New Delhi: The Central Consumer Protection Authority (CCPA) is planning to initiate class action against companies that fail to meet quality standards, two people directly involved in the deliberations said, as the country’s top consumer watchdog seeks to curb substandard products flooding retail markets.
The proposed class action aims to hold such entities accountable and send a clear message about the importance of maintaining product quality for the benefit of consumers.
This proposal comes after the Department of Consumer Affairs noted that consumer durable companies are using different, substandard parts for products sold in tier-II and tier-III cities, making them less efficient than those approved during quality test certification by the Bureau of Indian Standards (BIS).
The department has also directed the Bureau of Indian Standards to enhance its market surveillance activities. This involves increasing inspections, testing products more rigorously, and identifying cases where companies are violating quality norms. This initiative comes in response to growing concerns about the proliferation of low-quality goods in the market, which not only harm consumers but also undermine fair competition among manufacturers and retailers. The bureau develops and publishes Indian standards, implements conformity assessment schemes, recognises and runs laboratories for conformity assessment, and implements hallmarking.
A class action refers to a lawsuit where one or more individuals represent a group with similar claims against a party, often for harm caused by negligence or misconduct. It streamlines legal processes, ensures consistent outcomes, and allows those with smaller claims to seek justice collectively, typically involving consumer protection or workplace issues.
The CCPA has the power to take class action under the provisions of the Consumer Protection Act, 2019. Specifically, under Section 10 of the Act, the CCPA can file complaints on behalf of affected consumers or initiate action to protect their rights collectively, making it capable of taking class action when necessary.
“We have analysed the complaints received at the National Consumer Helpline (NCH), which show a worrying trend. The complaints are against some of the reputed and globally acclaimed brands. The issues primarily concern consumer durables becoming dysfunctional,” said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity.
“Some of the complaints mention products becoming dysfunctional just a few months after their purchase, which is really alarming,” this person said.
Falling standards
According to a joint report by Crisil and the Authentication Solution Providers Association (ASPA) released in January 2023, about 25-30% of all products sold in the country are spurious, with counterfeiting being most prevalent in the apparel and FMCG sectors, followed by pharmaceuticals, automotive, and consumer durables.
As many as 27% of consumers are unaware that products are counterfeit at the time of purchase, but 31% willingly purchase spurious products, the report highlighted.
“The action is much needed, as India cannot be a dumping ground. When a consumer is paying the price for a quality product, there is no reason the consumer should be deceived with substandard products,” said the second person.
However, both the persons refused to share information about the total number of complaints registered against reputed firms regarding substandard products, and the names of the companies involved.
According to a report released in September 2024 by the Confederation of Indian Industry (CII), India’s consumer durables market is expected to reach ₹5 trillion by FY30 and will become the fourth-largest in the world by 2027. It is also estimated that the sector will create around 500,000 skilled jobs across the value chain by 2030.
“Consumers have a right to protection against deceptive practices and substandard products. When companies fail to uphold quality standards, they not only breach consumer trust but also violate the core principles of fair trade. Class action serves as a critical tool in holding such entities accountable and ensuring justice for affected consumers,” said Manish K. Shubhay, partner at The Precept-Law Offices.
