Chapter-2

To clarity the concept of consumer and consumer

protection

2:1. Introduction:
Consumer is a person who is not directly involved in a trade, but receives goods
and services from a person who is occupied in the business. To keep the
business profitable and legal, some policies have been established by the
government to create a balance between profit and quality. Such policies are
largely about goods and services, supplied to the consumers or customers, who
wish to purchase or hire goods and/or services from the sellers or
manufacturers. I have discussed in this chapter about the concept of consumers
and consumer protection.

2:2. Definition of consumer:

A consumer or Buyer is defined as one, who buys, uses, maintains and
disposes of products and/or services and although, many may still be familiar
with the doctrine of Let the Buyer Beware this is no longer the case with the
advent of Consumer Protection law.

In the opinion of Professor Ulf Bernitz, leading Scandinavian expert on

consumer law, the most sophisticated of the term Consumer at present to be
found in the Consumer Sales Act of 1973. 1 This Act renewed in 1991, is
applicable Where a consumer buys from merchant goods in the course of the
merchants professional activities. This definition is also applicable to
consumer services where they are intended mainly for private purposes rather
than private use.

In the UK, the Consumer Protection from Unfair Trading Regulation 2008
states that commercial practice means any act, omission, course of conduct,
representation or commercial communication (including advertising and
1
Supra note 18 at p. 12

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marketing) by a trader, which is directly connected with the promotion, sale or
supply of a product to or from consumers, whether occurring before, during or
after a commercial transaction (if any) in relation to a product.

Consumer means any individual who in relation to a commercial practice is

acting for purposes which are outside his business.

Section-2 (19) of the Consumer Protection Act, 2009 in Bangladesh states the
definition of consumer.

Consumer means such type of person:

a) Who except for the purpose of resale and commercial intention.

i) Purchases or agrees to purchase any product by payment of a price.
ii) Purchases or agrees to purchases by part payment of price.
iii) Purchases with the promise of paying price in extended term or by
installments.
b) Who uses the product purchased under clause (a) with the consent of the
purchaser.
c) Who, after purchasing a product, uses it commercially for the purpose of
making a living self employed.
d) Who,
i) Hires or receives otherwise any service by payment or promises to pay
the price.
ii) Hires or receives otherwise any service by part payment or promises
to pay partly the price.
iii) Hires or receives otherwise any service by paying the price in an
extended term or by installments.
e) Who consumers the service received under clause (d) with the consent of
the service consumer.

Although it may be difficult for a seller to decide whether a purchaser is a

consumer or not it depends on the purchasers intention in buying the goods for
him. It is said that consumer protection is the achieved or intended result of
consumer policy.

2:3 Consumer protection and consumer law:

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It is now admitted that the law as it stands does not give sufficient protection to
the consumer. As a matter of fact, the term consumer is by origin an economic
concept and until quite recently, it was simply foreign to legal usage and
conceptualization. However, with the growing realization of the need for special
legislation for the protection of consumers and only consumers, it become
important to give the term consumer a fixed legal meaning.

Consumer protection consists of laws and organizations designed to ensure the

rights of consumers as well as fair trade competition and the free flow of
truthful information in the marketplace. The laws are designed to prevent
businesses that engage in fraud or specified unfair practices from gaining an
advantage over competitors and may provide additional protection for the weak
and those unable to take care of themselves. Consumer protection laws are a
form of government regulation which aims to protect the rights of consumers.
For example, a government may require businesses to disclose detailed
information about productsparticularly in areas where safety or public health
is an issue, such as food. Consumer protection is linked to the idea of "consumer
rights" (that consumers have various rights as consumers), and to the formation
of consumer organizations, which help consumers make better choices in the
marketplace and get help with consumer.
Other organizations that promote consumer protection include government
organizations and self-regulating business organizations such as consumer
protection agencies and organizations, the Federal Trade
Commission, ombudsmen, Better Business Bureaus, etc.
A consumer is defined as someone who acquires goods or services for direct use
or ownership rather than for resale or use in production and manufacturing.
Consumer interests can also be protected by promoting competition in the
markets which directly and indirectly serve consumers, consistent with
economic efficiency, but this topic is treated in competition law.

What is Consumer Rights Law?

This legal area encompasses a large body of laws enacted by the government to
protect consumers by regulating many of the following business transactions
and practices: advertising, sales and business practices; product branding; mail
fraud; sound banking and truth in lending; quality produce and meats; housing
material and other product standards; and all manner of other types of consumer
transactions. Some states also regulate door-to-door sales, abusive collection
practices and referral and promotional sales.

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Consumer protection law or consumer law is considered an area of law that
regulates private law relationships between individual consumers and the
businesses that sell those goods and services. Consumer protection covers a
wide range of topics, including but not necessarily limited to product liability,
privacy rights, unfair business practices, fraud, misrepresentation, and other
consumer/business interactions.

Consumer protection laws deal with a wide range of issues including credit
repair, debt repair, product safety, service and sales contracts, bill collector
regulation, pricing, utility turnoffs, consolidation, personal loans that may lead
to bankruptcy.

2:4. Aspects of consumer protection:

There are three aspects of consumer rights protection, which every country must
consider.

First, the aspect of voluntary protection which means that consumers

hemselves would voluntarily set up associations and/or organizations to
safeguard their own rights and interests. These associations/organizations
generally work as pressure groups on the government for consumer rights
issues. There are many such voluntary organizations in India, Pakistan, Sri
Lanka and other countries of the world. In Bangladesh, the Consumers
Association of Bangladesh (CAB) was established in 1978.

Second, the aspect of institutional protection. By establishing national

institutions to safeguard and promote consumer rights of citizens this aspect of
consumers protection can be ensured. For example, in 1914 the Federal Trade
Commission, in 1927 the Food and Drug Administration and in 1970 the
National High Traffic Administration were set up in the USA; the United
Kingdom established the office of Director-General of Fair Trading; Sweden set
up the Consumer Agency KOV and Consumer Ombudsman KO; India
established National Consumer Protection Council, various State Consumer
Protection Councils, National Consumer Disputes Redressal Commission with
State Commissions and District Forums; Pakistan set up the Islamabad
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Consumer Protection Council; Sri Lanka and Nepal set up the office of the
Commissioner of Internal Trade and the Consumer Protection Council
respectively.

Third, the aspect of statutory protection, which can be guaranteed by enacting

relevant laws for protecting the rights and interests of the consumers. Many
countries of the world, including those in Asia, have already enacted
comprehensive laws in this regard. For example, the Consumer Protection
Fundamental Act 1968 in Japan, Consumer Protection Act 1979 in both
Thailand and Sri Lanka, Consumer Protection Act 1986 in India, Consumer Act
of the Philippines 1990 in the Phillippines, Islamabad Consumers Protection
Act 1995 in Pakistan, Consumer Protection Act 1998 in Nepal, The Law on
Consumer Protection 1999 in Indonesia and Consumer Protection Act 1999 in
Malaysia were enacted. However, Bangladesh is yet to enact such a
comprehensive Consumers Protection Act.

Current status of legal protection to consumers in Bangladesh

It has already been mentioned that the current system of legal protection to the
consumers in Bangladesh is inadequate and outdated. Further whatever little
laws are available, they are not strictly enforced for the protection of the rights
of the general consumers. The consumers in Bangladesh are thus deprived of
their rights at every sphere of their lives.

The Constitution of Bangladesh, under its fundamental principles of state

policy part, recognises the rights of consumers to a limited extent. The
provisions of consumer protection can be found at Articles 15 and 18 of the
Constitution. However, these provisions are mainly focussed on the vital issues
of health and food than on other consumer rights. Moreover, the said
provisions are mentioned under the fundamental principles of state policy part
and not under the fundamental rights part of the Constitution. Hence, they
remain mostly non-enforceable in the courts of law.

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Further, there are certain legislations, part of which has got direct bearings on
consumer protection. For example, sections 264-267, 272-276, 478-483 of the
Bangladesh Penal Code 1860, the Poison Act 1919, the Dangerous Drug Act
1930, the Trade Mark Act 1940, the Animals Slaughter (Restriction) and Meat
Act 1957, the Special Powers Act 1974, the Standards of Weights and Measures
Ordinance 1982, the Bangladesh Standards and Testing Institute Ordinance
1985, the Narcotics (Control) Act 1990, and the Safe Blood Transfusion Act
2002, etc.

(a) The current laws are faulty and do not meet the present needs;

(b) Under the existing legal regime, the aggrieved consumers themselves cannot
go to the court to sue against the violators. It is only the designated government
officials empowered under these laws, who can initiate and sue against the
violators.

(c) The provisions of penalty or punishment under the current laws are so
negligible that nobody cares to abide by such laws; and

(d) Finally, the laws are not effectively enforced.

2:5. Consumer perceived value:

Perceived value is consumers estimate of the products overall capacity to
satisfy his or her needs. It is the consumers overall assessment of the utility of a
product based on perceptions of what is received and what is given or what
might be given.

Customer perceived value (CPV) is the difference between the prospective

customers evaluation of all the benefits and all the costs of an offering and the
perceived alternatives.

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Total customer value is the perceived monetary value of the bundle or
economic, functional, and psychological benefits customers expect from a given
market offering.
Total customer cost is the bundle of costs customers expect to incur in
evaluating, obtaining, using, and disposing of the given marketing offering.

Customer perceived value

An example will help here. Suppose the buyer for a large construction company
wants to buy a tractor from Caterpillar or Komatsu. The competing salespeople
carefully describe their respective offers. The buyer wants to use the tractor in
residential construction work. He would like the tractor to deliver certain levels
of reliability, durability, performance, and resolve value. He evaluates the
tractors and decides that Caterpillar has a higher product value based on
perceived reliability, durability, performance, and resale value. He also
perceives differences in the accompanying services delivery, training, and
maintenance and decides that Caterpillar provides better service and more
knowledgeable and responsive personnel. Finally, he places higher value on
Caterpillars corporate image. He adds up all the values from these four sources
product, services, personnel, and image and perceives Caterpillar as
delivering greater customer value.

2
www.kinki-truck.co.jp

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Does he buy the Caterpillar tractor? Not necessarily. He also examines his total
cost of transacting with Caterpillar versus Komalsu, which consists of more
than the money. As Adam Smith observed over two centuries ago, The real
price of anything is the toil and trouble of acquiring it. Total customer cost
includes the buyers time, energy, and psychic costs. The buyer evaluates these
elements together with the monetary cost to form a total customer cost. Then the
buyer considers whether Caterpillars total customer cost is too high in relation
to the total customer value Caterpillar delivers. If it is, the buyer might choose
the Komatsu tractor. The buyer will buy from whichever source he thinks
delivers the highest perceived customer value.
Now let us use this decision-making theory to help Caterpillar succeed in selling
to this buyer. Caterpillar can improve its offer in three ways. First, it can
increase total customer value by improving product, services, personnel, and /
or image benefits. Second, it can reduce the buyers no monetary costs by
reducing the time, energy, and psychic costs. Third, it can reduce its products
monetary cost to the buyer Suppose Caterpillar concludes that the buyer sees its
offer as worth $20,000. Further, suppose Caterpillars cost of producing the
tractor is $14,000. This means that Caterpillars offer potentially generates
$6,000 over the companys cost so Caterpillar needs to charge a price between
$14,000 and $20,000. If it charges less than $14,000, it wont cover its costs; if
it charges more than $20,000, it will price itself out of the market. The price
Caterpillar charges will determine how much value will be delivered to the
buyer and how much will flow to Caterpillar.
For example, if Caterpillar charges $19,000, it is creating $1,000 of customer
perceived value and keeping $5,000 for itself. The lower Caterpillar sets its
price, the higher the customer perceived value and, therefore, the higher the
customers incentive to purchase. To win the sale, Caterpillar must offer more
customer perceived value than Komatsu does.
Some marketers might argue that the process we have described is too rational.
Suppose the customer chose the Komatsu tractor. How can we explain this
choice? Here are three possibilities:

1. The buyer might be under orders to buy at the lowest price. The Caterpillar
salespersons task is to convince the buyers manager that buying on price alone
will result in lower longterm pofits.

2. The buyer will retire before the company realizes that the Komatsu tractor is
more expensive to operate. The buyer will look good in the short run; he is

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maximizing personal benefit. The Caterpillar salespersons task is to convince
other people in the customer company that Caterpillar delivers geater customer
value.

3. The buyer enjoys a long-term friendship with te Komatsu salesperson. In this

case, aterpillars salesperson needs to show the buyer that the Komatsu tractor
will draw complaints from the tractor operators when they discover its high fuel
cost and need for frequent repairs.
The point of these examples is clear: Buyers operate under various constraints
and occasionally make choices that give more weight to their personal benefit
than to the companys benefit. However, customer perceived value is a useful
framework that applies to many situations and yields rich insights. Here are its
implications:
First, the seller must assess the total customer value and total customer cost
associated with each competitors offer in order to know how his or her offer
rates in the buyers mind.
Second, the seller who is at a customer perceived value disadvantage has two
alternatives: to increase total customer value or to decrease total customer cost.
The former calls for strengthening or augmenting the offers product,
services, personnel, and image benefits. The latter calls for reducing the buyers
product, services, personnel, and image benefits. The latter calls for reducing
the buyers costs by reducing the price, simplifying the ordering and delivery
process, or absorbing some buyer risk by offering a warranty.3

2:6.Concept of consumer rights protection Law

According to a leading European author on the subject, consumer law comprises
the body of standards, rules and instruments representing the juridical fruit
borne by the various efforts that have been made to secure or improve the
protection of the consumer on the economic market and to promote the interests
of the consumerist to establish a balance of power between consumers and
their economic partners or, probably more realistically, to define the means
whereby the existing imbalance can be reduced.

3
www.kinki-truck.co.jp

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In a narrower sense, consumer law focuses mainly on citizens entering
transactions to obtain products and services from commercial enterprises.

It is now accepted in Sweden and other Scandinavian countries that the legal
consumer concept must be confined to private persons who are acquiring goods,
services or anything else of value mainly for their own use and not for resale or
use in business.

Importance of the protection of consumer rights

It is now universally acknowledges that the observance of basic human rights is

the cornerstone of peace and security for all nations. A consumer right is
considered as a basic human rights as part of right to life. Many European
countries have already inserted consumer rights in their constitution for
giving special preferences e.g. Spain.

The constitution of Bangladesh enshrines right to life as a fundamental right

that indirectly protects consumer rights. The constitution also states that it is the
fundamental responsibility of the State to ensure the basic necessities of life,
including food, clothing, shelter, education and medical care with special regard
to public health and morality.

In this digital era, the world is considered as a global village. So, concern for
consumer rights rarely begins or ends at any single nations boundaries, and
effective action to protect and promote consumer rights, whether at home or
abroad, can be furthered by the imaginative use of national, regional or
international techniques. In the European Countries a consumers right is
protected through common directives applicable equally for all the EU nations.
The World Trade Organizations (WTO) has a great role in regulating trade
affairs through different agreements among various nations. The United Nations
(UN) has adopted guidelines for the protection of consumer rights.

It is widely accepted by the scholars that trade and business relates to the
socio-economic and religious conditions of a particular community.
Bangladesh, a developing country with over population, is dependant upon the

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foreign countries for its essential commodities and imports huge quantities of
food, cosmetic and essential products every year especially from India, Japan,
China, the USA and the EU countries. It has very good relations with the
Middle East countries and earns huge foreign exchanges by exporting goods,
medicines and apparels.

The religious prohibition on consumption of some food and food items has a
great impact over consumer rights. It is the prime responsibility of the state to
ensure all those rights to its citizens.

So, the importance of the protection of consumer rights carries a great value
towards humanity. To ensure security and safety in life, the consumer rights
protection related Laws should be effectively enforced. The number of
immature and unnatural death will be reduced if the consumer rights are duly
ensured. Effective enforcement of consumer rights shall impact widely on
economic progress in national and international level. The consumer related
laws should be enforced equally for all the citizens irrespective of their
nationalism or race, sex, colour, language, religion etc.

Rights of a consumer

The declaration made by former US President John F. Kennedy in 1962

outlined only four basic consumer rights: (1) the right to safety; (2) the right to
be informed; (3) the right to choose; and (4) the right to be heard. Worldwide
consumer movement led by Consumers International (CI), a global federation of
over 250 consumer organizations, added four more rights: (5) the right to
satisfaction of basic needs; (6) the right to redress; (7) the right to education; (8)
the right to a healthy environment. Together these eight rights form the basis for
current consumers movement worldwide. Now-a-days, consumer rights
include more sectors like banking, telecommunication etc. In Bangladesh a lot
of laws (around 61 laws, list given below) are prevailing on consumer rights
that aims to ensure safety products and security in service.

In negative sense, a list of consumer rights can be found from the explanation
of the term Acts against consumer rights.

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Section 2 (20) of the Consumer Rights Protection Act, 2009 states that Acts
against consumer rights mean:

a) Selling or offering to sale at a price higher than the price prescribed by any
law or Rule for any product, medicine or service;

b) Knowingly selling or offering to sale any adultered product or medicine;

c) Selling or offering to sale any product which has mixture of any object that
is dangerously harmful for human health and mixture of such object with food
is prohibited by any Act or Rule;

d) Deceiving people in general by false and untrue advertisement with the

purpose of selling any product or service.

e) Not to supply properly the product or service as promised in exchange price;

f) To sale or supply in a weight lesser than that has been promised at the time
of such sale or supply;

g) The scale or instruments of weighing using for sale or supply of any product
of a business establishment showing over weight that in actual weight;

h) Using less than in promised weight in time of sale or supply of a product;

i) The using ribbon for measuring length in any business establishment

showing more length than in actual size;

j) To make or manufacture any counterfeit product or medicine;

k) To sale or offer to sale any date expire product or medicine;

l) Commission of any act which is dangerous to the life or safety of the service
consumer that is prohibited under any Act or Rule;

We, therefore, may come to a conclusion that the prevention of the above acts
against consumer rights means to ensure consumer rights.

An overview of the Bangladeshi Laws on the promotion and Protection of

consumer rights

The general protection of the consumers may be derived from principles

enunciated in Articles- 15x and 18xi of the Constitution. This Articles, though
17
non-justifiable in its nature, indicates the importance attributed to the nutritional
status of the people and basic principles and measures for protecting consumers
from products, processes and services, which can endanger their health and
safety. This constitutional safeguard has been strengthened through
promulgation of related laws and regulations so that consumption be proper and
appropriate.

Moreover, in the Constitution of Bangladesh some justifiable fundamental

rights are incorporated which are connected with the rights of the consumers.
As for examples, Article 32 provides that no person shall be deprived of life
save in accordance with law; Article 38 provides that every citizen shall have
the right to form associations or unions, subject to any reasonable restrictions
imposed by law in the interests of morality or public order; Article 40 provides
that subject to any restrictions imposed by law, every citizen shall have the right
to enter upon any lawful profession or occupation, and to conduct any lawful
trade or business. These fundamental rights interalia are enforceable by the
Supreme Court of Bangladesh in accordance with Article 102 read with Article
44 of the Constitution.

The Consumer Rights Protection Act, 2009 provided both civil and criminal
remedies. A consumer is entitled to lodge complain to the Consumer Rights
Protection Department for any violation of the Act. The DCs of different
districts can exercise the same power as given to the department. A consumer
although barred from filing a direct complains to the police station under the
Consumer Rights Protection Act, 2009 can file a case to the Police station under
other Laws.

The Bangladeshi laws provides for the establishments of different organizations

to protect the rights of the consumers including various Courts or Tribunals
such as-

(i) Consumer Rights Protection Department; (ii) National Consumer Rights

Protection Council; (iii) Special Tribunal; (iv) Mobile Court (can work/ function
under various Laws; It may be constituted by a special executive order); (v)
Drug Court; (vi) Food Special Court; (vii) Ordinary Criminal Courts; (viii)
Ordinary Civil Courts; (ix) Marine Courts; (x) BSTI; (xi) Claims Tribunal etc.

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2:7. Conclusion
An individual who buys products or services for personal use and not for
manufacture or resale. A consumer is someone who can make the decision
whether or not to purchase an item at the store, and someone who can be
influenced by marketing and advertisements. Any time someone goes to a store
and purchases a toy, shirt, beverage, or anything else, they are making that
decision as a consumer.

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