Misrepresentation

Misrepresentation involves a false statement made to a policyholder about a policy to induce the policyholder to lapse, cancel, or surrender an existing policy.

Churning is the practice of an insurer replacing existing coverage with a new policy based on misrepresentations.

Acts or practices that may be deceptive include: making misleading cost or price claims; offering to provide a product or service that is not in fact available; using bait-and-switch techniques; omitting material limitations or conditions from an offer; or failing to provide the promised services.

About unfair trading By law, businesses have a general duty to trade fairly. A trader is likely to be breaking the law and trading unfairly if: they make misleading statements, such as falsely telling you that your boiler needs replaced when it doesn’t.

Unfair trade practices in insurance An act by an insurance company is considered an unfair trade practice if it misrepresents or falsely advertises an insurance policy. Some examples of unfair trade practices include: Misrepresenting the benefits, advantages, conditions or terms of any policy.

• (i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
• (ii) falsely represents that the services are of a particular standard, quality or grade;
• (iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

Why is price fixing considered an unfair trade practice? Price fixing eliminates competition. The product’s quality gets worse and the price increases. -Agreements to control or fix prices which reduces competition and leads to higher prices for consumers.

Six consumer rights

Consumers are protected by the Consumer Bill of Rights. The bill states that consumers have the right to be informed, the right to choose, the right to safety, the right to be heard, the right to have problems corrected, the right to consumer education, and the right to service.

Under the new Act, “consumer” is defined as a person who “buys any goods” and “hires or avails of any service” for consideration but does not include a person who obtains goods for resale or goods or service for any commercial purpose.

Consumer Protection Act, 2019 comes into force from today, covers e-commerce too. The Consumer Protection Act,2019 comes in to force from 20 July, with its salient features including the establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.

On July 20th, 2020, the new Consumer Protection Act, 2019 came into force in India, replacing the previous enactment of 1986. The new Act overhauls the administration and settlement of consumer disputes in India. It provides for strict penalties, including jail terms for adulteration and for misleading advertisements.

Failing to understand current consumer legislation could lead to a breach of your customer’s consumer rights. Failing to do so could entitle the customer to cancel – up to 12 months and 14 days after signing the contract – even if your contractual obligations have been performed.