Financial Investments
LIMITED SCOPE. The Consumer Protection Act, 2019 applies to goods and services
purchased for consideration.
However, investments in stocks, mutual funds, cryptocurrencies, real estate, etc., are
generally not covered under CPA 2019 because:
Key Points:
1. Investments Are Not "Goods" or "Services" Under CPA 2019
• Section 2(7) – "Goods": Investments like stocks, bonds, and mutual funds are not
physical goods but financial instruments.
• Section 2(42) – "Service": Investments are not services in the traditional sense;
they are subject to market risks and do not guarantee returns.
• Hence, losses due to market fluctuations are not covered under CPA 2019.
2. When Can Investors Seek Protection Under Consumer Protection Act, 2019?
Even though investments themselves are not covered, investment-related services
can be challenged if they involve:
A. Deficiency in Service
If a financial service provider (banks, brokers, investment advisors, mutual
fund agents) fails to deliver promised services (e.g., unauthorized
transactions, failure to execute orders).
B. Misrepresentation & Unfair Trade Practices
• False promises of guaranteed returns.
• Mis-selling of financial products
• Hidden charges or misleading terms in financial contracts.
C. Banking & Insurance Services
• Fraudulent investment schemes promoted
• Non-settlement of insurance claims related to investments.
3. Where to File a Complaint?
If the issue involves fraud or misrepresentation in investment services, you can file a
consumer complaint:
• District Consumer Commission
• State Consumer Commission
• National Consumer Commission
For stock market fraud or investment scams, approach:
• SEBI (Securities and Exchange Board of India) for stock market-related issues.
• RBI (Reserve Bank of India) for banking frauds related to investments.
• Insurance Regulatory and Development Authority (IRDAI) for insurance-
related investment issues.
