Question

Answer the question.
Explain the need for consumer protection.

Answer 1

Introduction: -Even though, in the modern competitive market consumer is regarded as the king but in reality he gets exploited by manufacturers and sellers. They are in superior position than consumers. So, consumers need to be protected. Consumer protection means safeguard the interest of the consumers and allowing him to exercise his rights. Protection of the interest of consumers with the help of various laws is a recent development. But history shows that even in ancient time's kings and emperors have taken note of protection of consumer rights.

The following extract from the book "Consumer Protection Administration, organization and Working" by Cheena Gambhir talks about Consumer Protection in ancient times.

"Arthashastra of Kautilya details the precepts and practices of the Mauryan State where it was the duty of the superintendents to put government products in the market under favorable conditions and to supervise their sales at reasonable rates. Merchants who cheated or interfered generally with the normal functioning of the market (prices) were open to heavy punishment."

Consumer protection is necessary due to the following reasons:

1. Seller dominant market: - If the market is dominated by sellers than the consumer's choice as well as his welfare gets the last preference. All the transactions are finalized in favour of sellers, middlemen and manufacturers. E.g. if there is shortage of goods then the buyer will have to buy a product at the price quoted by the seller.
2. Ignorance of consumers: - Ignorance of consumers about their rights, market conditions, price levels, product details, etc. result into consumer exploitation. Many times consumers do not even realize that they are being cheated. E.g. a shopkeeper may sell a product which is actually received by him as free sample; free gifts offered by company may not reach upto the consumer.
3. Tendency of the Consumers: - Majority of the consumers get attracted towards the products of cheap prices, discounts, various schemes, etc. this weakness of the consumers leads to their exploitation without their knowledge.
4. Unorganized Consumers: - Consumersare neither organized nor united. Compared to them the producers and sellers are in a superior position. An individual consumer cannot fight against powerful traders. Thus, it is easy to exploit unorganized and widely spread consumers.
5. Nature of Products: - Modern products are the end results of complicated production processes. It is beyond the capacity of poor and illiterate consumers to judge the quality or safety aspects of a product. Moreover, these consumers/customers cannot take legal help even though they realize that they are being cheated because they do not understand production process thoroughly.
6. Seller dominant market: - If the market is dominated by sellers than the consumer's choice as well as his welfare gets the last preference. All the transactions are finalized in favour of sellers, middlemen and manufacturers. E.g. if there is shortage of goods then the buyer will have to buy a product at the price quoted by the seller.
7. Ignorance of consumers: - Ignorance of consumers about their rights, market conditions, price levels, product details, etc. result into consumer exploitation. Many times consumers do not even realize that they are being cheated. E.g. a shopkeeper may sell a product which is actually received by him as free sample; fee gifts offered by company may not reach upto the consumer.
8. Tendency of the Consumers: - Majority of the consumers get attracted towards the products of cheap prices, discounts, various schemes, etc. this weakness of the consumers leads to their exploitation without their knowledge.
9. Unorganized Consumers: - Consumers are neither organized nor united. Compared to them the producers and sellers are in a superior position. An individual consumer cannot fight against powerful traders. Thus, it is easy to exploit unorganized and widely spread consumers.
10. Nature of Products: - Modern products are the end results of complicated production processes. It is beyond the capacity of poor and illiterate consumers to judge the quality or safety aspects of a product. Moreover, these consumers/customers cannot take legal help even though they realize that they are being cheated because they do not understand production process thoroughly.