confidence. During this period
Advertising expenses went up by 15% but it really
helped Cadbury to get back its reputation.

Current Situation:
After that Incident Cadbury now takes great care of all
the products they have. Cadbury is currently leading
the market in chocolates segment. Market share of the
Cadbury Dairy Milk is around 35% in India. Cadbury
has not faced any controversy related to products after
that incident.