Unfair Trade Practice is defined by Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act), as
“A trade practice, which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any services adopts any unfair method or unfair or deceptive practice including oral, written or visible misrepresentations regarding standard, quality, status, condition usefulness and price of goods or services; false warranty, guarantee or promise regarding goods or services; disparaging of goods and services of another person; and false advertising and misrepresenting with regard to the gifts, prizes and offers in sale, etc.”
Any commercial activity or behaviour that is dishonest, fraudulent, or causes damage to a customer and is unethical in nature, then such a practice is considered as an unfair trade practice. Acts that are regarded as illegal, such as those that violate a consumer protection statute, might also be included in these practices.
What constitutes an Unfair Trade Practice?
Well, unfair practices can be categorized into five broad categories which are stated below:-
- False Representation:-
- When a business falsely claims that the items are of a certain quality, quantity, grade, composition, style, or model when they are not;
- Makes a misleading claim or insinuation that re-built, second-hand refurbished, reconditioned, or outdated products are new;
- Make the claim that the company’s goods or services have sponsorship, approval, performance, traits, accessories, uses, or benefits that they don’t;
- Falsely claims that the vendor or provider has a sponsorship, permission, or affiliation that he does not;
- Making a misleading representation to customers about the necessity for, or producing a false representation about the efficacy of, any products or services;
- Gives any promise or assurance about the items’ performance, effectiveness, or life span that isn’t based on a sufficient or suitable test;
- Makes a representation to the public that pretends to be:
- a warranty or guarantee of the products or services,
- a commitment to replace, maintain, or repair the items until a specific outcome has been accomplished,
- if the representation is materially false or if there is no reasonable expectation that the warranty, guarantee, or promise would be kept
- Materially misleads regarding the market prices for such products or services;
- Provides false or misleading information denigrating another person’s goods, services, or trade.
2. False Offer of Bargain Price:-
It is unfair commercial conduct if an advertisement is published in a newspaper or elsewhere offering products or services at a discount price when there is no intention of offering them at that price for a reasonable period or in a reasonable quantity.
3. Free Gifts Offer and Prize Schemes:-
The following are examples of unfair trade practises that fall within this category:
- Offering any presents, prizes, or other items in addition to the products when the true intention is different, or
- Giving the appearance that something is being supplied free in addition to the goods when the price is entirely or partially covered by the price of the article sold, or
- Offering rewards to purchasers through a contest, lottery, or game of chance or skill, with the genuine goal of increasing sales or company.
4. Non – Compliance with Prescribed Standards
Any sale or supply of goods for consumer use knowing or having reason to believe that the goods do not meet the standards prescribed by some competent authority in relation to their performance, composition, contents, design, construction, finishing, or packing, as are necessary to prevent or reduce the risk of injury to the person using the goods, constitutes an unfair trade practice.
5. Hoarding, Destruction, Etc.
Hoarding is when a speculator buys and stores enormous amounts of a product in the hopes of profiting from future price increases. Buying commodities, particularly gold, is commonly referred to as hoarding. Unfair trading practises include any conduct that allows for the hoarding or destruction of products, or the refusal to sell or deliver services in order to raise the price of those or other similar items or services.
References:-
Aishwarya Says:
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
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In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.