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Tough, new e-commerce rules kick-in next week

21st July, 2020 Economy

Requirement under new consumer protection act:

  • Set up a robust consumer redressal mechanism.
  • The e-commerce entities will have to provide every detail relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options and so on.
  • Mention the country of origin, which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage.
  • Acknowledge the receipt of any consumer complaint within forty-eight hours.
  • Redress the complaint within one month from the date of receipt under this Act.
  • These rules are mandatory and not merely advisories as issued earlier.
  • Sellers cannot refuse to take back goods or withdraw services or refuse refunds, if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform.
  • Prohibit the e-commerce companies from manipulating the price of the goods or services to gain unreasonable profit through unjustified prices.

Consumer Protection act

Rights of a consumer:

  • Right to safety,
  • Right to be informed,
  • Right to choose,
  • Right to be heard,
  • Right to redress
  • Right to represent.

Key Highlights:

  • Widened the definition of 'consumer‘: The definition now includes any person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing Right
  • Enhancement of Territorial Jurisdiction: The 2019 Act now provides an added advantage to the consumers by providing for filing of complaints where the complainant resides or personally works for gain as against the 1986 Act, which only provides for filing of complaint where the opposite party resides or carry on business.
  • Enhancement of Pecuniary Jurisdiction: Right Revised pecuniary limits have been fixed under the New Act.
  • Alternate Dispute Resolution: to ensure speedy resolution of disputes is to provide for referring the disputes to mediation.
  • As per the 2019 Act, the Consumer Forum shall refer the matter to mediation on written consent of both the parties
  • The 2019 Act also provides for establishment of a consumer mediation cell by the respective State Governments in each District Commission and State Commission as well as at the National Commission by the Central Government.
  • E-Complaints: provides for filing of Complaints before the District Forums electronically in accordance with the rules, which are to be prescribed by the Government.
  • Contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing
  • E-Filing of Complaints: provides flexibility to the consumer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. This is unlike the current practice of filing it at the place of purchase or where the seller has its registered office address.
  • Establishment of Central Consumer Protection Authority: Establishment of a regulatory authority known as the Central Consumer Protection Authority (CCPA), with wide powers of enforcement.
  • The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into consumer law violations.
  • The CCPA has been granted wide powers to take suo- moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class action suits, if a consumer complaint affects more than 1 (one) individual.
  • Product Liability & Penal Consequences: Introduced the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation
  • The defence that e-commerce platforms merely act as 'platforms' or 'aggregators' will not be accepted.
  • Endorser’s liability: fixes liability on endorsers considering that there have been numerous instances in the recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors.

Reference: https://www.thehindu.com/news/national/tough-new-e-commerce-rules-kick-in-next-week/article32140542.ece