Govt discusses new authority to strengthen consumer rights

To stop fly-by-night entities from fleecing millions, as with ponzi schemes, the central government will propose amending the Consumer Protection Act to enable inquiry without first requiring a complaint, and also pave the way for class action suits.

The latter is when action is taken on behalf of a group of citizens, as against individual litigation.

Officials said the proposed amendments were discussed on Wednesday at a meeting attended by Finance Minister Arun Jaitley and Consumer Affairs Minister Ram Vilas Paswan.

“There have been instances where a company had raised funds from the public after giving misleading advertisements and vanished overnight, leaving thousands of consumers in the lurch. If any authority has suo motu (acting on one's own accord) power, it can take action against such a company before it tries to flee,” said Bejon Mishra, a consumer policy expert.

The proposed Bill would seek to create a Central Consumer Protection Authority, to be headed by a commissioner with the rank of secretary in the Government of India, with five deputies, each with a particular expertise. It would be based in Delhi and have the powers mentioned earlier.

“The idea is to give full protection to consumers,” a senior official said. He said the proposed amendments to the Act   would also bring e-commerce and online transactions within its ambit, beside teleshopping and direct selling.

There is also a proposed change to facilitate mediation and arbitration between parties, to bring down the load of cases in consumer courts.