Consumer Protection Act 2019 vs. 1986: What Has Changed?

Kajal Tyagi is a dedicated and highly skilled advocate with a BBA LLB (Hons.) degree from Guru Gobind Singh Indraprastha University, New Delhi, Read More

Abstract

The Consumer Protection Act of 2019[1] marks a significant update to India’s consumer protection framework, replacing the earlier Act of 1986 to better suit the evolving market landscape. Although the earlier legislation was groundbreaking, it struggled to tackle contemporary challenges like e-commerce, digital transactions, and deceptive advertising practices. The newly proposed Act brings essential updates, such as the establishment of the Central Consumer Protection Authority (CCPA), regulations for product liability, enhanced jurisdiction for resolving consumer disputes, and more efficient complaint resolution methods utilizing online platforms and video conferencing.

This article explores a thorough comparison between the two Acts, emphasizing the broader definition of “consumer”, more stringent penalties, enhanced consumer rights, and regulations aimed at curbing unfair practices in digital markets. It discusses the practical effects for consumers, like quicker resolution of complaints and greater accountability, while also highlighting the compliance challenges businesses, particularly micro, small, and medium enterprises (MSMEs), may face.

Despite its advantages, the 2019 Act encounters obstacles, such as limited resources for enforcement bodies, the intricacies of implementation, and a significant lack of awareness among consumers. The article concludes by stressing the need for laws to keep pace with market developments and advocates for better consumer education, effective enforcement, and support for businesses to foster a fair and transparent marketplace.

Keywords: Consumer Protection Act, 2019; Consumer Protection Act, 1986; Central Consumer Protection Authority; e-commerce; digital payments; product liability; grievance resolution processes; misleading advertising; MSMEs; consumer awareness.

Introduction:

Consumer protection is essential for maintaining fairness in the marketplace. In India, the journey began with the Consumer Protection Act of 1986[2], the first major law aimed at ensuring consumer rights. As the marketplace has changed over the past thirty years, it became evident that substantial updates were necessary, resulting in the launch of the Consumer Protection Act, 2019.

Overview of the Consumer Protection Act, 1986

1. Context and Historical Background: The Consumer Protection Act of 1986 was a groundbreaking piece of legislation designed to safeguard consumers against unfair treatment and exploitation in the marketplace. This law was established at a time when there was a growing awareness of consumer rights worldwide, largely inspired by the consumer protection guidelines set forth by the United Nations.[3] The system introduced a three-level framework to handle consumer disputes, featuring District, State, and National Consumer Dispute Redressal Commissions. This approach provides a streamlined and affordable method for consumers to resolve their issues, eliminating the need to turn to conventional court proceedings.[4]
2. Key Objectives and Limitations: The core goals of the 1986 Act included:

• Promoting and protecting consumer rights.
• Offering a platform for addressing complaints related to faulty goods, inadequate services, and unjust trade practices.

Despite its achievements, the Act faced notable shortcomings:

• It didn’t account for new markets like e-commerce and digital services, which were non-existent at the time.
• The grievance resolution process often suffered from delays attributed to backlogs and procedural inefficiencies.
• There was minimal accountability regarding misleading advertisements and defective products.

Why the Act Was Updated in 2019

1. Need for Modernization 

   Since 1986, India’s consumer market has transformed rapidly. The growth of online shopping, electronic payments, and international trade has exposed weaknesses in the current legal framework. Consumers began to encounter issues such as:

   • A lack of accountability in online shopping.
   • No provisions for addressing digital fraud or unfair contracts.
   • Limited ways to tackle misleading endorsements in advertising.

   Given these challenges, the 1986 Act could not adequately protect consumers, necessitating an update to the legal framework.[5] 

2. Aim to Strengthen Consumer Rights and Simplify Grievance Redressal

The Consumer Protection Act of 2019 was enacted to serve two key objectives:

• Strengthening Consumer Rights:

The new Act broadened consumer rights to encompass product liability, protections against unfair contracts, and regulations for e-commerce platforms.

• Simplifying Grievance Redressal:

It implemented a system for filing complaints online, established deadlines for resolving issues, and created the Central Consumer Protection Authority (CCPA)[6] to provide faster and more effective ways for consumers to seek redress.

The shift from the 1986 Act to the 2019 Act demonstrates India’s commitment to updating its consumer protection laws to address the needs of today’s market. By correcting the limitations of the earlier legislation and incorporating new measures for contemporary challenges, the 2019 Act seeks to strengthen consumer rights and enhance business responsibility.

Key Updates in the Consumer Protection Act, 2019:

The Consumer Protection Act of 2019 aims to strengthen consumer rights and streamline the process for resolving complaints. This revised legislation brings substantial updates compared to the 1986 version, addressing the evolving needs of consumers in today’s technology-driven and e-commerce-focused environment. Here are the main updates brought about by the 2019 Act:

1. Expanded Coverage

The 2019 Act broadens its reach by including e-commerce platforms and digital transactions, which were not specifically mentioned in the previous version. The term “consumer” has been expanded to include people who shop online, which means enhanced safeguards are now in place for digital buyers.

2. Creation of the Consumer Protection Authority

One of the standout elements of the new Act is the establishment of the Central Consumer Protection Authority (CCPA). This entity has the permission to:

• Investigate breaches of consumer rights.
• Launch collective legal actions to advocate for consumer rights.
• Impose penalties on businesses that engage in unfair practices or misleading advertising.

The CCPA enhances consumer advocacy and ensures businesses are held accountable.

3. Updated Jurisdiction Limits

The Act revises the monetary limits for consumer dispute resolution:

• Claims up to ₹1 crore can be addressed by District Commissions, ensuring local resolution for smaller disputes.
• For claims ranging from ₹1 crore to ₹10 crore, State Commissions take charge, providing a broader jurisdiction for mid-level claims.
• When it comes to substantial claims exceeding ₹10 crore, the National Commission steps in, equipped to manage high-value disputes at a national level.

This structured approach clarifies jurisdiction based on the value of goods or services, streamlining dispute resolution.

4. Easier Complaint Filing

The 2019 Act simplifies the process for consumers to file complaints by introducing online portals. Furthermore, complaints can be lodged from any location, and consumers can attend hearings via video conferencing, making the system more accessible and user-friendly.

5. Increased Focus on E-Commerce

To address the specific challenges posed by online shopping, the government introduced the Consumer Protection (E-Commerce) Rules, 2020[7], as part of the 2019 Act. These regulations aim to safeguard consumers against:

• Unethical trading methods
• Fraudulent actions.
• Misleading advertisements on e-commerce platforms.

Online retailers must maintain transparency and engage in fair dealings with consumers.

6. Tougher Regulations on Misleading Ads

The Act holds endorsers, manufacturers, and sellers strictly liable for misleading advertisements. It prescribes penalties and corrective measures for those engaged in deceptive practices, addressing concerns around false claims in marketing.

7. Manufacturer Accountability and Product Liability

A significant addition in the 2019 Act is the concept of product liability, making manufacturers, service providers, and sellers accountable for any harm caused by defective products or services.[8] Clear criteria for claiming damages have been established, ensuring robust protection for consumers.

The Consumer Protection Act of 2019 represents a significant step forward in empowering consumers by effectively tackling modern challenges they face. By integrating technological progress and filling the gaps left by the 1986 Act, this new law fosters greater transparency, accountability, and accessibility, establishing a solid foundation for consumer rights in India.

Overview of Essential Revisions:

The Consumer Protection Act of 2019 made important improvements to address the shortcomings of the 1986 law, ensuring it better meets the needs of today’s consumers. Here’s an overview of the most important changes:

1. Improved Grievance Resolution

   The 1986 Act established Consumer Dispute Redressal Commissions at various levels—District, State, and National—to address consumer grievances. However, it encountered significant challenges related to delays and inefficiencies in the resolution process. The 2019 Act remedies this by:

   • Raising the monetary limits for commission jurisdiction to match contemporary economic conditions.
   • Allowing online complaint submissions and virtual hearings for easier access to justice.
   • Establishing strict timelines for dispute resolution to enable quicker outcomes compared to the lengthy processes of the earlier Act.
2. Stricter Penalties and Enhanced Enforcement

The revised legislation introduces stricter penalties for unfair trade practices and breaches of consumer rights. In contrast to the previous version, the 2019 Act grants enhanced authority to the Central Consumer Protection Authority (CCPA) to:

1. Investigate complaints.
2. Impose fines on businesses that violate regulations.
3. Mandate the recall of faulty products or the removal of misleading advertisements.

This new enforcement mechanism boosts accountability and offers stronger consumer protection.

3. Expanded Consumer Rights and Awareness Initiatives

While the 1986 Act recognized six fundamental consumer rights, the 2019 Act fortifies these rights by:

1. Addressing modern concerns like misleading ads, unfair contracts, and product liability.
2. Implementing educational initiatives to ensure consumers are well-informed about their rights and the various options for seeking redress.

This shift emphasizes a proactive approach over the previous reactive framework.

4. Navigating the Online and E-Commerce Environment

The original 1986 Act did not cater to digital transactions or the growth of e-commerce, leaving consumers vulnerable. The 2019 Act fills this gap by:

• Applying its rules to online marketplaces and digital services.
• Introducing the Consumer Protection (E-Commerce) Rules, 2020, designed to promote fairness and safeguard against fraudulent activities in online transactions.
• Holding e-commerce platforms accountable to guarantee a safe shopping experience.

The 2019 Act not only revitalizes the provisions of the 1986 Act but also establishes a comprehensive framework to tackle the challenges posed by a rapidly changing consumer landscape. By enhancing grievance mechanisms, instituting stricter penalties, broadening consumer rights, and addressing digital issues, it prioritizes consumer interests amid economic and technological progress.

Understanding the Impact of the Consumer Protection Act, 2019 on Consumers and Businesses:

The Consumer Protection Act, 2019, significantly reshapes the landscape for consumers and businesses alike, introducing vital reforms to enhance transparency, accountability, and efficiency in their interactions. Here’s a breakdown of its practical implications:

Consumer Advantages

The 2019 Act offers numerous benefits to consumers, including:

1. Quicker Resolution of Issues

• Online complaint platforms and video hearings streamline dispute resolution, saving time and effort.
• Set timelines for case resolutions lead to faster outcomes than the previous, often sluggish, processes.
  2. Greater Accountability

• The creation of the Central Consumer Protection Authority (CCPA) enables active monitoring of deceptive advertising and unfair business practices.
• Stricter penalties for violations build consumer confidence and discourage malpractice.

3. Enhanced Protection

• The Act broadens its scope to include digital transactions, e-commerce, and product liability, ensuring comprehensive consumer protection in the digital age.
• Provisions tackling unfair contracts, misleading endorsements, and defective products empower consumers to seek redress effectively.

Business Responsibilities

With the 2019 Act comes a heightened set of obligations for businesses, emphasizing compliance with rigorous consumer protection standards:[9]

1. Adherence to New Regulations

• For e-commerce businesses, adhering to the Consumer Protection (E-Commerce) Rules, 2020 is essential. This means being transparent about pricing, having straightforward refund policies, and establishing effective systems to handle customer complaints.
• Both traditional and digital marketplaces must provide accurate labeling and uphold fair practice standards.
  2. Mandatory Transparency
• Businesses are required to eliminate deceptive advertising and provide complete product and service information.
• Liability also extends to endorsers and manufacturers, ensuring ethical conduct across the board.
  3. Accountability for Defective Products
• The implementation of product liability clauses ensures that manufacturers, sellers, and service providers are responsible for any harm resulting from faulty products or services.
• Businesses must enforce quality checks and preventative measures to mitigate potential legal issues.

The 2019 Act effectively balances consumer empowerment with business accountability. Consumers gain enhanced protections and swifter grievance resolution, while businesses must uphold transparency and ethical practices. Ultimately, the Act seeks to foster trust and fairness, creating a more equitable marketplace for everyone involved.

Challenges and Criticisms:

Although the Consumer Protection Act of 2019 represents a substantial improvement compared to the 1986 version, its rollout has faced several hurdles. Stakeholders, including regulatory authorities, businesses, and consumers, are navigating hurdles in adapting to this new legal landscape. Here are some notable challenges and criticisms:

1. Implementation Hurdles for Authorities and Commissions

The ambitious goals of the Act necessitate strong enforcement, which presents substantial challenges:[11]

• Resource Limitations: Consumer Dispute Redressal Commissions and the Central Consumer Protection Authority (CCPA) frequently grapple with insufficient manpower, inadequate infrastructure, and limited funding, which hinder their effectiveness.
• Resolution Delays: Despite established timelines, backlogs and procedural delays in existing cases continue to impede the objective of quicker dispute resolution.
• Training Needs: Authorities and judicial entities require comprehensive training to effectively grasp and apply the Act’s updated provisions, particularly regarding digital and e-commerce elements.[12]

2. Challenges Faced by Businesses

The Act’s strict liability clauses, aimed at safeguarding consumers, create difficulties for businesses, especially Micro, Small, and Medium Enterprises (MSMEs):

• Compliance Expenses: MSMEs often struggle to allocate the necessary resources for implementing the mandated checks and compliance protocols, leading to increased operational strain.
• Product Liability Issues: The introduction of rigorous product liability standards places undue pressure on small enterprises, potentially resulting in financial hardship during disputes.
• E-Commerce Compliance: Many small online retailers might feel overwhelmed by the comprehensive requirements outlined in the Consumer Protection (E-Commerce) Rules, 2020, which could potentially limit their ability to compete in the market effectively.

3. Consumer Awareness Deficiencies

Many consumers remain unaware of the expanded rights and protections offered by the 2019 Act:

• Outreach Limitations: Many consumers remain unaware of their rights and redress options, despite existing advocacy and awareness programs.
• Digital Accessibility Issues: In rural and semi-urban regions, limited access to digital platforms for filing complaints or comprehending the Act’s provisions restricts its practical usefulness for numerous individuals.
• Cultural Barriers: Many consumers hesitate to pursue complaints due to a lack of trust in the system or fear of prolonged legal processes, indicating a pressing need for confidence-building measures.

The 2019 Consumer Protection Act is a good start, but it needs immediate fixes. Enhancing institutional frameworks, alleviating compliance burdens for smaller businesses, and improving consumer awareness are essential for unlocking the Act’s full potential. By addressing these issues, we can ensure that the law serves the interests of all stakeholders and effectively transforms the consumer-business relationship in India.

Conclusion:

India’s 2019 Consumer Protection Act modernized consumer rights, tackling the challenges of the digital and e-commerce age.

Summary of Key Changes and Their Implications

The Act introduces several important modifications, such as expanded coverage for digital transactions, tougher penalties for noncompliance, and easier processes for consumers to lodge complaints, including online submissions and video conferencing options. The creation of the Central Consumer Protection Authority (CCPA) has strengthened enforcement and accountability, enabling consumers to enjoy enhanced rights and protections. These changes promote greater transparency and ethical conduct among businesses.

The Necessity of Adaptable Laws in a Changing Market

As consumer markets rapidly evolve due to technological advancements and globalization, it is crucial for legislation to keep pace. The 2019 Act exemplifies the necessity for laws to adapt, ensuring that consumers remain protected in a constantly shifting landscape.

Call to Action

To fully harness the potential of the 2019 Act, we recommend the following steps:

• Boosting Consumer Awareness: Implement targeted initiatives to educate consumers about their rights, particularly in rural and semi-urban regions, through campaigns and advocacy efforts.
• Ensuring Effective Implementation: Authorities should tackle resource limitations, streamline procedures, and enforce the Act’s provisions rigorously.
• Supporting Business Compliance and Collaboration: Provide assistance to businesses, particularly MSMEs, through clear guidelines and capacity-building programs to facilitate compliance.

By focusing on these areas, the Consumer Protection Act of 2019 can effectively foster a fair, transparent, and consumer-focused marketplace in India.

Bibliography

1. Consumer Protection Act, 2019, No. 35 of 2019, India Code (2019), available at https://www.indiacode.nic.in/bitstream/123456789/15256/5/A2019-35.pdf#search=Consumer%20Protection%20Act,%202019
2. Consumer Protection Act, 1986, No. 68 of 1986, India Code (1986) (Repealed), available at https://www.indiacode.nic.in/bitstream/123456789/6922/1/consumer_protection_act_1986.pdf
3. United Nations Guidelines for Consumer Protection (1999), available at https://www.un.org/esa/sustdev/publications/consumption_en.pdf
4. Central Consumer Protection Authority (CCPA), Consumer Protection Act, 2019, §§ 10–28, available at

https://doca.gov.in/ccpa/about-us.php#:~:text=The%20Consumer%20Protection%20Act%2C%202019,provisions%20of%20the%20ibid%20Act.

5. Consumer Protection (E-Commerce) Rules, 2020, Gazette of India, G.S.R. 462(E) (July 23, 2020), available at

https://consumeraffairs.nic.in/sites/default/files/E%20commerce%20rules.pdf

6. Kavita v. State of Maharashtra, (1981) SC 1861, available at https://www.casemine.com/commentary/in/supreme-court-guidelines-on-preventive-detention-and-advisory-board-procedures-under-cofeposa:-kavita-v.-state-of-maharashtra/view
7. K. Agarwal, Consumer Protection Law and Practice (10th ed., 2020).
8. Press Information Bureau, Ministry of Consumer Affairs, Food & Public Distribution, Features of Consumer Protection Act 2019, PIB Release (July 20, 2020), available at https://pib.gov.in/PressReleasePage.aspx?PRID=1639925
9. Ratanlal & Dhirajlal, The Law of Torts (28th ed., 2020), available at

https://store.lexisnexis.in/index.php?route=product/product&product_id=2517&srsltid=AfmBOoqIsIvDN5dKyfpD1pY_gJfY3BFjfSIllOd5aXLGQ6cMHZ8YHPwW

10. D. Basu, Shorter Constitution of India (16th ed., 2022), available at

https://store.lexisnexis.in/index.php?route=product/product&product_id=2686&srsltid=AfmBOoqKIo3CBb0GrBaj5eVI4B4psRkOt13vwrsEEFQQ2v-3pMAaPdnJ

11. Anwesha Panda, The Consumer Protection Act 2019 and Its Impact on the E-Commerce Sector in India: Navigating the Consumer Landscape in the Digital Era, International Journal of Creative Research Thoughts, Volume 12, Issue 1, January 2024, pp. e765 to e779, available at https://www.ijcrt.org/papers/IJCRT2401577.pdf
12. Ministry of Consumer Affairs, Food & Public Distribution, Government of India, Annual Report on Consumer Affairs (2023), available at https://consumeraffairs.nic.in/sites/default/files/file-uploads/annualreports/1729492569_AR_2023_2024.pdf

[1] Consumer Protection Act, 2019, No. 35 of 2019, India Code (2019).

[2] Consumer Protection Act, 1986, No. 68 of 1986, India Code (1986) (Repealed).

[3] United Nations Guidelines for Consumer Protection (as expanded in 1999).

[4] Kavita v. State of Maharashtra, (1981) SC 1861.

[5] V.K. Agarwal, Consumer Protection Law and Practice (10th ed., 2020).

[6] Central Consumer Protection Authority (CCPA), Consumer Protection Act, 2019, §§ 10–28.

[7] Consumer Protection (E-Commerce) Rules, 2020, Gazette of India, G.S.R. 462(E) (July 23, 2020).

[8] Ratanlal & Dhirajlal, The Law of Torts (28th ed., 2020).

[9] Anwesha Panda, The Consumer Protection Act 2019 and Its Impact on the E-Commerce Sector in India: Navigating the Consumer Landscape in the Digital Era, International Journal of Creative Research Thoughts, Volume 12, Issue 1, January 2024, e765 to e779

[10] Press Information Bureau, Ministry of Consumer Affairs, Food & Public Distribution, Features of Consumer Protection Act 2019, PIB Release (July 20, 2020).

[11] Ministry of Consumer Affairs, Food & Public Distribution, Government of India, Annual Report on Consumer Affairs (2023).

[12] D. D. Basu, Shorter Constitution of India (16th ed., 2022).