Navigating Unfair Trade Practices: A Guide for Consumers

You see a fairness cream ad on television promising visible results in seven days, endorsed by a popular celebrity. You buy it, use it for a month, and nothing changes. Or you order a branded smartphone on an e-commerce platform, and what arrives is clearly a counterfeit. These aren’t just frustrating experiences – they are unfair trade practices, and Indian law has something to say about each one of them. Understanding what qualifies as an unfair trade practice, how these practices work in the real world, and what legal tools you have as a consumer is essential knowledge – especially in a market as large and complex as India’s.

What are unfair trade practices? 🔗

Section 2(47) of the Consumer Protection Act, 2019 defines “unfair trade practice” as any trade practice that, for the purpose of promoting the sale, use, or supply of goods or services, adopts an unfair method or deceptive practice. The definition is intentionally broad. It covers everything from making false statements about a product’s quality, grade, or composition, to falsely representing old or refurbished goods as new, to claiming a product has benefits or endorsements it simply does not have.

Compared to the older Consumer Protection Act of 1986, the 2019 Act significantly expanded this definition. It now explicitly includes online misleading advertisements, spurious goods, failure to issue proper bills, refusal to honour refund or replacement obligations, and even the unauthorized disclosure of a consumer’s personal information to third parties – a provision that reflects the realities of the digital age.

Common types of unfair trade practices 🔗

Misleading advertisements 🔗

This is perhaps the most visible form of unfair trade practice. Under Section 2(28) of the Consumer Protection Act, 2019, a “misleading advertisement” includes any ad that falsely describes a product or service, gives false guarantees, deliberately conceals important information, or conveys a representation that would amount to an unfair trade practice if made directly by the seller. A classic example: a dietary supplement claiming to cure diabetes without any clinical backing, or a real estate developer advertising sea-view apartments that are actually landlocked.

To directly address this problem, the Central Consumer Protection Authority (CCPA) issued the Guidelines for Prevention of Misleading Advertisements and Endorsements, 2022 on June 9, 2022. These guidelines apply to all advertisements across print, television, radio, and digital platforms. They prohibit unsubstantiated claims, exaggerated promises, surrogate advertising (for example, using a music CD brand to indirectly advertise an alcohol product), and bait advertisements – ads that lure consumers with prices so low that the advertiser has no real intention of selling at that price. Endorsers too are now held accountable: they must genuinely believe in and have experience with the products they promote, and any financial or material relationship with the brand must be clearly disclosed to audiences.

False product information and misrepresentation 🔗

Beyond advertising, sellers often misrepresent the product itself. This includes passing off second-hand, rebuilt, or reconditioned goods as new, falsely claiming a product meets certain quality standards, or asserting affiliations with reputed organizations that don’t actually exist. A well-known early case involved a battery manufacturer falsely claiming in its advertisements that its products were manufactured in collaboration with a Japanese firm – a misrepresentation that led consumers to believe they were buying a globally certified product when they weren’t.

Manipulative pricing is another form. Artificially inflating the “original” price of a product just before a sale – so the “discount” looks more dramatic than it is – is a deceptive pricing strategy that falls squarely within the definition of unfair trade practices under the Act.

Deceptive practices in online transactions 🔗

E-commerce has brought with it a new set of consumer vulnerabilities. Counterfeit products, fake reviews, undisclosed paid promotions, hidden charges, and opaque return policies have become widespread concerns. To address this, the government introduced the Consumer Protection (E-Commerce) Rules, 2020, framed under the Consumer Protection Act, 2019.

These rules impose significant obligations on online platforms. E-commerce entities must disclose complete seller information, country of origin of goods, return and refund policies, and must not manipulate search results or product listings to mislead consumers. Fake reviews posted by sellers pretending to be buyers are explicitly prohibited. Platforms cannot automatically record consumer consent through pre-ticked checkboxes, and they cannot impose cancellation charges on consumers unless the platform itself incurs similar costs. A grievance officer must be appointed, with complaints to be acknowledged within 48 hours and resolved within one month.

These rules apply not just to Indian e-commerce companies, but also to foreign entities that systematically offer goods or services to consumers in India – closing a significant regulatory gap that previously allowed overseas platforms to operate with lower accountability.

The legal framework: who protects you? 🔗

Central Consumer Protection Authority (CCPA) 🔗

The CCPA was established in July 2020 under the Consumer Protection Act, 2019 as an executive regulatory body with a specific mandate to address unfair trade practices and misleading advertisements at the class level – meaning it steps in when a practice harms consumers broadly, not just one individual. It can conduct investigations, issue orders for product recalls, mandate refunds, and initiate class action proceedings. The CCPA has already issued over 325 notices for violations and imposed penalties totalling over ₹1.19 crore. Under the Act, a person found guilty of publishing a misleading advertisement can be fined up to ₹10 lakh for a first offence, and up to ₹50 lakh for repeat violations. Endorsers can be barred from making any endorsements for up to one year, extendable to three years for persistent offenders.

Consumer Disputes Redressal Commissions (CDRCs) 🔗

For individual grievances, the Act establishes a three-tier commission system. The District Commission handles disputes up to ₹1 crore, the State Commission covers claims between ₹1 crore and ₹10 crore, and the National Commission (NCDRC) deals with cases above ₹10 crore. Consumers can now file complaints electronically, and the Act specifically prohibits routine adjournments – meaning cases must move forward without unnecessary delays. Mediation is also available as an alternative to formal adjudication, with consumer mediation cells attached to each level of the commission.

Remedies available through these commissions include compensation for loss or injury, refund of the purchase price, product replacement, and in cases of gross negligence, punitive damages. The NCDRC, for instance, in a notable case involving double allotment of a flat by a real estate developer, directed a refund of ₹3 crore along with interest – clearly establishing that unfair practices in high-value transactions will not be treated lightly.

How consumers can protect themselves 🔗

Legal frameworks work best when consumers actively use them. Here’s what you can do in practice:

Scrutinize promotional claims. If an advertisement promises results that seem too good to be true – particularly in sectors like healthcare, cosmetics, education, and financial products – treat the claims with skepticism. The CCPA’s 2022 guidelines require all factual claims to be substantiated, so if a brand cannot back its claims with evidence, the advertisement itself may be illegal.

Verify products before and after purchase. For online purchases, check seller ratings, read recent reviews critically (a suspiciously uniform pattern of five-star reviews can signal fake reviews), verify the country of origin, and ensure the return and refund policy is clearly stated before placing your order. E-commerce platforms are legally required to display all of this information prominently.

Insist on bills and receipts. Not issuing a bill or receipt for goods sold is itself classified as an unfair trade practice under the 2019 Act. A proper bill is also your primary document if you need to file a complaint later.

Know where to complain. Individual complaints against sellers or service providers can be registered through the National Consumer Helpline (NCH) or through the e-Daakhil portal for online filing with consumer commissions. For class-wide violations – where many consumers are being harmed by the same practice – a complaint to the CCPA is the appropriate route.

Why consumer literacy matters 🔗

The existence of strong laws is only one part of the equation. The Consumer Protection Act, 2019 and the E-Commerce Rules, 2020 represent a significant upgrade in India’s consumer protection architecture – but enforcement depends on consumers being aware of their rights and willing to exercise them. The government’s “Jago Grahak Jago” multimedia campaign is an effort in this direction, but individual legal literacy remains critical. A consumer who understands what constitutes an unfair trade practice, knows which authority to approach, and keeps necessary documentation is far better positioned to seek and obtain justice than one who simply accepts the loss.

Consumer advocacy organizations also play an important role – filing complaints on behalf of groups of consumers, lobbying for stronger enforcement, and educating the public about their rights. In a market where sellers increasingly reach consumers through algorithm-driven digital platforms, consumer education is not optional; it is a form of self-defence.

What do you think? With influencer marketing and sponsored content becoming harder to distinguish from genuine recommendations, do you think the current legal framework is strong enough to hold digital endorsers accountable? And as a consumer, do you feel confident enough in your rights to actually file a complaint the next time you encounter a deceptive product or misleading advertisement?

References

1. https://indiankanoon.org/doc/117738049/
2. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2085748&reg=3&lang=2
3. https://consumeraffairs.nic.in/theconsumerprotection/guidelines-prevention-misleading-advertisements-and-endorsements-misleading
4. https://www.mondaq.com/india/social-media/1312524/ccpa-guidelines-for-misleading-advertisements-and-endorsements-2022
5. https://lawfullegal.in/unfair-trade-practices-in-india-under-consumer-protection-act-2019-introduction-definition-examples-remedies-and-cases/
6. https://consumeraffairs.nic.in/theconsumerprotection/consumer-protection-e-commerce-rules-2020
7. https://www.acmlegal.org/blog/consumer-protection-e-commerce-rules-2020/
8. https://doca.gov.in/ccpa/
9. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1832906
10. https://www.taxtmi.com/article/detailed?id=13771
11. https://www.indialaw.in/blog/civil/consumer-protection-e-commerce-rules-2020/
12. https://consumerhelpline.gov.in/
13. https://pmc.ncbi.nlm.nih.gov/articles/PMC8267237/