The 12th International Consumer Law Conference Blog

Organised by NALSAR and the International Association for Consumer Law

27th February: Creating a Legal Infrastructure to protect Consumers in a Global Economy Consumers Rights and Poverty

Chair: Dr. A. Rajendra Prasad, Head, Department of Law, Andhra University

Joyeeta Chatterjee, Gujarat National Law University: Vulnerable Consumers and Poverty as an Issue of Consumer Law.

 

In the present era of globalization, the ‘cause and effect’ phenomenon relates to poverty has become immensely entangled and the present and the present surge of consumerism in its most aggressive mien has added fuel to the fire. It is largely contented that globalization policies have failed to strike a healthy balance between growth, development and its negative side- effects.

 

Competition between producers to attract customers is expected to create economic efficiency, innovation and better quality products at lower prices. However, instead of offering choices and lower prices, liberlisation has led to the creation of monopolies and cartels thereby denying consumer the very benefit which it is supposed to promote. It is thus imperative that competition is promoted with the benefit to the consumer in mind.

 

Consumer over- indebtedness has too been a central legal policies, procedures, law and cases from a consumer welfare perspective. It would throw light on the existing legislation in over- indebtedness and consumer bankruptcy along with consumer bankruptcy along with consumer insolvency regulation, and consumer credit legislations. Apart from linking debt relief to poverty reductions, it would analyze the nexus between bankruptcy and poverty. It would further suggest methods that can be adopted in the realm of consumer law to alleviate the poverty.

 

Ashish Krupakar, IInd Year, Gujarat National Law University: Vulnerable Consumers and Poverty as an Issue of Consumer Law:-

 

The speaker put forth his main aim, to address the need for the presence of a consumer law coupled with a procedure which would address the need of vulnerable consumers which the mainstream laws fail to address. He firstly defined a consumer as per Indian laws, the definition provided by the Consumer Protection Act of 1986 which was enacted in furtherance of the United Nations Guidelines. As per this Act, a Consumer is one: -who buys goods for a consideration, or someone who buys services for a consideration.

He says that the Consumer Protection Act of 1986 does not make any special provisions with regard to uneducated consumers and the poor whose access to legal remedy is restricted. He suggested that the Consumer Protection Laws should be further expanded with a view to include the following:

  1. Protection of consumers from hazardous goods and the right to safety and health.
  2. The promotion and protection of economic interests of the poor.
  3. Access to adequate information.
  4. Control of misleading advertisements and deceptive information.
  5. Consumer Education.
  6. Effective Vulnerable Consumer Redress.

His final recommendations were that we need in India the following:

  1. Consumer Education
  2. Adequate Consumer Information
  3. Presence of a non – litigation form of a redress mechanism to settle minor disputes as a measure to tackle expensive litigation.
  4. Simplify existing procedures in cases where litigation is a must and provide poor litigants with the right to free legal aid. 

                         Rapporteurs

         Ayushi Mittal, IInd Year, NALSAR University of Law Hyderabad

         Disket Angmo, IInd Year, NALSAR University of Law, Hyderabad.

 

 

 

          

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Filed under: Sessions

26th February: Over Indebtedness and Possible Solutions

Chair: Dr.P.V.R.Jagan Mohan Rao, Director, Finance and Comapny Secretary, Ind- Barath Power Infra Ltd (India)

Phumudzo Munyai, Professor, UNISA (South Africa) :How to Crub Over- Indebtedness and Enhance Consumer Welfare in South Africa: Lessons from Islamic Law

 

Over spending and easy credit is singled out as the single biggest cause of consumer over indebtedness in many countries. Little attention is paid to economic and monetary polices and practices as possible causes of consumer over indebtedness. In South Africa easy credit is generally blamed for consumer over indebtedness. The National Credit Act, 34 of 2005, was premised fundamentally on these assumptions. The Act protects unworthy borrowers from unscrupulous credit providers, there is little attention paid to the welfare of those credit worthy borrowers, once the credit transaction is concluded. A comparative study reveals that there are valuable consumer protection lessons South Africa can learn from Islamic Law, which denounces payments or receipt of interest. By efficiently protecting consumers against higher prices, in the form of interest, Islamic law provides obvious benefits for consumers, especially the poor who would otherwise not be able to avail the certain basic needs. The benefit of this approach is that is that resulting consumer satisfaction will boast confidence in our credit system while at the same time ensuring equitable resource distribution and balanced economic growth in the long term.

 

 

Vincente Gozalo Lopez, Assistant Proffesor, Universaity of Cantabria (Spain): Over Indebtedness in EU

 

House hold over indebtedness has been a wide spread problem for years, but Spanish law makes no specific provision for it. At most the Spanish legislation has created a number of institutions designed more as a means to prevent over borrowing by placing constraints on lenders advertising. Looking at statutory provisions, it is a fact that consumers in Spain are unprotected in insolvency proceedings. This is unusual, since leading European Union countries have implemented frameworks that enable a consumer who is undergoing economic hardship to negotiate a grace period for her debts, or once her attachable assets have been fortified, she may even have liability extinguished for any debts that still remain outstanding. It is the nonetheless to be borne in mind that law in these European states is very careful to ensure that this fresh start afforded to a household so that it can sustainable rebuild its domestic finances is not granted blindly or indiscriminately in the form of an absolute discharge, rather the law deliuates the conditions of varying strictness under which it is fair for a consumer to enjoy protection.  The consumer insolvency calls for a range of legislative decisions that remain unachievable by any interpretative approach to the positive law now in place. Any reform should preserve a number of principles that have been worked out in the legal doctrine has so far addressed the issue.

 

Philip Stoop, Lecturer,University of South Africa: South African consumer credit policy: measures indirectly aimed at resolving and preventing consumer’s over indebtedness

 

The Global economy has boomed during the last two decades and the boom is largely due to an increase in granting of credit and easy access thereto. However this economic boom came at a price since the number if individuals and business that are over indebted has reached new heights. Legislation protecting debtors and aimed at directly of indirectly preventing the problems of over spending in various ways is therefore an international phenomenon and this legislation differs from country to country depending on the needs of the specific country. Due to a considerable imbalance of power between the credit providers and consumers, low education levels, poorly informed consumers, weak disclosure and deceptive marketing practice, South African consumers also entered into unaffordable credit contracts and this over indebtedness caused many social problems. In order to align new consumer protection, the National Credit Act introduces regulatory measures directly and indirectly aimed at resolving over indebtedness of consumers. The purpose of this paper was to thoroughly address some of the indirect measures aimed at resolving and curbing over indebtedness in the South African credit industry and the role the indirect measures play in relieving problems connected with poverty and over- indebtedness in the context of the global economy

 

                        Rapporteur

                      – Ayushi Mittal, IInd Year, NALSAR University of Law, Hyderabad     

 

Filed under: Sessions

25th February – Creating a Legal Infrastructure to Protect Consumers in a Global Economy; Consumer Protection and Varied Approaches

Session: 2:00 to 3:20 P.M. in Seminar Hall III

Chairs: Prof. Gail Pearson, University of Sydney, Australia – Streamlining Consumer Law Rules: an Australian Perspective, and Prof. N. Vasanthi, Associate Professor, NALSAR, Eco-labeling and its implications for third world farmers

Vasundhara Ravi and Geetanjali Dhankhar, Post-Graduate students of NALSAR (India), Developmetn of Ombudsman’s Role as a Champion of Consumer Interests in Financial Sector: A Study of the Banking Bombudsman Scheme in India.

The session began with Prof. Gail Pearson who discussed the position of consumers in her home country of Australia. One portion of her presentation dealt with the harmonization of consumer protection policies between Australia and New Zealand. This is in light of the recent effects on globalization that has affected the two countries. The next portion dealt with Red Tape with respect to rethinking regulation and  the cost of business and regulating reform. There needs to be a review of consumer protection laws. Also examined was the extent of self-regulation in terms of financial services, which is higher in Australia in comparison to other countries. Government intervention is necessary because the competition policy alone is not enough. In conclusion, Prof. Pearson emphasized the need to get rid of the inconsistencies present in the law and that there was not enough being done to protect the consumer. The advantage with the issuance of a federal law is consistency while the disadvantage might possibly be a loss of innovation. The fact of the matter is that a country needs to compete economically and for best consumer protection.

Vasundhara Ravi and Geetanjali Dhankhar:

The Ombudsman scheme has as its basic philosophy the provision of an inexpensive, expeditious, fair and accessible system of dispute resolution. The word ‘Ombudsman’ meaning a ‘grievance man’ is a public official who is appointed to investigate complaints against the administration. The concept has now been extended to the private sector as well including banks, telecommunication, transport, insurance, energy, and media broadcasting.

The first part of the presentation dealt with the examination of the role of Banking Ombudsman plays in providing expeditious and satisfactory disposal of customer complaints in a time bound manner. In the second part, the revised Scheme of 2006 was discussed. The presentation ended with a view of the lacunae in the Scheme and various ideas to address them.

Prof. N. Vasanthi:

Consumer Law has moved beyond looking at the interests of consumers alone and has taken a holistic approach to concerns of consumers by viewing consumers ultimately as citizens of a nation and increasingly global citizens. The concerns of consumers in any part of the world are tied up to the concerns of the manufacturers in other parts of the world.  With increasing decentralization of manufacturing and a global market opening up for products from smaller countries the issues of consumers in the first world and manufacturers in the third world raises questions that perhaps the earlier laws do not adequately deal with.

The focus was on eco-labelling. Withe the advent of genetically modified crops and the aggressive selling of such seeds in third world countries that move to label goods has the potential to damage the limited access to markets that such countries have. The presentation looked at the experience of the rug mark labeling against the use of child labour and the Harkin bill to prohibit goods from countries where child labour is prevalent and their implications for labeling regarding genetically modified crops.

Filed under: Sessions

Banking System and Growth in India: Forum Constituted for Dispute Resolution of Consumers

Speaker- Mr. D.V. Seetharama Murthy, Advocate, AP High Court.

The growth of the banking sector in India, right from 1969 till the present day, was traced by the speaker.According to the speaker,the adjudication systems  in place for disputes in the banking system are not enough.In bank related disputes, there was no system of compulsory participation of people who had some knowledge of the banking procedures.Lack of people having a banking background in the adjudication of such disputes led to a lot confusion.An instance of this provided by the speaker was that of a hearing of a bank related case where the judge kept getting confused on the difference between the words credit and debit. Such instances hamper the proceedings of the case.Keeping such problems in mind, the Reserve Bank of India came up with the concept of ombudsman.The Chairman of the ombudsman committee was to be of the rank of a manager or a deputy manager of a bank. This provision took care of the problem of having people with no banking knowledge as adjudicators. The main problem was that according to the Superme Court, the ombudsman was to be a tribunal of limited jurisdiction and also that the scheme regarding the ombudsman was just an administrative step taken by the Reserve Bank and had no statutory authority. In case of any dispute regarding the jurisdiction,between a court and an ombudsman,the jurisdiction of the ombudsman would seize to exist.In effect, the position of the ombudsman was reduced. Also, an ombudsman could not award compensation of an amount which was more than the amount lost.Thus, the ombudsman could not take into award any compensation for the cost of litigation or the mental agony suffered by the litigant.  A copy of the award of the ombudsman was to be provided to the bank within 15 days by the consumer or else the award would lapse. In India, where lapses in the time period are very common,the viability of such clauses need to be looked into.Further,no lawyers are allowed to argue in front of the ombudsman.Thus,lay persons,who have absolutely no knowledge of law,end up arguing in a very ineffective and digressing manner and thus hamper the proceedings.

The speaker also spoke about a case, Durga Hotel Complex v. Union of India, 2007 (5) SCC 120,which has sounded the death knell for the authority of the ombudsman.The Supreme Court held that an ombudsman would have jurisdiction is any case only if the case was not pending before any court or tribunal.The provision regarding the ombudsman had no statutory force. According to the speaker,the ombudsman needs to be provided with the necessary teeth and claws to make the adjudication effective.The provision regarding the ombudsman should have statutory authority.For matters involving complex points of law,the litigants need to be given the option of engaging lawyers.The clause regarding the time limitation of 15 days needs to be looked into and the execution of the awards needs to be made simpler.Further, a proper procedure code,to be followed by the ombudsman should be laid down.A legislation addressing all these issues needs to be enected to provide a much needed effective redressal forum.

Filed under: Sessions

25th February, 2009: Architecture of Consumer Protection in a Global Economy

Neera Bhatia, University of Birmingham (UK), Supply and Demand: Survival of the Richest

 

Technological and medical developments of the twentieth and twenty- first centuries have seen great advances in the treatment and cure of serious illnesses. One such area is that of organ transplants, with transplants increasing dramatically. In this paper the main object which has been dealt with is the kidney transplant.  The problems faced during the transplant and the after affects of the transplant. The problem of black market arises when there is a lack of the organs and people in need of the organs tend to fall for the black market of these organs. To get the organs to sell in the black market these people tend to murder and exploit these people. This is a universal problem for both developed as well as a developing country. Internet is a very beneficial part in helping the transaction of selling the organs. People generally tend to sell the organs due to poverty, dowry threat or clearing debts.

 

The number of people on the waiting list for transplants however is growing, resulting in a clear shortage of organs and many patients dying while on the waiting list. This gap in the market has allowed for the creation of booming black market in living donor organ supply.

 

A case in US where a person advertised to sell a kidney on ebay for which there was ample amount of bidding for the same. This gives the owner of ebay a great idea of selling kidneys on line. In UK a young individual who was over burdened by the student debt offered to sell his kidney for 75,000 pounds and landed up paying 100 thousand pounds and three years imprisonment as the sell of organs in such a fashion is illegal.

 

In developing countries selling of organs is coercion and threat or an incentive to earn in quick fix. Selling of kidneys is not a legal procedure. There are operations which take place in the black market and these patients are left within two days without any proper instructions given to them for their bodily health. Though a person can lead a healthy life even with one kidney but still the amount of risk and harm caused is significant.

 

With a basic supply and demand problem, already organs are available to those who can afford them. Clearly   many ethical issues are raised in the donor transplant and trade debate, however these are further exacerbated when cross bordered and cross socio economic donations are involved. The organs trade is particularly strong in under developed countries such as Indonesia, China and India raising concerns regarding the exploitation and commodification of the impoverished.

 

This paper examines the current socio- economic characteristics of the organ trade, and asserts that a market model must be applied to protect the legal and human rights of both consumers (patients) and sellers (donors). Further, this paper will argue that such a model and associated regulations are necessary for the protection of the value of human life, whether rich or poor.

                               Rapoteurs-

                                  – Ayushi Mittal, IInd Year, NALSAR University of Law, Hyderabad

                                  – Ankita Gupta, IInd Yeae, NALSAR University of Law, Hyderabad.

Filed under: Sessions

25th February, 2009: Architecture of Consumer Protection in a Global Economy

Participant: Manasa J. & Chaitanya B., NALSAR (India), Trademark Violations and Consumer Interests and Analysis. 

In order to determine the Consumer Interest there is a need to harmonize the consumer law that protects the interest of the consumer and the Trademarks law that protects the interest of the procedures. Trademarks in its long run gained importance for both producers and the consumers. A consumer is one who purchases goods and services from the market which is the producer. According to Ralph Nader a consumer should be defined as a citizen as each and every citizen in the society is in some way or the other every one is a consumer.

 

A transaction between a consumer and a producer on breach will call for both Criminal as well as Civil Liability depending on the kind of the fraud committed by the parties. A brand is based on the name of the logo, name and basically for a product. Trademark is based on Intellectual Property Rights.

 

The main scope of the paper was be to look into the consumer related issues with special emphasis on Trademarks and to examine the pros and cons connected with protecting consumer interest in trademark violations. This was dealt with reference in to India.

 

Every transaction has an economic perspective. In this we see how not only the owner is at the losing end but also the consumer is. The loss borne by the producer is taken care of by the market but the loss borne by the consumer is not given any consideration and is not looked into. The consumer is stuck between a group of trade marks and brand names from where he does not know how to escape.

 

When the rights of a consumer is breached he is either to ignorant to sue and does not know of his rights, either does not have enough money to pay for a suit to be filed. Moreover Section 29® of the Consumer Protection Act does not lay down on what basis is a consumers right breached. It completely depends on the judge and his discretion. Therefore it is generally very difficult for the consumers to prove that the producer has cheated them. Consumer Protection Act is supposed to be the umbrella legislation even though it does not incorporate the rights of the consumers in a direct manner and it does not look into the matters in a detailed manner.

 

The consumers are highly affected due to the trademarks and the brand names. Especially by the trademark violation and the remedies that have a check on such violations.  The major infringement on the trademarks is the similarity in the trademark, Trade mark and branding. The question which should be answered mainly is that how are these products supposed to do things differently and create a different place for themselves. The main aim of the paper has been to show how the rights of the Consumer is not protected and trampled over by the Producers.

                                      Rapporteurs:

                                      -Ayushi Mittal, IInd Year, NALSAR University of Law,Hyderabad.

                                      – Ankita Gupta, Ist Year, NALSAR University of Law, Hyderabad.

 

 

 

 

 

Filed under: Sessions

25th February, 2009- Architecture of Consumer Protection in a Global Economy

Chair: Sothi Rachagan, Vice President, Nilai University College (Malaysia) Intellectual Property v. Consumer Rights- Need for an equitable balance of rights

Over the last 25 years, the IP regime has been developed so as to greatly tilt the balance in favor of the private rights of the inventor/ creator. There has been an unprecedented increase in the scope and extent of IP rights protection and a decrease in the public right to access. The public rights have been compromised with in all the fronts. This has taken place both at the international level as well as at the national level. The globalization of the Intellectual Property is through Proertization, Expansion and Harmonization. Creations of the middle/ inventions made have been deemed as property and its ownership privatized, it is like a “natural right theory”, the protection granted to private owners expanded, and the new norms standardized / harmonized the world over. The concept of putting patents on goods is not a new one. It is being followed through ages and various ways and is being abided by it as well.

The patent right being provided to people on the basis of their work has been increasing through the ages. Earlier the time span for a patent right was Life time of the author + 7 years from his death. Later this increased to Life time of the author + 50 years from his death and this slowly amplified to the Life time of the author + 70 years from his death. As this very clearly shows that the time period for the patents has been ever since it came into existence. 

The fact that there is no answer to the question as to who owns the patent rights over a traditional knowledge has been explained with the examples of Ethopian Barley, Periwinkle, West African Berry, Poison Dart Frog, Baobab Tree and the Neem Tree all of which belong to a country in specific and are very useful for the making of medicines. None of the listed above except the Neem Tree (it’s belonging to India) has been able to claim a patent right over itself. These goods have been used without the permission of the countries in where they are produced and there is in no way they are even receiving damages or compensation for the same. Only India has been able to attain Bio Privacy over the Neem Tree. The ratcheting up of IP protection adversely impacts almost all the rights of consumers. The paper outlines these developments and then focuses on the impact of the access to knowledge, medicines and seeds.

There is an immense amount of pressure on the developing countries for the Intellectual Property Rights as well as the Patent Rights. There should be efforts made to regain the public domain. In the end the consumer rights are affected immensely by the Intellectual Property Rights and the impact has to be converted into a positive one by using both the Patent rights and the Intellectual Property Rights in a cooperative manner.

The final part of the paper outlines some of the measures underway to reclaim the public domain.

                                  Rapporteurs:

                                – Ayushi Mittal, IInd Year, NALSAR University of Law Hyderabad.

                                – Ankita Gupta, Ist Year, NALSAR University of Law Hyderabad

 

The podcast of the session may be downloaded here.

 

Filed under: Sessions

25th February- Financial Services and Consumer Rights

Time of Session- 4:00- 5:30 p.m.

Chair- Prof. Michelle Kelly-Louw, Associate Professor, University of South Africa

Participants-

1. Rishi Srivastava and Sandeep S.- Plastic Money- How Safe Are You?

2. Vaishnavi Bhaskaran- Irresponsible Lending and Its Impact on Consumer Rights

3. Pratyush Jhunjhunwala- Financial Services and the Government

The session was solely based on Financial Services and its impact on Consumers as well as Consumer Rights. It began with the novel concept of Plastic Money, starting with the explanation of the card scheme, and the placement of the consumer in the entire chain. A brief introduction of the types of Plastic money such as debit cum ATM cards, credit cards, etc. was given, with a special emphasis on Debit cards as they are widely used in India. The threats to Consumers were outlined next,which was explained by dividing the threats into two broad categories, Fraudsters, by way of  skimming, phishing, identity thefts and also by way of stolen cards; and threats from the Banking Companies themselves, by way of caps on interest rates,  provision of Grace Periods, with certain hidden conditions of repayment, the Universal Default Clause, , billing related problems and harassment by recovery agents. The United States and UK, have been more proactive in this field, with their laws dating back to the 1960s. Several recommendations were also provided by the Speakers, a few being rights against unethical debt recollection, sealing of maximum liability in event of misuse of these cards, imposition of ethical obligations on banks and financial institutions to protect the consumers’s rights and  mechanisms to prevent counterfeit currencies in ATMs.

The next topic was about the concept of reckless lending, with a special emphasis on the recent subprime crisis in the United States. The cycle of reckless money-lending due to the creditors succumbing to the greed of higher interest rates, the IMF bailing them out by using the taxpayers’ money, and the consequences  such as instability of a country’s economy was explained. The concept of reckless money-lending, it’s consequences, ethical obligations and consequences were explained too. Other instances of abusive lending practices was also a part of this presentation such as sub-prime loans to prime borrowers and target customers. The other factors which could affect customers such as recovery agents for loans, foreclosures as a result of default and all these factors resulting in the downturn of the economies of several countries was explained. Finally, a brief outline of the legal framework for addressing these issues and other reforms was given by the speaker. 

The third speaker explained the importance of Financial Services and the Government, especially the protection of consumer rights in the Indian enactment, the  Consumer Protection Act, 1986. The Government is a provider of several financial services such as State Finance Corporations, creditor for self-employment schemes, Saving schemes,etc. The importance of maintaining transparency and provision of areas in which the consumer should be protected under the Consumer Protection Act was explained, so also the responsibility of the Reserve Bank of India to promote the banking sector to ensure the confidence of the public in the banking sector. The speaker ended by highlighting role of the government in this area, which included the upliftment of the Indian economy in the 1990s, and hence, it was imperative for the government to continue its work towards the maintenance of a healthy and transperant economy, by improving its own services first.

Filed under: Sessions

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