IAS COACHING CENTRES PROBED BY CCPA
1. Context
Recently, the Central Consumer Protection Authority (CCPA) announced an investigation into 20 IAS coaching institutes for making misleading claims in their advertisements and engaging in unfair trade practices. Four of the institutes have already been fined Rs 1 lakh each.
2. CCPA observations
- Following the release of results for competitive exams, such as the UPSC Civil Services, coaching institutes often engage in an advertising blitz.
- They utilize the names and images of top rankers to imply that these individuals were enrolled in their courses.
- However, this is often not the case. In many instances, the top rankers only took mock interviews from the institutes.
- The CCPA has observed that the coaching institutes are deliberately concealing important information about the nature of the top rankers' enrolments.
- This information, such as whether they enrolled in a test series, a learning course, or a revision course, should be clearly disclosed in the advertisements.
- Failure to do so constitutes a violation of Section 2(28) of the Consumer Protection Act, 2019.
- First-time violations of the act can result in penalties of up to Rs 10 lakh. Subsequent violations may attract penalties of up to Rs 50 lakh, along with potential legal action.
3. Ecosystem of UPSC coaching
- UPSC recommended a total of 933 candidates post its CSE examinations in 2022.
- However, as observed by CCPA, the total selections claimed by the institutes being
probed exceeded the recommendations significantly the cumulative count was over
3,500. This could also be because of multiple enrolments among students. - At present, four institutes have been fined Chahal Academy, IQRA IAS, Rau’s IAS
Study Circle and IAS Baba. - While IAS Baba has received a stay on the probe from the Karnataka High Court, Rau’s IAS has appealed against the order in the National Consumer Disputes Redressal Commission (NCRDC).
- Other coaching institutes currently being probed include Vajirao and Reddy Institute, KSG- Khan Study Group IAS, Drishti IAS, Sriram IAS, NEXT IAS and Vision IAS, Unacademy, Byjus, Analog IAS, Shankar IAS Academy and others.
- During the probe, the institutes were allowed to make their submissions against the allegations of exaggerated claims.
- Their submissions reveal some of the same concerns raised by the CCPA. For example, Khan Study Group claimed that 682 of the 933 selected belonged to their institute.
- However, their submission indicated that 673 students took mock interviews, and 9 students were enrolled in test series and general studies programmes.
- Vajirao and Reddy also professed about 617 selections all of whom took the interview guidance programme.
- Drishti IAS claimed more than 216 selections in their interviews. All of them had taken the interview guidance and mentorship programme.
4. Size and Growth of the Coaching Class Market in India
- Education has become one of the most violated sectors in advertising, with over 3,300 education ads, including those by coaching classes, being processed by the self-regulatory body in the past two years.
- Most violations involve claims of leadership, placement in top colleges, and success guarantees.
- Misleading ads in this category exacerbate the problem and target vulnerable students and parents.
- The coaching class market in India is expected to reach Rs 1.79 lakh crore by 2030, growing at a CAGR of 14.07% from 2023 to 2030.
- Higher education holds the largest market share, accounting for 32.75% in 2022, which is expected to increase to 34.75% over the forecast period.
Factors contributing to the growth and expansion of the coaching classes industry in India:
- Intense competition in the education sector, particularly for entrance and board examinations
- Students and parents turning to coaching classes to gain a competitive edge and improve academic performance
- Early initiation of coaching, typically from 10 years of age, which continues for up to two decades
Delhi is considered the hub of UPSC CSE coaching, while Kota attracts approximately two lakh students annually for IIT-JEE coaching. The demand for associated services, such as rented accommodation and local tiffin services, has increased due to the migration of students to coaching centres. This has led to a surge in demand for rented accommodation, creating a thriving real estate market in these areas.
5. About The Central Consumer Protection Authority
- It is constituted under Section 10(1) of The Consumer Protection Act, 2019.
- It replaces the previous Consumer Protection Act of 1986.
- It aims to address consumer concerns and protect consumer rights and Targets unfair trade practices and false/misleading advertisements.
5.1. Powers of the CCPA
- It is an Authority to investigate violations of consumer rights and unfair trade practices.
- it can initiate investigations suo motu, based on complaints or directives from the central government.
- Ministry of Consumer Affairs, Food, and Public Distribution finalizing rules for CCPA's composition and functioning.
5.2. Structure of the CCPA
- It is a lean body with a Chief Commissioner as the head and Two other commissioners, one responsible for goods and the other for services.
- It is Headquartered in the National Capital Region of Delhi, with the possibility of regional offices.
5.3. Dealing with Dangerous, Hazardous, or Unsafe Goods
- The specific classification of such goods is not mentioned in the Act.
- CCPA ensures adherence to standards set by regulators like the Food Safety and Standards Authority of India (FSSAI).
5.4. Actions against Non-compliant Goods or Services
Under Section 20 of The Consumer Protection Act, CCPA has the power to:
- Recall goods or withdraw services deemed dangerous, hazardous, or unsafe.
- Order refunds for purchasers of recalled goods or services.
- Discontinue unfair practices prejudicial to consumer interests.
5.5. Penalties for Adulterated Products
Penalties vary based on the harm caused:
- No consumer injury: Fine of up to Rs 1 lakh with imprisonment of up to six months.
- Injury caused: Fine of up to Rs 3 lakh with imprisonment of up to one year.
- Grievous hurt caused: Fine of up to Rs 5 lakh with imprisonment of up to 7 years.
- Death caused: Fine of Rs 10 lakh or more with a minimum imprisonment of 7 years, extendable to life imprisonment.
5.6. Addressing False or Misleading Advertisements
- Section 21 of the Act empowers CCPA to take action against such advertisements.
- CCPA can issue directions to discontinue or modify misleading ads.
- Penalties for manufacturers or endorsers range from fines up to Rs 10 lakh and imprisonment of up to two years.
- Subsequent offences can lead to higher penalties of up to Rs 50 lakh and imprisonment of up to five years.
- CCPA may ban endorsers from making endorsements for up to one year, extending to three years for subsequent violations.
5.7. Additional Powers of the CCPA
- Investigation Wing headed by a Director General.
- Officers can conduct preliminary inquiries, enter premises, and seize relevant documents or articles.
- CCPA can file complaints before Consumer Disputes Redressal Commissions.
- Issuance of safety notices to alert consumers against dangerous or unsafe goods/services.
6. The Way Forward
The investigation into IAS coaching centres by CCPA sheds light on the need for transparency in the education sector, emphasizing the importance of accurate and honest advertising. Addressing misleading practices is crucial for ensuring fair competition and protecting the interests of students and parents.
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For Prelims: UPSC, Coaching Institutes, Central Consumer Protection Authority, consumer rights, unfair trade, consumer Disputes Redressal Commissions, The Consumer Protection Act, 2019, Consumer Protection Act of 1986, Ministry of Consumer Affairs,
For Mains:
1. Evaluate the implications of coaching institutes engaging in unfair trade practices and making exaggerated claims on the aspirations of students and parents. (250 Words)
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Previous Year Questions
1. With reference to consumer's rights/privileges under the provisions of the law in India, which of the following statements is/are correct? (UPSC 2012)
1. Consumers are empowered to take samples for food testing.
2. When a consumer files a complaint in any consumer forum, no fee is required to be paid.
3. In case of the death of a consumer, his/her legal heir can file a complaint in the consumer forum on his/her behalf.
Select the correct answer using the codes given below:
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: C
2. With reference to the Consumer Disputes Redressal at district level in India, which one of the following statements is not correct? (UPSC 2010)
A. A State Government can establish more than one District Forum in a district if it deems fit B. One of the members of the District Forum shall be a woman
C. The District Forum entertains the complaints where the value of goods or services does not exceed rupees fifty lakhs
D. A complaint in relation to any goods sold or any service provided may be filed with a District Forum by the State Government as a representative of the interests of the consumers in general
Answer: C 3. Provisions of the Consumer Protection Act, 2019 has come into force since ________. (SSC MTS 2021)
A. 12 March 2020 B. 23 June 2020 C. 30 April 2020 D. 20 July 2020
Answer: D
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Source: The Hindu
