Introduction

Consumers may sometimes be misled by false advertisements, dishonest marketing, or misleading information about goods and services. Such practices harm consumers and disturb fair competition in the market.

To prevent these harmful practices, the Consumer Protection Act, 2019 defines and prohibits unfair trade practices.

Meaning / Definition

According to Section 2(47) of the Consumer Protection Act, 2019, an unfair trade practice means a trade practice that uses unfair or deceptive methods for promoting the sale, use, or supply of goods or for providing services.

The definition has two parts:

• The first part gives the general meaning of unfair trade practice.
• The second part lists several examples of such practices.

The Act mentions nine examples of unfair trade practices, which is more than the five examples provided in the Consumer Protection Act, 1986.

The law uses the word “includes”, which means the list is illustrative (example-based) and not exhaustive (not complete).

Modes or Types

False Representation

This occurs when a seller falsely claims that goods or services have certain quality, standard, or approval which they do not actually possess.

For example, claiming that a product is certified by a government authority when it is not.

Misleading Advertisement

Advertisements that mislead consumers about the nature, quality, or usefulness of a product or service are considered unfair trade practices.

These advertisements may create a false impression in the minds of consumers.

False Bargain or Discount Offers

Sometimes sellers advertise goods at special discount prices even though such prices are not genuine.

The purpose is to attract customers by creating a false impression of a bargain.

Sale of Substandard Goods

Selling goods that do not meet the required standards or quality while claiming that they are standard goods is also an unfair trade practice.

Hoarding or Destruction of Goods

Some traders may hoard goods or destroy them intentionally to create artificial scarcity and increase prices.

Such conduct harms consumers and is treated as an unfair trade practice.

Misleading Warranty or Guarantee

Providing false or misleading guarantees or warranties about the performance or life of goods is also considered an unfair trade practice.

Disclosure of Consumer Information

Sharing a consumer’s personal information without permission may also amount to an unfair trade practice unless it is allowed by law.

Sale of Hazardous Goods Without Warning

Selling goods that are dangerous without properly informing the consumer about the risks can also be treated as an unfair trade practice.

Manipulating the Supply of Goods or Services

Practices that manipulate the availability or supply of goods and services to influence prices or consumer choices may also fall under unfair trade practices.

Practical Example

A company advertises a health drink claiming that it is approved by a government medical authority and guarantees instant health benefits. Later, it is discovered that the product has no such approval.

This advertisement is misleading, and the practice may be treated as an unfair trade practice under the Consumer Protection Act.

Summary

• Unfair trade practice is defined under Section 2(47) of the Consumer Protection Act, 2019.
• It refers to unfair or deceptive methods used to promote the sale or supply of goods or services.
• The definition has two parts: a general definition and examples of such practices.
• The Act lists nine examples of unfair trade practices, which is more than the earlier law.
• The list is illustrative, meaning other similar practices may also be treated as unfair trade practices.
• The purpose of this provision is to protect consumers from misleading and dishonest business practices.