Business Ethics

Ethics of Consumer Protection

Introduction

Consumers are often given a raw deal by way of substandard products, increased prices by market manipulation, failed warranties, poor after sales services, etc. Good business ethics should consider the customer as a stakeholder and give him his due

Who is a Consumer

Any person who

Buys goods for a consideration which has been fully or partially paid for, with a purpose that does not include resale or any commercial purpose except selfemployment Hires or avails of any services for a consideration which has been fully or partially paid for, with a purpose that does not include free service or services under a personal contract

Consumer protection refers to steps that are necessary to protect the consumer from business malpractices

Parties to Consumer Protection

Three interested parties consumers, businesspersons and government

Role of Consumers

Should take care of their own interests Should know their rights and exercise them Should not depend on business persons Have a right to be educated and to be heard

Role of Business Persons

Should pay attention to consumer rights Must supply quality goods and services at reasonable prices Business associations should entertain consumer complaints against members

Role of Government

Should formulate laws and enforce Should include consumer groups in policy making

UN Guidelines for Governments

Ensure efficient distribution especially in rural areas Encourage consumer cooperatives Ensure effective grievance redressal

History of Consumer Protection

In the 1920s there was a crack down on exaggerated advertising claims In 1960s Ralph Nader led the consumer movement in the US Consumers are helpless because they lack information and awareness Information such as expiry dates, nutritional facts, etc. address this problem

Consumer Legislations

Competition Act Essential Commodities Act Prevention of Food Adulteration Act Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Ac Sale of Goods Act Patent and Designs Act Drugs and Cosmetics Act, etc.

Consumer Protection Act (COPRA)

Provides right to seek legal redress or recover costs and damages for injury or loss resulting from faulty or defective goods and services bought for valuable consideration

6 Consumer Rights under COPRA

Right to safety Right to be informed about quality, quantity, potency, purity, standard and price Right to choose and have access to a variety of products at competitive prices Right to be heard and to be assured that grievances will receive due consideration Right to seek redressal from unfair trade practices Right to consumer education

Authorities under COPRA

District Forums established by State Governments State Commission established by State Governments National Commission established by Central Government Appeals go from district to state to national commission

The End