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Unit 13: Consumer Protection Act

The blue sweater, you bought has given you a rash. When you look at the label, you notice that Notes
it’s not 100% cotton as advertised. Instead, it is made from a mix of unpronounceable materials.
Can you dispute the seller’s claims?
These are some of the scenarios that customers go through daily. Consumer protection laws are
meant to protect us against these types of issues. That is why it’s important to familiarize
ourselves with the more common consumer protection laws.
A consumer is a user of goods and services; therefore, every producer is also a consumer.
However, conflicting interests have categorised them, inevitably, into two different groups.
The industrial revolution brought in the concept of standardisation and mass production and
over the years, the type of goods and the nature of services available grew manifold. The
doctrine of Caveat Emptor or let the buyer beware which came into existence in the middle ages
had been replaced by the principle of Consumer Sovereignty or Consumer is the King. But, with
tremendous increase in the world population, the growing markets were unable to meet the
rising demand which created a gap between the general demand and supply levels in the
markets.
This to some extent watered down the concept of Consumer Sovereignty, what with consumers
being forced to accept whatever was offered to them. On the other hand, the expanding markets
necessitated the introduction of various intermediaries between the producer and the ultimate
consumer. Advertising, though ostensibly directed at informing potential consumers about the
availability and uses of a product began to be resorted to as a medium for exaggerating the uses
of ones products or disparaging others products so as to have an edge over competitors.
Unfair and deceptive practices such as selling of defective or sub-standard goods, charging
exorbitant prices, misrepresenting the efficacy or usefulness of goods, negligence as to safety
standards, etc. became rampant. It, therefore, became necessary to evolve statutory measures,
even in developed countries, to make producers/traders more accountable to consumers. It also
became inevitable for consumers to unite on a common platform to deal with issues of common
concern and having their grievances redressed satisfactorily.

13.1 Genesis of Consumer Protection Laws

Consumer protection, as known today, has roots even in the daily lives of the Stone Age cave
men. A seller sells a product to a buyer, the buyer finds the product not to be up to his satisfaction;
coincidence, some would say. But is it? In the absence of definitive statistics, the instinct of a
consumer living in a capitalist society would lead me to wonder if the seller intentionally did or
did not do something that led to my compromised consumer satisfaction.
Today’s consumerism finds its origin in the late 19th and early 20th century marketplace in the
United States. The United States Congress made history in 1872 by enacting the very first of its
kind consumer protection law, the mail fraud law, which makes it a punishable offence to
commit mail order fraud. At best rudimentary and lacking teeth to curb anything but false
advertising, this law did nothing to prevent unsafe, unhealthy and dangerous products from
reaching the hands of trusting consumers.
The passage of the Sherman Anti Trust Act passed by the US Congress in 1890 was the next
feather in the cap of consumerism. This act prevents and limits the formation of cartels and
monopolies that challenge the very frame of consumer rights. The ground for the majority of
antitrust law suits, this federal law does not address the most critical area of consumer protection,
the product quality.
Apart from minor legislations at a state level, it was the beginning of the 20th century that
marked the revival of the consumer protection movement, which had been docile for the past 15

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