History of Consumer Protection

Consumer protection, as known today, has roots even in the daily lives of the Stone Age cave men. A seller sells a product to a buyer, the buyer finds the product not to be up to his satisfaction; coincidence, some would say. But is it? In the absence of definitive statistics, the instinct of a consumer living in a capitalist society would lead me to wonder if the seller intentionally did or did not do something that led to my compromised consumer satisfaction.

Today’s consumerism finds its origin in the late 19th and early 20th century marketplace in the United States. The United States Congress made history in 1872 by enacting the very first of its kind consumer protection law, the mail fraud law, which makes it a punishable offence to commit mail order fraud. At best rudimentary and lacking teeth to curb anything but false advertising, this law did nothing to prevent unsafe, unhealthy and dangerous products from reaching the hands of trusting consumers.

The passage of the Sherman Anti Trust Act passed by the US Congress in 1890 was the next feather in the cap of consumerism. This act prevents and limits the formation of cartels and monopolies that challenge the very frame of consumer rights. The ground for the majority of antitrust law suits, this federal law does not address the most critical area of consumer protection, the product quality.

Apart from minor legislations at a state level, it was the beginning of the 20th century that marked the revival of the consumer protection movement, which had been docile for the past 15 years or so; the impetus being the publication of The Jungle by Upton Sinclair in which the author described his disgust at the meat packing industry in Chicago. Horrified, President Theodore Roosevelt had these allegations verified independently by federal agents, who confirmed the distressful conditions of the meat that American consumers ate.

Soon afterwards in 1906, the US Congress passed the Pure Food and Drug Act which, along with the Sherly Amendment, curbs sellers from selling adulterated food / drugs and places guidelines on the accuracy of the data on labels. Together with the Meat Inspection Act, the government had ensured a legal framework to prosecute anyone who would willfully violate the quality of the food and medicines used by the consumers.

Other landmarks in the consumer protection movement were the establishment of the Federal Trade Commission (FTC) in 1914 and the establishment of the Food and Drug Administration (FDA) in 1931. This was closely followed by the Food, Drug and Cosmetic Act of 1938 which enabled the FDA to test new drugs before they reached the hands of the consumers.

In the mid twentieth century, the two stalwart figures in the consumer protection movement were Ralph Nader and John F Kennedy. In a historic speech in 1962, Kennedy was the first one to define the basic consumer rights as they are still used today. A milestone in the consumer protection movement came with the publishing of Ralph Nader’s book ‘Unsafe at Any Speed’ in 1967. Leading to the enactment of The National Traffic and Motor Vehicle Safety Act in 1966, this book was the first attempt by a common citizen to exercise his consumer rights against the big corporate sharks.

Kennedy introduced the Consumer Bill of Rights in 1962 in the US Congress. This was closely followed by several bills legislations such as The Cigarette Labeling Act (1965), The Fair Packaging and Labeling Act (1966), and the Wholesome Meat Act (1967) and the establishment of the Consumer Product Safety Commission (CPSC) in 1972.

In India, as always the laws reach late. Obviously, the Indian politicians could not hold on any longer protecting their business patrons against public outcries of corporate fraud, deceit and callousness in general. So in December 1986, the Consumer Protection Act was reluctantly passed by the Indian Government to protect the consumers.

Independently if reviewed, the Consumer Protection Act 1986 has all the mistakes that the developed economies made with their consumer legislations over 25-50 years ago. One would assume that the Indian politicians would use their wisdom to not repeat the mistakes that have already been made by others, but then again, loopholes in the law means more protection for the corporate sharks. So willfully some “mistakes” may have been introduced.

The Consumer Protection Act 1986 is at best a mediocre attempt at consumer protection. Nevertheless, better none than one when it comes to laws in India! It lacks teeth in several areas including safety, product labeling, execution of the law, and punishment of the violators of the law. Sadly, violators of consumer rights still enjoy absolute freedom in India to disregard safety and quality when it comes to consumer products despite this law. You may read more about the Consumer Protection Act 1986 here.