In order to maximise profits, many businessmen exploit consumers by supplying poor quality goods at higher prices. They adopt unfair trade practices such as adulteration, boarding, black-marketing, etc.
As a result consumers do not get value for their money. Big business houses use their power for private gain and to the detriment of consumers. Consumers are exposed to physical, environmental and other hazards.
They need to be protected from spurious, duplicate and adulterated products, pollution of air, water and noise, and misleading advertising.
Consumers need protection due to the following reasons:
1. Illiteracy and ignorance:
Consumers in India are mostly illiterate and ignorant. They do not understand their rights. A system is required to protect them from unscrupulous businessmen.
2. Unorganised consumers:
In India consumers are widely dispersed and are not united. They are at the mercy of businessmen. On the other hand, producers and traders are organised and powerful.
3. Spurious goods:
There is increasing supply of duplicate products. It is very difficult for an ordinary consumer to distinguish between a genuine product and its imitation. He pays the price for the original but gets a substandard product. It is necessary to protect consumers from such exploitation.
4. Deceptive advertising:
Some businessmen give misleading information about quality, safety and utility of products. Consumers are misled by false advertisement and do not know the real quality of advertised goods. A mechanism is needed to prevent misleading advertisements.
5. Malpractices of businessmen:
Fraudulent, unethical and monopolistic trade practices on the part of businessmen lead to exploitation of consumers. Consumers often get defective, inferior and substandard goods and poor service.
Certain measures are required to protect the consumers against such malpractices. Greedy businessmen indulge in adulteration, boarding, black-marketing and other illegal practices.
6. Freedom of enterprise:
Businessmen must ensure satisfaction of consumers. In the long run survival and growth of business is not possible without the support and goodwill of consumers. If business does not protect consumer’s interests. Government intervention and regulatory measures will grow to curb unfair trade practices.
Thus, consumers need protection against the following:
(a) Unsafe and harmful products,
(b) Unfair trade practices,
(c) False advertising,
(d) Abuse of monopoly power,
(e) Environmental pollution.