My Personal Finance Blog

Introduction

Consumers play a vital role in the economic system of a nation because in the absence of effective demand that emanates from them, the economy virtually collapses. Mahatma Gandhi said, “A consumer is the most important visitor on our premises. He is not dependent on us, we are on him. He is not an interruption to our work, he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving us opportunity to serve him. But, of late, unfortunately cheating by way of overcharging, black marketing, misleading advertisements, etc has become the common practice of greedy sellers and manufacturers to make unreasonable profits. In this context, it is the duty of the government to confer some rights on consumers to safeguard their interests.

CONSUMER RIGHTS

1. Right to Safety: The right to be protected against goods which are hazardous to life and property.

2. Right to Information: The right to be informed about the quality, quantity, purity, price and standards of goods.

3. Right to Choose: The right to be assured access to a variety of products at competitive prices, without any pressure to impose a sale, i.e., freedom of choice.

4. Right to be Heard: The right to be heard and assured that consumer interests will receive due consideration at appropriate forums.

5. Right to Seek Redressal: The right to get relief against unfair trade practice or exploitation.

6. Right to Education: The right to be educated about rights of a consumer.

Protection of Consumer Rights

Consumer protection means safeguarding the rights and interests of consumers. It includes all the measures aimed at protecting the rights and interests of consumers.
Consumers need protection due to the following reasons:

1. Illiteracy and Ignorance: Consumers in India are mostly illiterate and ignorant. They do not understand their rights. A system is required to protect them from unscrupulous businessmen.

2. Unorganised Consumers: In India consumers are widely dispersed and are not united. They are at the mercy of businessmen. On the other hand, producers and traders are organized and powerful.

3. Spurious Goods: There is increasing supply of duplicate products. It is very difficult for an ordinary consumer to distinguish between a genuine product and its imitation. It is necessary to protect consumers from such exploitation by ensuring compliance with prescribed norms of quality and safety.

4. Deceptive Advertising: Some businessmen give misleading information about quality, safety and utility of products. Consumers are misled by false advertisement and do not know the real quality of advertised goods. A mechanism is needed to prevent misleading advertisements.

5. Malpractices of Businessmen: Fraudulent, unethical and monopolistic trade practices on the part of businessmen lead to exploitation of consumers. Consumers often get defective, inferior and substandard goods and poor service. Certain measures are required to protect the consumers against such malpractices.

6. Freedom of Enterprise: Businessmen must ensure satisfaction of consumers. In the long run, survival and growth of business is not possible without the support and goodwill of consumers. If business does not protect consumers’ interests, Government intervention and regulatory measures will grow to curb unfair trade practices.

7. Legitimacy for Existence: Business exists to satisfy the needs and desires of consumers. Goods are produced with the purpose of selling them. Goods will, in the long run, sell only when they meet the needs of consumers.

8. Trusteeship: Businessmen are trustees of the society’s wealth. Therefore, they should use this wealth for the benefit of people.

Methods of Consumer Protection

There are four main methods of protecting the interests of consumers:

1. Business Self-regulation: The business community itself can help in achieving consumer protection and satisfaction through self -discipline. Businessmen can regulate their own behaviour and actions by adopting higher ethical standards. Trade associations and chambers of commerce can check unfair trade practices used by some businessmen.

2. Consumer Self-help: Every consumer must be alert as self-help is the best help. He should educate himself and know his rights. He should not allow unscrupulous businessmen to cheat him.

3. Consumers’ Associations: Consumers should form voluntary associations. These associations can educate and awaken consumers. They can take organized action and put pressure on businessmen to adopt fair trade practices.

4. Government Regulations: The State can ensure consumer protection through legislative, executive and judicial actions. The laws enacted by the Government must be strictly enforced by the executive. Government of India has enacted several laws to protect the interests and rights of consumers. Some of these laws are as follows:

o The Essential Commodities Act, 1955 which aims to regulate and control the production, supply and distribution and prices of essential commodities.

o The Prevention of Food Adulteration Act, 1954 which aims to check adulteration in food items and eatables.

o The Drugs and Cosmetics Act, 1940 which seeks to ensure purity and quality in drugs and cosmetics.

o The Standards of Weights and Measures Act, 1956 which aims at ensuring that consumers get the right weight and measurement in products.

o The Household Electrical Appliances (Quality Control) Order, 1976 which seeks to ensure safety and quality in the manufacture of electrical appliances.

o The Consumer Protection Act, 1986 which seeks to provide speedy and inexpensive redressal to the grievances of consumers.

THE CONSUMER PROTECTION ACT, 1986

The Act provides following remedies to an aggrieved consumer:

o Removal of defects in goods or deficiency in service.

o Replacement of defective goods with new goods of similar description which shall be free from any defect.

o Return of price paid by the consumer.

o Payment of compensation for any loss or injury suffered by the consumer.

o Discontinue the restrictive, or unfair trade practice, and not to repeat it.

o Withdraw the hazardous goods from being offered for sale and not to offer them for sale.

o Provide for adequate cost to the aggrieved party.

The Consumer Production Act provides for a threetier system of redressal agencies: one at district level known as District Forum, second at state level known as ‘State Commission’, and third at national level known as ‘National Commission’. A complaint is to be made to the district forum of the concerned district where the value of goods and services and compensation, if any, is up to Rs 20 lakhs, to the ‘State Commission’ between Rs 20 lakhs and Rs 100 lakhs, and to the National Commission for more than Rs 100 lakhs. Interestingly, there is provision for appeals against the orders of a particular redessal forum by the aggrieved party before the next higher echelon and even from the findings of the National Commission before the Supreme Court.

Conclusion

Invariably, consumers are a vulnerable lot for exploitation, more so in a developing country with the prevalence of mass poverty and illiteracy. India too is no exception to it. Instances like overcharging, black marketing, adulteration, profiteering, lack of proper services in trains, telecommunication, water supply, airlines, etc are not uncommon here. From time to time, the government has attempted to safeguard consumer’s interests through legislations and the CPA 1986 is considered as the most progressive statute for consumer protection. Procedural simplicity and speedy and inexpensive redressal of consumer grievances as contained in the CPA are really unique and have few parallels in the world. Implementation of the Act reveals that interests of consumers are better protected than ever before. However, consumer awareness through consumer education and actions by the government, consumer activists, and associations are needed the most to make consumer protection movement a success in the country.

FTC certified debt settlement businesses are the only truly impartial voice for the consumer whenever working with mind-boggling amounts of consumer debt and we are happy that the Federal trade commission identified that debt settlement just isn’t the right alternative however a necessary support when shipped by a legitimate services provider.

Today, Us citizens owe around $2.5 trillion in consumer debt- not necessarily including mortgages. The typical American with a credit record retains more than $10,000 in credit card debt. Debt settlement is a much needed and effective form of debt relief which allows suppliers to discuss straight with lenders on the holder’s part to resolve the holder’s unsecured debt balances. Sadly, it has been difficult for customers to pick reputable providers and some businesses took advantage of these individuals that placed many men and women in a worse position than they were previous to coming into the course.

The Federal trade commission mentioned that the brand new restrictions is a crackdown on the debt-settlement sector, that flourished in the course of the monetary downturn as debtors fought to pay out expenses. Debt-settlement businesses can now simply be in a position to demand a payment as soon as a customer’s debt has been reduced, settled or renegotiated. Since the beginning of the economic downturn, the Better Business Bureau has received more than 3,500 problems regarding said companies. Consumers complained that they appeared much deeper in debt or were charged by collectors after faltering to make payments. The bureau didn’t individually observe issues against the industry ahead of the economic downturn.

The Association of Settlement Companies (“TASC”) announced today that its Board of Directors has elected to help support the current debt relief services rule making by the Federal Trade Commission (“FTC”). As well as mandating better disclosure requirements modeled on existing and suggested TASC standards, the FTC rule making forbids these types of businesses from accepting fees from a buyer for debt settlement solutions just before the real negotiation of the customer’s debt. Debt-settlement companies frequently impose an upfront charge, usually a portion of the customer’s outstanding balance. In exchange, the company claims to negotiate with lenders to reduce or eliminate the debt, at times by just as much as half.

FTC compliant debt settlement is thought to be as the most suitable and the best method by the folks which are within large debts. This legislation will keep a strict look on the pay out companies that were well known in extracting big amount of money from the customers without in fact removing the debt. This sort of companies getting large upfront fees can now be under regulation and also if these people do not stick to the principles, they can be trashed of the corporation saying the non-compliance to the obligations laid down by the new legislation. Said organizations which walk outside the principles can be at the mercy of a $16,000 fine per violation. The Federal Trade Commission’s protocols only pertain to for-profit organizations. The agency informed that it will go after companies that pose as non-profits.

Consumer is king. Gone are the days when businesses used to ripe off customers by providing cheap quality products and services against a good deal of money. If you are a victim of such act you can take legal action against the company. Many consumers each year suffer financial and emotional stress due to the deceptive actions of business. You can also hold a company responsible if their product or service has injured you in any way. There is nothing to feel helpless about because the consumer law is there to protect you. If you have been cheated and you think that you can not fight back you are absolutely wrong.

For an individual it seems that he or she is definitely going to loose the battle against a corporate body. Wining a legal case against such a powerful opponent may seem a wired idea. But it is possible because of consumer protection law. An experienced consumer protection lawyer can help you to fight for your right. If you have experienced any kind of loss or damage from a product because of the negligence of the manufacturer, distributor or retailer your lawyer will help you to get compensation for your loss. The lawyer has the knowledge and experience needed to handle your case. He will also know how the law applies to your case.

Consumers are more at risk these days with the ever increasing trading opportunities by various media including Internet. It is easier for consumers to fall victim of fraudulent trading, false advertising, credit card scams and many more. If you feel hopeless about the entire situation it is probably because you are not aware of your rights. Consumer protection law safeguards the rights of the consumers and ensures that they get the compensation for fraud or negligence. Some of the areas that consumer protection law covers include:
Purchase protection problem Identity theft Travel and hotel scams Faulty goods Pyramid schemes Contractor & subcontractor disputes Credit and banking difficulties Fraud or negligence on the part of the product or service provider can cause frustration for the consumers as they need to invest a lot of time and energy to hold the responsible party accountable. Filing your claim can be expensive initially. But this little expense will ensure that you get the compensation for your loss.

The fees of the lawyer may also sound high. In such case you can contact lawyers who promise to charge only if they win the case. You will have to offer a certain percentage of the compensation to the consumer protection lawyer if you win the case. Moreover handling the huge paper works and the intricate legal issues is not your cup of tea. So hiring an experienced lawyer will be a wise decision in every respect.

Very few people have been left untouched by the financial upheavals of recent years. In the good times we tend to spend and not think about it too much. The social pressures to look as though you are “succeeding” are such that when the crunch comes, we find what were manageable debts have now become unmanageable.

People find themselves in a financial situation they never thought that they would be in – one that happens to other people, but never to them. That situation is called bankruptcy.

Bankruptcy no longer carries the social stigma it once did. It is often considered the mark of someone who had the guts to try and go it alone, but failed, through little of their own, (after all, it’s the banks we now all love to blame!)

However, this doesn’t make the actual process any less stressful, and in 2005 the government brought in the Bankruptcy Abuse Prevention and Consumer Protection Act, which made it even more stressful to claim bankruptcy.

One of the main purposes of the Act was to make sure individuals weren’t using the bankruptcy laws simply to avoid debt. By hiding their true earnings and assets, it had been possible for people to claim chapter 7 bankruptcy, where all assets are liquidated but the debtor emerges free of debt, to rid themselves of unwanted debt, and at the same time retain a comfortable standard of living afterward, and with a head start in improving their credit rating after discharge.

Now, anyone wanting to file for bankruptcy has to attend government approved credit counselling.

Anyone attending counselling must bring with them details of their income and assets, and their financial outgoings. They must also supply details of their creditors and amounts owed. This way the court can decide if the more popular chapter 7 bankruptcy is an option, or if in fact the debtor, albeit with a rearrangement of their debts under a chapter 13 bankruptcy, can afford to repay their debts over a period of time, usually 3-5 years. In this way the debtor does not escape the bulk of debt, and creditors get their money.

It will also determine if there are perhaps other ways the debtor could avoid bankruptcy altogether.

One way is by using debt settlement companies, who charge a fee to the debtor, but take over the debt, usually at a reduced amount which they negotiate on your behalf.

The advantage with these companies is that your credit record is nowhere near as badly affected as it is should you become a bankrupt.

However, care must be taken when using one of these companies as many have turned out to be scams, taking the debtor’s cash, but not dealing with the debt itself, leaving the debtor worse off.

As with all things in life, it is research that pays dividends.

Before you sign up for a business credit card, you need to understand the risks of getting one, because they may not offer the same protection to consumers as personal credit accounts, and you may find that your getting more than you bargained for. It’s a smart idea to consider carefully whether your business truly needs a corporate credit account, and if it does, whether or not the risks of going without consumer protection outweigh the benefits of having a business credit card available to you.

What exactly is consumer protection? Consumer protection refers to the protection that customers get by law. In 2009, legislation was passed that was known as the Credit Card Accountability, Responsibility and Disclosure Act, or CARD. This law is in place to protect customers from rate increases on existing payments or to protect them from rate hikes when they miss a single payment. Also, consumer protection provides guidelines that keep consumers from having their payments applied to the balance with the lowest rate, before the higher ones, in order for the card companies to make more money.

However, business credit accounts do not fall under the protection of the CARD Act, which makes them risky for business customers, especially with the thousands or tens of thousands that many small businesses spend each month with their commercial accounts. Business lines of credit should only be used by businesses that need them, and by those that understand how they work completely. They should never be used by regular consumers, with or without a side business, but some companies attempt to market these cards to regular consumers in order to avoid the CARD Act.

In fact, New York Senator Charles Shumer recently was at odds with marketing departments of some issuers for this very act, saying that the cards were being marketed to those that didn’t even own a business or were retired. This allows companies to avoid following the new legislation and charge consumers more money. Schumer is working with the Federal Reserve Board to make sure that credit card companies list clearly on business applications that the cards are not meant for personal use. Business credit card offers through the mail are up more than 250% from the previous year’s quarter however.

Current consumer protection on personal accounts include CARD and other legislation aimed at protecting consumers from unfair practices by unscrupulous companies. This type of protection dates all the way back to as early as 1968, with the Consumer Credit Protection Act. However, many business credit cards are exempt from these regulations and you must examine your card’s contract carefully to determine what protection, if any, if offered by your commercial credit card and make sure that you are very responsible when using your business credit card. Never put personal credit on your business credit line so that you have a clear record for tax time.