Compensation
Topic: Consumer Rights and Consumer Protection · NCERT: Class 10, Ch 5 "Consumer Rights"
Meaning
Compensation is money that a consumer commission orders a seller or service provider to pay to a wronged consumer. The amount depends on the degree of damage, meaning how much harm was done. It can cover the loss itself and also mental agony, harassment and litigation costs (the cost of fighting the case). Compensation is how the right to seek redressal works in practice. It also shows that a small loss is still worth taking to a commission.
Example
Jayashree Pillai, a Delhi University teacher, disputed a phone bill of ₹400 with Tata Teleservices. The consumer court awarded her ₹45,000. This was ₹40,000 for mental agony and harassment plus ₹5,000 for costs.
Don't confuse with
- Penalty: compensation goes to the consumer who was harmed. A penalty, such as a CCPA fine for a misleading advertisement, is a punishment paid to the state.