The need of consumer protection is explained as follows:

(1) Need of participation of consumers : It is noticed that most of the organisations or manufacturing companies take certain decisions which directly or indirectly affect the consumers’ interest without consulting them or their organisations. This leads to consumer exploitation. Only a Strong consumers’ organisation can force business organisations to allow consumers to participate in the decision-making process.

(2) Lack of information : Today consumers live in a dynamic and complex world. Due to vast distance between manufacturer and consumer, it is very difficult to establish direct contact between them. Now market is fully flooded with domestic as well as foreign products due to globalisation and liberalisation. However, it is very difficult for the consumer to get correct and reliable information about the products before they are purchased. He has to rely on trial and error method or on advertisements. In both the cases chances of consumer exploitation cannot be denied.

(3) Ignorance : One of the important causes of consumer exploitation is ignorance of consumers. In India, consumers are mostly ignorant about their rights, market conditions, price levels, product details, etc. Many a time consumers are not aware that they are being cheated by the sellers. An appropriate system is required to protect consumers from business malpractices.

(4) Unorganised consumers : The consumers are widespread and unorganised. Moreover, they are not united. Hence, they are easily exploited by the producers and sellers. Sellers are in better position as compared to unorganised consumers. An individual consumer cannot fight against the powerful manufacturers or sellers.

(5) Spurious Goods : The consumers also face a major problem of duplicate goods. Some traders cheat the consumers by supplying them duplicate or defective goods of the popular brands. It is not possible for the consumers to find difference between genuine and duplicate product. It is therefore necessary to protect the consumers from such exploitation by fixing prescribed norms of quality and safety standards.

(6) Misleading advertising : Sometimes the advertisements of goods and services shown on television, in newspapers and magazines are misleading. They make tall claims about the benefits of the products but do not disclose the drawbacks. Most of the consumers are misled by the misleading advertisement and do not know the real and true quality of advertised products. Appropriate system or mechanism is required to prevent misleading advertisements.

(7) Malpractices of Businessmen : Many businessmen adopt fraudulent, unethical and monopolistic trade practices to earn more money. This leads to exploitation of consumers. Some times consumers get defective, inferior and substandard goods and services. Appropriate measures are necessary to protect the consumers against such malpractices.

(8) Trusteeship : The Gandhian philosophy states that businessmen are the trustees of the society’s wealth. So they should not misuse the society’s wealth for their own benefits. They should use the wealth of the society for the benefit of the people.