Consumers say introduction of class action suit as part of the Consumer Protection Act 2019 will make grievance redressal easier.  

Consumer Protection represented by a gavelImage for representation
Money Consumer Rights Thursday, July 23, 2020 - 13:36

The introduction of class action suit as part of the Consumer Protection Act 2019 has been welcomed with most consumers saying it will make redressal for misleading advertisements, defective products and deficient services easier. Consumers believe that a class action suit mechanism (where a large number of consumers facing the same issue with a defective product come together) will be instrumental in getting companies to accept returns of defective products. These insights were revealed in a survey conducted by LocalCircles, a community and social media platform. 

96% of the consumers surveyed also believe that a functional class action suit mechanism should be made applicable in case of a service contract. For example, if a major service deficiency was found with a mobile or DTH services provider to a large number of consumers and the services were billed at the full rate, the consumers collectively can now file a class action suit and demand compensation.  

93% consumers said that a functional class action suit mechanism should also be made applicable in case of a brand engaging in unfair trade practices or misleading advertisements.

The survey also tried to understand the extent of the issues faced by consumers and areas where the class action reform should focus first. 

49% consumers said that they have had one or more inherently defective products in the last 3 years while 38% said they had never faced such an issue.

To the question of how in the last 3 years, when they identified a defective product, did they get the issue resolved, 41% said they raised the issue with the brand, and they fixed it. 21% said they raised the issue with the brand, and they refused to fix it. 5% said they raised it with the brand, they refused but the consumer won in consumer court.

LocalCicles also asked consumers what they did about a misleading advertisement or an unfair trade practice by a brand/service provider in the last 3 years. 14% said they raised the issue with the brand/service provider and they addressed it, 10% said they raised the issue with the brand/service provider and they refused to address it. 14% said the brand/service provider refused to address, so they created awareness about it in social media.

On July 20, the Ministry of Consumer Affairs notified the Consumer Protection Act 2019 bringing in a long pending consumer reform. The Act includes the establishment of the Central Consumer Protection Authority (CCPA), which is empowered to conduct investigations into violation of consumer rights, order recall of unsafe goods and services as well as take suo motu complaints against brands where a class of consumers is impacted due to a defective product or deficient service.

Initiating a class action suit comes as an additional mode of relief for the consumers, as it can be used along with individual complaints to address grievances, thereby empowering the consumers and giving them an option to carry out two parallel proceedings. 

The survey received more than 48,000 responses from consumers located in 270 districts of India. 64% respondents were men while 36% respondents were women.

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