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Consumer Protection – Class 12 Business Studies notes, important questions and MCQs

NCERT Class 12 Business Studies, chapter 12. Notes, key terms, important questions with answers and MCQs.

Chapter overview

Consumer protection means safeguarding consumers from unfair trade practices such as adulteration, false weights, misleading advertisements and defective goods. In India, the Consumer Protection Act, 2019, which replaced the 1986 Act, gives consumers six rights and sets up a three-tier redressal machinery of District, State and National Commissions, along with the Central Consumer Protection Authority. Consumers also have responsibilities.

Importance and the law

For consumers: consumer ignorance, unorganised consumers and widespread exploitation make protection necessary.
For business: long-term interest, use of society's resources, social responsibility, moral justification and government intervention all support consumer protection.
Under the Consumer Protection Act, 2019, a consumer is a person who buys goods or hires services for consideration for personal use, not for resale or commercial purposes; online purchases are included.

Rights and responsibilities

Rights: right to safety, right to be informed, right to choose, right to be heard, right to seek redressal and right to consumer education.
Responsibilities: be aware of products, buy standardised goods (ISI, Agmark, BIS hallmark), read labels, insist on a cash memo, file complaints, avoid unfair practices like black-marketing and form consumer societies.

Redressal machinery

District Commission: complaints where the value of goods or services paid is up to ₹50 lakh (as revised by the 2021 rules).
State Commission: above ₹50 lakh and up to ₹2 crore; National Commission: above ₹2 crore.
Appeals lie from the District to the State Commission, from the State to the National Commission, and from the National Commission to the Supreme Court within specified periods.
The Central Consumer Protection Authority (CCPA) protects consumer rights, investigates unfair trade practices and misleading advertisements, and can order recalls.

Key terms

Consumer protection: safeguarding consumers from exploitation and unfair trade practices
Consumer: a person who buys goods or hires services for consideration for personal use
Right to seek redressal: the right of a consumer to get relief against unfair trade practices or defective goods
Central Consumer Protection Authority: a regulator set up under the 2019 Act to protect consumer rights and act against unfair practices
ISI mark: a quality certification mark for industrial and electrical products issued by the Bureau of Indian Standards

Important questions with answers

State any four rights of consumers under the Consumer Protection Act, 2019.2 marks

Consumers have the right to safety against hazardous goods and services; the right to be informed about quality, quantity, purity, standard and price; the right to choose from a variety of goods at competitive prices; the right to be heard; the right to seek redressal against unfair trade practices; and the right to consumer education.

Explain the role of the Central Consumer Protection Authority.3 marks

The Central Consumer Protection Authority, set up under the Consumer Protection Act, 2019, promotes, protects and enforces the rights of consumers as a class. It investigates violations of consumer rights and unfair trade practices, can order recall of unsafe goods and refund, can act against false or misleading advertisements and impose penalties on manufacturers, endorsers and publishers, and issues safety notices to consumers.

Explain the redressal machinery under the Consumer Protection Act, 2019.5 marks

The Consumer Protection Act, 2019 provides a three-tier quasi-judicial machinery for redressal of consumer complaints. The District Consumer Disputes Redressal Commission is set up in each district and hears complaints where the value of goods or services paid as consideration is up to ₹50 lakh, as revised by the 2021 rules. The State Commission, set up in each state, hears complaints where the consideration paid is above ₹50 lakh and up to ₹2 crore, and also hears appeals against orders of District Commissions. The National Commission, at the national level, hears complaints where the consideration paid exceeds ₹2 crore and appeals against orders of State Commissions. Appeals against the orders of the National Commission lie with the Supreme Court. A complaint can be filed by a consumer, a registered consumer association, the central or state government, or the Central Consumer Protection Authority, and it can be filed electronically from where the complainant lives. The commissions can order removal of defects, replacement of goods, refund of price, compensation for loss or injury, discontinuation of unfair trade practices and withdrawal of hazardous goods. The Central Consumer Protection Authority also acts against unfair trade practices and misleading advertisements. Mediation is encouraged for quick settlement.

Quick revision

Consumer Protection Act, 2019.
Six rights: safety, information, choice, heard, redressal, education.
District, State, National Commissions; CCPA.
Quality marks: ISI, Agmark, BIS hallmark.

Exam tips

Learn the six consumer rights with one real-life example each.
Remember the three tiers and their monetary limits.

Practice MCQs

The present consumer protection law in India is the Consumer Protection Act of
1. 1986
2. 2002
3. 2019
4. 1992
Show answer
Answer: (c) 2019. It replaced the 1986 Act.
The quality mark for agricultural products is
1. ISI
2. FPO
3. Hallmark
4. Agmark
Show answer
Answer: (d) Agmark. It certifies farm produce.
The right of a consumer to get compensation for a defective product is the right to
1. seek redressal
2. choose
3. safety
4. be informed
Show answer
Answer: (a) seek redressal. Commissions provide relief.
A person buying goods for resale is
1. a consumer under the Act
2. a commission member
3. always a consumer
4. not a consumer under the Act
Show answer
Answer: (d) not a consumer under the Act. The purchase is for commercial purposes.
Under the revised limits, the District Commission hears complaints where the consideration paid is up to
1. ₹50 lakh
2. ₹10 lakh
3. ₹2 crore
4. ₹10 crore
Show answer
Answer: (a) ₹50 lakh. Higher amounts go to the State or National Commission.
The body set up under the 2019 Act to act against misleading advertisements is the
1. SEBI
2. RBI
3. Central Consumer Protection Authority
4. Competition Commission only
Show answer
Answer: (c) Central Consumer Protection Authority. It can order recalls and penalties.
A complaint where the consideration paid is ₹1.5 crore should be filed before the
1. State Commission
2. District Commission
3. National Commission
4. Supreme Court
Show answer
Answer: (a) State Commission. It is above ₹50 lakh and up to ₹2 crore.
Which is a responsibility of a consumer
1. buying without a cash memo
2. encouraging black-marketing
3. insisting on a cash memo and reading labels carefully
4. ignoring quality marks
Show answer
Answer: (c) insisting on a cash memo and reading labels carefully. These help in seeking redressal.

All chapters of Class 12 Business Studies

Written by Kundali IQ from standard, well-established facts to help with revision. This is not an official NCERT publication; always read your textbook too.