Context:

• The Central Consumer Protection Authority (CCPA) recently probed 20 IAS coaching centres for making misleading claims in their advertisements and for unfair trade practices. 

Misleading advertisement

• CCPA observed that institutes use pictures and names of top rank holders and successful candidates to influence potential aspirants, without disclosing the nature of their enrolments.  
  • Four of the twenty institutions have already been slapped with a penalty of Rs 1 lakh.
• Violation of norms: As per Advertising Standards Council of India (ASCI), education has emerged as “one of the most violative sectors in advertising” in recent years. 

Observations of CCPA:

• Serving self interests: CCPA observed that most rank holders showcased in the advertisements only took mock interviews from these institutes. 
  • IAS coaching centres provided mock interviews free of cost, which served their own interests. 
• Concealment of information: This information is not disclosed in the advertisements, which ideally must include the course they enrolled for.
  • Thus, it qualifies as deliberate concealment of important information and categorisation as a ‘misleading advertisement’ under Section 2(28) of the Consumer Protection Act, 2019.  
• Penalties for violation: First time violations may invite penalties up to Rs 10 lakh. 
  • Subsequent violations may attract penalties up to Rs 50 lakh, with other potential legal action should the non-compliance continue. 

Essential provisions of Consumer Protection Act, 2019:

• Consumer Protection Councils: They protect the rights of the consumers at both the national and state levels.
• Central Consumer Protection Authority: The Central Government shall establish it to regulate matters relating to violation of the rights of consumers, unfair trade practices and false or misleading advertisements.
  • The Central Government will appoint the Chief Commissioner and the other Commissioners of the Central Authority as required under the Act.
• Consumer disputes redressal commission (CDRC): The state government shall establish a CDRC known as the District Commission in each district of the state under the CCPA, 2019.

Consumer rights under Consumer Protection Act, 2019:

• The right of a consumer to be protected from the marketing of goods and services that are hazardous and detrimental to life and property.
• The right of a consumer to be protected against unfair trade practices by being aware of the quality, quantity, potency, purity, standard and price of goods, products or services.
• The right of a consumer to access various goods, services and products at competitive prices.
• The right to seek redressal at respective forums against unfair and restrictive trade practices.
• The right to receive adequate compensation or consideration from respective consumer forums in case the seller has wronged them.
• The right to receive consumer education.

Unfair trade practices under the Consumer Protection Act, 2019:

• Section 2(47) of the Act defines the term ‘unfair trade practices’ which include:
  • Manufacturing spurious goods or providing defective services.
  • Not issuing cash memos or bills for the goods purchased or services rendered.
  • Refusing to take back or withdraw the goods or services and not refunding the consideration taken for the purchase of the goods or services.
  • Disclosing the personal information of the consumer.

Offences and penalties listed under the Act:

• Punishment for false and misleading advertisements: Any manufacturer or service provider who promotes false or misleading advertisements will be punished with imprisonment for a term that may extend to two years and with fine that may extend to ten lakh rupees.
• Punishment for manufacturing, selling, distributing products containing adulterants: Any person who sells, manufactures, distributes products containing adulterants shall be penalised.

News Source: The Hindu