Unfair trade practices
Wednesday, 12 October 2022 12:58 PM
An unfair trade practice means a trade practice, which, for the purpose of
promoting any sale, use or supply of any goods or services, adopts unfair method,
or
unfair or deceptive practice. Unfair practices may be categorized as under:
1. False Representation;
2. False Offer of Bargain Price;
3. Free Gifts Offer and Prize Schemes;
4. Non-Compliance of Prescribed Standards;
5. Hoarding, Destruction, etc.
6. Manufacturing Spurious Goods
7. Not Issuing Bill, etc.
8. Refusing to Withdraw Defective Goods or to Discontinue Deficient Service; and
9. Compromising Confidential Personal Information of the Consumer.
The first six were covered by the Consumer Protection Act, 1986. The last three are
added by the Consumer Protection Act, 2019.
1. FALSE REPRESENTATION
The practice of making any oral or written statement or representation which:
1. Falsely suggests that the goods are of a particular standard quality,
quantity, grade,
composition, style or model;
2. Falsely suggests that the services are of a particular standard, quantity or
grade;
3. Falsely suggests any re-built, second-hand renovated, reconditioned or old
goods as
new goods;
4. Represents that the goods or services have sponsorship, approval,
performance,
characteristics, accessories, uses or benefits which they do not have;
5. Represents that the seller or the supplier has a sponsorship or approval or
affiliation
which he does not have;
6. Makes a false or misleading representation concerning the need for, or the
usefulness of, any goods or services;
7. Gives any warranty or guarantee of the performance, efficacy or length of
life of the
goods, that is not based on an adequate or proper test;
which he does not have;
6. Makes a false or misleading representation concerning the need for, or the
usefulness of, any goods or services;
7. Gives any warranty or guarantee of the performance, efficacy or length of
life of the
goods, that is not based on an adequate or proper test;
8. Makes to the public a representation in the form that purports to be-
(a) a warrantyor guarantee of the goods or services,
(b) a promise to replace, maintain or repair the goods until it has achieved a
specified result, if such representation is materially misleading or there is no
reasonable prospect that such warranty, guarantee orpromise will be
fulfilled.
9. Materially misleads about the prices at which such goods or services are
available in
the market; or
10. Gives false or misleading facts disparaging the goods, services or trade of
another
person.
Such false statement may be –
(a) expressed on an article offered or displayed for sale, or on its wrapper or
container; or
(b) expressed on anything attached to, inserted in, or accompanying, an
article
offered or displayed for sale, or on anything on which the article is mounted
for
display or sale; or
(c) contained in or on anything that is sold, sent, delivered, transmitted or in
any
other manner whatsoever made available to a member of the public.
2. FALSE OFFER OF BARGAIN PRICE
Where an advertisement is published in a newspaper or otherwise, whereby goods
or services are offered at a bargain price when in fact there is no intention that the
same may be offered at that price, for a reasonable period or reasonable quantity,
it
shall amount to an unfair trade practice.
The ‘bargain price’, for this purpose means,
1. the price stated in the advertisement in such manner as suggests that it is lesser
than
the ordinary price, or
2. the price which any person coming across the advertisement would believe to be
better than the price at which such goods are ordinarily sold.
3. FREE GIFTS OFFER AND PRIZE SCHEMES
The unfair trade practices under this category are:
1. Offering any gifts, prizes or other items along with the goods when the real
intention
better than the price at which such goods are ordinarily sold.
3. FREE GIFTS OFFER AND PRIZE SCHEMES
The unfair trade practices under this category are:
1. Offering any gifts, prizes or other items along with the goods when the real
intention
is different, or
2. Creating impression that something is being offered free alongwith the goods,
when
in fact the price is wholly or partly covered by the price of the article sold, or
3. Offering some prizes to the buyers by the conduct of any contest, lottery or
game of
chance or skill, with real intention to promote sales or business.
4. Withholding the information about final results of the scheme from the
participants,
i.e., results are not published (a) prominently; and (b) within a reasonable time.
4. NON-COMPLIANCE OF PRESCRIBED STANDARDS
Any sale or supply of goods, for use by consumers, knowing or having reason to
believe that the goods do not comply with the standards prescribed by some
competent authority, in relation to their performance, composition, contents,
design,
construction, finishing or packing, as are necessary to prevent or reduce the risk of
injury to the person using such goods, shall amount to an unfair trade practice.
5. HOARDING, DESTRUCTION, ETC.
Any practice that permits the hoarding or destruction of goods, or refusal to sell the
goods or provide any services, with an intention to raise the cost of those or other
similar goods or services, shall be an unfair trade practice.
6. MANUFACTURING SPURIOUS GOODS, ETC.
Sec. 2(43) of the Consumer Protection Act, 2019 defines only ‘spurious goods’.
According to it, ‘spurious goods’ means such goods which are falsely claimed to be
genuine. Manufacturing spurious goods or offering for spurious for sale is an unfair
trade practice under the Consumer Protection Act, 2019. So also, adopting
deceptive
practices in the provision of services is unfair trade practice.
7. NOT ISSUING BILL, ETC.
Not issuing bill or cash memo or receipt for the goods sold or services rendered in
such manner as may be prescribed is unfair trade practice.
8. REFUSING TO WITHDRAW DEFECTIVE GOODS OR REFUSING TO
DISCONTINUE DEFICIENT SERVICE
Where the trader has warranted that he will -
1. withdraw the goods sold by him, if the same are found to be defective, or
2. discontinue the service, if found deficient, and has mentioned the time within
8. REFUSING TO WITHDRAW DEFECTIVE GOODS OR REFUSING TO
DISCONTINUE DEFICIENT SERVICE
Where the trader has warranted that he will -
1. withdraw the goods sold by him, if the same are found to be defective, or
2. discontinue the service, if found deficient, and has mentioned the time within
which the price or remuneration, as the case may be, will be refunded, he has to do
so. If no such time is agreed, sec.2(47)(viii) fixes the period at 30 days.
If the trader refuses to withdraw the goods and refund the price, or to discontinue
the service and refund the remuneration, he will be liable for unfair trade practice.
9. COMPROMISING CONFIDENTIAL PERSONAL INFORMATION OF THE
CONSUMER
Often, the seller of goods or provider of service need sensitive personal
information of the consumer as a requirement of the trade, or as a requirement of
law. Unless the consumer provides the information, the goods may not be sold to
him or service may not be provided to him.
Therefore, the consumer provides his personal information to the trader. The
trader
is under a legal obligation of keeping such information confidential.
If the trader discloses to or shares that information with some other person
without
legal permission, he is liable for unfair trade practice.
