Consumer rights is the set of entitlements and protections that individuals have when engaging in commercial transactions, ensuring their safety, fair treatment, and access to accurate information. These rights grant consumers the power to make informed choices, seek redress for faulty products or services, and participate in a competitive marketplace. However, alongside these rights, there are inherent risks that consumers face, including deceptive marketing practices, product defects, data breaches, and financial scams.
Can consumers hold marketplaces legally responsible for substandard products? What legal protections are available to consumers in such events? How can consumers effectively navigate legal disputes arising from misleading advertising or deceptive marketing practices?
Consumer Risks
Consumer rights activists claim that instances of market fraud are rapidly increasing, primarily due to the government's apathy. In Nepal, there is a widespread prevalence of food adulteration, the sale and distribution of expired goods, price and quantity deception, as well as the circulation of counterfeit products, and these issues are on the rise. Food adulteration is a common problem in Nepal, affecting a wide range of food items such as milk, dairy products, spices, water, tea, edible oils, and lentils, which are often found to be contaminated with harmful substances. Moreover, expired packaged food and cosmetic items are sometimes relabeled and sold, posing risks to human health due to the presence of harmful toxins in these expired products.
According to the Department of Food Technology and Quality Control, they lodged 115 cases against companies involved in producing and selling adulterated foods in the last fiscal year, which concluded in mid-July. In the previous fiscal year, the department had taken legal action against 55 instances of business malpractice. Moreover, there was an increase in the number of complaints related to trademark infringement, with 91 complaints received in the last fiscal year compared to 75 in the previous year.
In 2018, the Department of Food Technology and Quality Control discovered that packaged milk being sold in Kathmandu was contaminated with chemical substances like washing soda and detergent chemicals.
A significant case of fraud was uncovered in the sale of counterfeit honey. In January 2022, Naresh Shrestha from Sindhupalchok was arrested by the Metropolitan Crime Division for manufacturing and selling fake honey. During the arrest, the police confiscated 600 kg of the counterfeit product, which he had produced by mixing glucose and sugar.
In February 2022, the police conducted a raid on Sparsh Food Products and Packaging Company in Lalitpur, which specialises in the production of bread and cookies. The police discovered that the factory was utilising expired bakery products, potentially leading to severe health problems.
Additionally, in August 2022, law enforcement seized a considerable amount of liquor from various brands, including Double Black Label, Black Label, and Jack Daniels, in Kathmandu. Subsequently, in January 2023, the police stumbled upon duplicate liquors of both domestic and foreign brands. The seized items included six bottles of duplicate Golden Oak, 48 bottles of 8848 Vodka, 420 bottles of Mughlan, 30 bottles of 2020 Aphal, 92 bottles of Khukuri Rum, and 132 bottles of Ruslan vodka.
International Protection Mechanism
Consumer International, a global organisation for consumer groups, designates March 15 as World Consumer Rights Day each year. The origin of this day can be traced back to a speech by U.S. President John F. Kennedy on March 15, 1962, where he presented the Consumer Bill of Rights. He proposed four fundamental facets of consumer rights.
- Right to safety: It asserts that consumers are entitled to protection from products and services that pose risks to their health or well-being.
- Right to be informed: It is crucial in safeguarding consumers against fraudulent, deceptive, or highly misleading information, advertisements, labels, and other practices. Inconsistent labeling practices and insufficient product information are quite common in poor economies.
- Right to choose: It implies that consumers should have the freedom to select from a variety of products and services provided by different suppliers in the market. However, in Nepal, the government has imposed a monopoly on a few products and services.
- Right to be heard: It acknowledges that consumers have the right to express their opinions and concerns about the products and services they utilise. This encompasses the right to have their complaints addressed promptly and fairly, as well as to be represented in the formulation of policies and regulations that affect their interests.
These rights have since influenced the development of policies by international organisations such as the European Union, OECD, and the United Nations.
The United Nations General Assembly unanimously adopted guidelines for consumer protection on April 9, 1985. This development led consumers worldwide, regardless of their socioeconomic status, to prioritise examining their national laws in line with internationally recognized standards. Consumer International (CI) played a crucial role in convincing the global community and the United Nations to acknowledge eight essential consumer rights. These rights encompass the right to basic needs, safety, information, choice, being heard, redress, consumer education, and a healthy environment.
Consumer Protection Laws in Nepal
The Constitution of Nepal, in its Article 44 ensures the rights of consumers by stating that every consumer has the right to receive goods and services of high quality. Additionally, individuals who have suffered harm or injury due to substandard goods or services are entitled to seek compensation in accordance with the law.
The Consumer Protection Act of 2075 (2018) establishes a legal framework that allows consumers to seek judicial remedies to enforce their rights and receive compensation for any harm or injury they may experience. The Act also imposes penalties on those who violate consumer rights, including fines ranging from Rs 100,000 to 300,000 or a prison term of three months to one year, or both. In order to expedite the resolution of cases related to consumer protection, the Act allows for the use of summary procedures during trials and settlements. However, there may be exceptions to this rule depending on the circumstances of the case.
Furthermore, the Right to Food and Food Sovereignty Ac 2075t not only emphasises the importance of ensuring access to adequate and nutritious food for the people but also underscores the significance of maintaining food quality.
Implementation and Shortcomings
In Nepal, there is a prevalent issue of substandard goods being sold without meeting the prescribed standards. Although the Consumer Protection Act 2018, in section 5, states that the government should establish standards or quality requirements for goods and services that are inherently uncertain, there has been a lack of enforcement in implementing these regulations.
Despite the inclusion of Consumer Courts in the Consumer Protection Act of 2018, the Nepalese government seems disinterested in setting them up. As a result, many cases remain unresolved in the District and High courts, leading consumers to hesitate in seeking legal recourse for breaches of their rights and instead opt for compromises. The combination of consumer reluctance to take legal action and the prolonged court processes endangers consumer rights in Nepal.
Last year in February, Nepal's Supreme Court mandated the government to create consumer courts in all seven provinces, aiming to safeguard the rights of buyers who have been affected by unfair market practices. This decision came about as a result of the Forum for Protection of Consumer Rights Nepal presenting their concerns to the court. Unfortunately, there have been no signs of progress in establishing consumer courts in any of the country's provinces. Consequently, currently, cases are filed at either the district court or the District Administration Offices, which results in prolonged procedures and bureaucratic challenges. Typically, it takes three to six months for the district court to reach a verdict, and in many instances, the responsible company does not face any meaningful consequences due to the gradual loss of evidence over time.
The practical implementation of consumer rights protection falls short compared to its theoretical framework due to the lack of proactive engagement from both consumers and sellers. Consumer awareness is lacking, and sellers often enforce policies such as "no returns" without realising that such practices are against the law. It is the responsibility of sellers to provide high-quality products to consumers. While legal provisions may be inefficient, the primary issue lies in the public's ignorance of their rights. However, authorities have shown a positive response when violations are reported.
An illustrative example of this is a Supreme Court verdict in favour of a woman who faced fraudulent practices by a health clinic when applying for a job in Israel. The clinic provided her with fake reports without conducting a proper health check-up, resulting in visa and employment complications. She was awarded compensation amounting to Rs 600,000.
The existence of consumer protection laws in Nepal, although being comprehensive, has still fallen short and consumers continue to be widely victimised. Several factors contribute to this unfortunate situation. Firstly, government agencies exhibit a reluctant attitude towards implementing the law genuinely. Secondly, consumers lack awareness of their rights, particularly among the majority who are impoverished and illiterate. They often disregard the quality of goods. The limited number of consumer protection organisations further compounds the challenges they face due to limited resources. Additionally, Nepal's status as a landlocked country with open borders poses a disadvantage as low-quality goods are often sold at high prices.
Consumers refrain from lodging complaints about defective goods or services primarily due to the lack of prompt justice and resolution.
Conclusion
It is crucial for consumers to be aware of their rights and exercise caution to mitigate potential risks, while also advocating for stronger consumer protections in an evolving digital landscape. Consumers should ask sellers for the cost price of products to ensure they are not being overcharged. Consumers should ask for a bill for their purchases. Violations of consumer rights can be reported to inspection officers, consumer rights organisations, and other stakeholders. Government authorities need to be proactive in creating a systematic structure that benefits consumers. Sellers, producers, and officials in the supply chain all have a responsibility to fulfill their roles.
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