PU2: Business Studies Chapter 12 Solutions

Chapter 12

Consumer Protection

Part - A

1. State any one unfair trade practice of manufacturers and service providers by which consumers are exploited.

Ans. Consumers are exploited by the  unfair trade practice of manufacturers and service providers like defective and unsafe products.

Also

2. adulteration,

3. false and misleading advertising,

4. hoarding,

5. black-marketing etc.

(any one can be written)

2. State any one regulation which provides legal protection to the consumers.

Ans. The Consumer Protection act, 1986.

Also

2. The Indian Contract Act, 1872

3. The Sale of Goods Act, 1930

4. The Essential Commodities Act, 1955

5. The Agricultural Produce (Grading and Marking) Act, 1937

6. The Prevention of Food Adulteration Act, 1954

7. The standards of Weights and Measures Act, 1976.

8. The Trade Marks Act, 1999

9. The Competition Act, 2002

10. The Bureau of Indian Standards Act, 1986

(any one can be written)

3. In which year the Consumer Protection Act was enacted?

Ans. 1986

4. Who is a Consumer?

Ans. A ‘consumer’ is generally understood as a person who uses or consumes goods or avails of any service.

5. Name any one redressal machinery/agency set up under Consumer Protection Act to redress consumer grievances.

Ans. District Forum

Also

2. State Commision

3. National Commission

(any one can be written)

 

6. What is the monetary limit of claim in District Consumer Disputes Redressal Forum?

Ans. A complaint can be made to the appropriate District Forum when the value of the goods or services in question, along with the compensation claimed, does not exceed Rs. 20 lakhs.

7. State the monetary limit of claim in State Consumer Disputes Redressal Commission.

Ans. A complaint can be made to the appropriate State Commission when the value of the goods or services in question, along with the compensation claimed, exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore.

8. What is the monetary limit of claim in National Consumer Disputes Redressal Commission?

Ans. A complaint can be made to the National Commission when the value of the goods or services in question, along with the compensation claimed, exceeds Rs. 1 crore.

9. Name any one Consumer Organisation/NGO engaged in protecting and promoting consumers’ interests.

Ans. (i). Consumer Coordination Council, Delhi

Also

(ii). Common Cause, Delhi

(iii). Voluntary Organisation in Interest of Consumer Education (VOICE), Delhi

(iv). Consumer Education and Research Centre (CERC), Ahmedabad

(v). Consumer Protection Council (CPC), Ahmedabad

(vi). Consumer Guidance Society of India (CGSI), Mumbai

(vii). Mumbai Grahak Panchayat, Mumbai

(viii). Karnataka Consumer Service Society, Bangalore

(ix). Consumers’ Association, Kolkata

(x). Consumer Unity and Trust Society(CUTS), Jaipur

(any one can be written)

Part - B

10. What is Consumer Protection?

Ans. Consumer Protection has a wide agenda. It not only includes educating consumers about their rights and responsibilities, but also helps in getting their grievances redressed. Thus it requires:

1. a judicial machinery for protecting the interests of consumers.

2. the consumers to get together and form themselves into consumer associations for protection and promotion of their interests.

11. State any two reasons to emphasise the importance of consumer protection from Consumers’ point of view.

Ans. 1. Consumer Ignorance about their rights and reliefs available to them.

2. Unorganised consumers.

Also

3. Widespread exploitation of consumers by unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black-marketing etc.

(any two can be written)

12. State any two reasons to emphasise the importance of consumer protection from the point of view of Business.

Ans. 1. It is in their long-term interest of the business to satisfy their customers.

2. Business has a responsibility towards society as it uses society’s  resources.

Also

3. A business has social responsibilities towards various interest groups.

4. It is the moral duty of any business to take care of consumer’s interest and avoid any form of their exploitation.

5. Fear of  government intervention which will impair and tarnish the image of the company.

(any two can be written)

13. Write any two Consumer Rights.

Ans. 1. Right to Safety

2. Right to be informed.

Also

3. Right to choose

4. Right to be heard

5. Right to seek redressal

6. right to consumer education.

(any two can be written)

14. Who can file a complaint before the appropriate consumer forum? (any two)

Ans. A complaint before the appropriate consumer forum can be made by:

(i). Any consumer can file a complaint on his/her own and does not need the services of advocate/professionals;

(ii). Any registered consumers’ association;

Also

(iii). The Central Government or any State Government;

(iv). One or more consumers, on behalf of numerous consumers having the same interest; and

(v). A legal heir or representative of a deceased consumer.

(vi). A complainant under Section 2 (b) of the Consumer Protection Act 1986.

Part - C

15. Explain any four Rights of consumers.

Ans. The Consumer Protection Act 1986 confers certain rights on the consumers and empowers them to fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers. These Rights are:

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. So, consumers are educated to use only ISI marked appliances.

2. 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.

So, the manufactures have to provide such information on the package and label of the product.

3. 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.

4. 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.

Also

5. 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 defects in the product, compensation paid for any loss or injury suffered by the consumer, etc.

6. Right to Consumer Education:The consumer has a right to acquire knowledge and to be a well informed consumer throughout life.

Many consumer organisations and some enlightened businesses are taking an active part in educating consumers in this respect.

(any four can be written)

16. State any four responsibilities of consumers while purchasing, using and consuming goods and services.

Ans. A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services -

(i). Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.

(ii). Buy only standardised goods as they provide quality assurance.Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewelry etc.

(iii). Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely.

(iv). Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.

Also

(v). Assert yourself to ensure that you get a fair deal.

(vi). Be honest in your dealings. Choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding etc.

(vii). Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.

(viii). 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 action even when the amount involved is small.

(ix). Form consumer societies which would play an active part in educating consumers and safeguarding their interests.

(x). Respect the environment. Avoid waste, littering and contributing to pollution.

(any four can be written)

17. Explain any four ways in which the objective of consumer protection can be achieved.

Ans. There are various ways in which the objective of consumer protection can be achieved.

1. Self regulation by business: Enlightened business firms realise that it is in their long-term interest to serve the customers well. Socially responsible firms follow ethical standards and practices in dealing with their customers. Many firms have set up their customer service and grievance cells to redress the problems and grievances of their consumers.

2. Business associations: The associations of trade, commerce and business like Federation of Indian Chambers of Commerce of India (FICCI) and Confederation of Indian Industries (CII) have laid down their code of conduct which lay down for their members the guidelines in their dealings with the customers.

3. Consumer awareness: A consumer, who is well-informed about his rights and the reliefs available to him, would be in a position to raise his voice against any unfair trade practices or unscrupulous exploitation. In addition to this, an understanding of his responsibilities would also enable a consumer to safeguard his interests.

Jago grahak jago is a multimedia campaign undertaken by the Department of Consumer Affairs, GOI for increasing consumer awareness.

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

Also

5. Government: The government can protect the interests of the consumers by enacting various measures.

For example, (a) the GOI has set up a toll-free national consumer Helpline Number 1800114000 (9:30 am – 5:30 pm) for this purpose.

(b) The legal framework in India encompasses various legislations which provide protection to consumers like the Consumer Protection Act, 1986 which provides for a three-tier machinery at the district, state and national levels for redressal of consumer grievances.

(any four can be written)

18. State any four directions which can be issued by the consumer court to the opposite party.

Ans. If the consumer court is satisfied about the genuineness of the complaint, it can issue one or more of the following directions to the opposite party.

(i). To remove the defect in goods or deficiency in service.

(ii). To replace the defective product with a new one, free from any defect.

(iii). To refund the price paid for the product, or the charges paid for the service.

(iv). To pay a reasonable amount of compensation for any loss or injury suffered by the consumer due to the negligence of the opposite party.

Also

(v). To pay punitive damages in inappropriate circumstances.

(vi). To discontinue the unfair/restrictive trade practice and not to repeat it in the future.(vii). Not to offer hazardous goods for sale.

(viii). To withdraw the hazardous goods from sale.

(ix). To cease manufacture of hazardous goods and to desist from offering hazardous services.

(x). To pay any amount (not less than 5% of the value of the defective goods or deficient services provided), to be credited to the Consumer Welfare Fund or any other organisation/person, to be utilised in the prescribed manner.

(xi). To issue corrective advertisements to neutralise the effect of a misleading advertisement.

(xii). To pay adequate costs to the appropriate party.

(any four can be written)

19. State any four functions of Consumer Organizations and NGOs for the protection and promotion of consumer interests.

Ans.  Consumer Organizations and NGOs perform the following functions for the protection and promotion of consumer interests:

(i). Educating the general public about consumer rights by organising training programmes, seminars and workshops.

(ii). Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available and other matters of interest.

(iii). 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.

(iv). Encouraging consumers to strongly protest and take an action against unscrupulous, exploitative and unfair trade practices of sellers.

Also

(v). Providing legal assistance to consumers by way of providing aid, legal advice etc. in seeking legal remedy.

(vi). Filing complaints in appropriate consumer courts on behalf of the consumers.

(vii). Taking an initiative in filing cases in consumer courts in the interest of the general public, not for any individual.