Consumer bill to fix adulteration, false advertisements: Experts

Getting away with defective products and misleading advertisements is set to become challenging for makers and retailers/etailers of fast-moving consumer goods (FMCG), durables, electronics, automobiles etc.

The Lok Sabha on Thursday passed the long-pending Consumer Protection Bill 2018, paving way for effective protection of consumer rights and safeguarding their interests.

Speaking to DNA, Praveen Khandelwal, secretary general, Confederation of All India Traders (CAIT), said, "Since the introduction of the crucial bill in the Parliament, we have lobbied a lot for its passage at the earliest. It is noteworthy that the bill has been passed by the Lok Sabha. Hopefully, it would be passed in the Rajya Sabha soon."

The bill focuses on three important points. One, it aims at strengthening the rights of the consumers and it is important that the consumer rights need to be protected. Second, the inclusion of severities in the bill against misleading advertisement. Third, the bill will check adulteration.

The development is crucial especially in the current scenario wherein consumers are forced to go through the hassles of getting defective products replaced and/ or claiming refunds in addition to misleading through deceptive advertisements.

The bill puts the liability of product quality on manufacturers, said Pritee Shah, chief general manager, Consumer Education and Research Centre (CERC). While e-commerce marketplaces will be responsible for the sale of counterfeit products, celebrities will also be responsible, along with the advertisers, for endorsing a product.

"Manufacturers will have to be diligent before the launch of products. They will have to mandatorily recall faulty products. In the case of misleading advertisements, companies will have to withdraw advertisements and bring in corrective advertisements. Celebrities will not be able to blindly endorse products. They can seek clinical reports from manufacturers before endorsing," said Shah.

When contacted, executives from HUL, ITC, Dabur, Marico, Mondelez, Godrej, Samsung, LG and Panasonic were not available for comment. Queries emailed remained unanswered at the time of going to print.

It certainly is a necessary a wake-up call for consumer goods makers to become more responsible, said N Chandramouli, chief executive officer, TRA Research, a brand insight company. The onus gets clearly pinned on the company, but more importantly, if convicted, the brand's trust also will get impacted.

"Consumer should be the ultimate yardstick for judging any such act. And if the consumer has a better say, it's a good thing. However, there can be truant customers too, and companies will have to deal with a small portion of such false claims. All-in-all, if the companies become more responsible towards consumers, it is a good move," said Chandramouli.

The bill proposes the creation of five bureaus catering to different consumer verticals. These bureaus will have suo motu authority to take actions against unfair trade practices and even force companies to recall products. Moreover, the jurisdiction has been liberalised. Cases of up to Rs 50 lakh will be dealt with District Forums, those up to Rs 10 crore by State Commissions and those beyond Rs 10 crore will be dealt with by Central Commission. With online sales getting traction, e-commerce marketplaces will be liable for selling counterfeit and illegal products as well.

The bill has strong provisions to check adulteration and misleading ads penalise manufacturers with a hefty fine as well as imprisonment. "False claims in advertising is as bad for customers as false news is for readers. Such falsity misuses inherent vulnerabilities in the consumer, who inherently trusts brands, till proven otherwise. Claims must be based on strong research by credible third-party studies and not by the brand's own studies. This is perhaps the most important part of the bill," said Chandramouli.

Knowing the loopholes in the law, consumer companies have been misusing it so far. Be it packaging, advertising or POPs, the gullible consumer is being taken for a ride by many big and small brands alike. "We've all been taken in by claims like — 'Strongest', 'Best', 'Improved', 'Extra iron added' so far. Now it's time for brands to be cautious about claims like this," said Chandramouli.

What It Aims At

The Consumer Protection Bill has strong provisions to check adulteration and misleading ads, and to penalise manufacturers with hefty fine as well as imprisonment. Making use of the loopholes in the law, consumer companies have been misusing it so far.