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Is Consumer Really King?

Monday, January 12, 2015

Consumers across the country continue to be taken for a ride. Often shortchanged, and not much help from the law, businesses including big brands take the buyer for granted. Here its all about marketing; nothing or very little of a service called 'After sales'. And till such time businesses up their ethics bar, the 'Make in India' ambition will falter as will falter the credibility of Indian products. Mayura Shanbaug looks into the present state of affairs on the consumer grievances front...

A Consumer, according to the Oxford Dictionary is a person who purchases goods and services for personal use and according to the principle's of marketing, is termed as a king. But in today's world of complex retailing and e-tailing, both the definition and the marketing principle do not pass the test. Yes, a consumer is a purchaser, but not at all made to feel like a king. Rather today's consumer is rendered frustrated and helpless with the raw deal he gets. And our laws lack on many fronts...

A look at some of the cases which were addressed by the Consumer Guidance Society of India (CGSI) from a cross section of the sectors and were
fortunate enough to get  their problems  redressed highlight some disturbing facts…It is that a consumer in most cases can only get his grievance addressed if a third party intervenes. The case studies below throw more light...

-Ajay Sahani (name changed), a consumer bought a refrigerator form Whirlpool through Croma Stores located at Malad-West in 2012; he started facing problems in the equipment since December 2013 which continued for till August 2014. When he approached the Whirlpool outlet, his complaint was juggled from one serviceman to another, all giving contradictory suggestions. The consumer was mentally exhausted by this vicious cycle and approached CGSI. With CGSI’s intervention the equipment was repaired in December 2014 without any service charges as the refrigerator was still in the warranty period.

-In another case ,on 9th May 2014, the consumer withdrew an amount of Rupees 500 from the ICICI Bank ATM at Kandarpada, Mumbai. To her surprise her ICICI Bank account was debited by Rupees 20,000. After approaching the ICICI Bank I.C. Colony Branch manager, her complaint was not given due attention. She later filed an F.I.R regarding the same at the nearest police station and  along with this she approached CGSI regarding the same. With CGSI’s intervention the problem was resolved and the consumer received the wrongly debited amount of Rupees 20,000 in her account on 3rd November 2014.

-In a case from auto industry, a consumer had booked a new car “Honda City” vide sales contract dated 24.10.2012. An initial booking amount of Rs 51,000  and total payment was Rs 9.35 lakhs towards the vehicle insurance and accessories along with registration charges; further amount of Rs. 8,940/- was made towards NMMC cess. On taking delivery the consumer noticed that there was a discrepancy and difference in the price in the sales order which amounted to Rs. 37,896/- ; which is tantamount to overcharging by “Hallmark Automative Pvt Ltd”. Besides this the consumer noted that the car delivered was lying idle in the stocks for more than 6 months i.e. the car manufactured in May 2012 was sold in November 2012, leading to many performance problems by the car for the consumer. The consumer repeatedly took up the matter via emails to the customer relationship manager of Hallmark Honda and did not receive any response. The customer had also indicated to Hallmark Honda that, this was his 3rd car of the same model as he had been extremely happy with the performance of the earlier ones. He approached CGSI regarding his grievance; with CGSI’s intervention Hallmark Honda addressed the issues – By a credit note worth Rs.25000/- settled the matter of overcharging; Hallmark Honda also agreed to check the car thoroughly to ensure its performance was as good as new.

-In another case from the real estate sector, a consumer had paid Rs 300000 to P.S.Arcade to buy 1BHK apartment @ Titwala. The Total amount being Rs 6,50,000. The 1st installment was paid on 6/4/2014 amount being Rs 50,000; 2nd Installment was paid on 4/5/2014 amount being Rs 50,000 ;  and 3rd Installment paid on 19/05/2014 amount being Rs 200000/-, this was considered as booking amount. On being asked to pay Rs 200000  as unaccounted cash funds and also the 1BHK was now converted to 1RK by the Builder, the consumer backed out from the deal. To make matters worse the builder refused to sign a proper registered and stamp duty paid agreement. With CGSI sending a letter to the builder, the consumer‘s problem was solved. The total amount of Rs 3 lakhs was paid-back to the consumer by the builder.

These are some fortunate few who got their problems solved, but there are thousands who are still running from pillar to post to get their grievances heard by the authorities...some pursue with the help of agencies like CGSI ...most give up exhausted due to lack of awareness. “The awareness is slowly spreading. We get complaints not only from Mumbai, Maharashtra but Pan-India,” says Anindita Lahiri Kovoor, Consumer Activist working with CGSI.

As per statistics by CGSI, In September 2014, CGSI alone received 2052 complains from places as interior as Divapor, Narkhed, Ramtek, Mahur,and Tuljapur. In October 2014, they received 1899 complaints which are genuine and the process of redressal is on. In the month of November 2014,CGSI had 1770 harassed consumers complaining to them. “The top three sectors we receive complaints from are telecom, automotive and real estate, followed by home appliances and banking,” points out Lahiri -Kovoor.

“The new sectors that have cropped with complaints are Travel & Tourism and E-commerce,” she says. According to officials at CGSI, e-commerce complains have thickened form April last year with all the e-tailers going in overdrive to attract customers.

R.B. Bivalkar, MD, E-Maya, Social Commerce ltd says  that the consumer should always check the refund and return policy before purchase. “ Check the shipping policy as well , whether the goods will be sent to you with or without shipping charges,” he says. “During sales the etailers often change their return and refund policy from the regular days, one should be aware of the fact ,” he adds.

Dr M.S Kamath, Secretary, CGSI  feels that government should appoint an Advertising Regulatory Authority of India to govern against misleading advertisements. “O.5% of the companies profit should be kept aside to address the grievances of their consumers as a CSR activity.”Citing their research, Kamath says, the fairness cream market in India is around Rs 35,000 crore. 60% of women in India use fairness creams and 16% of them have complaints of adverse reactions. … “still the companies continue to mint profits year after year,” he says.

Advertising Standards Council of India (ASCI) which was  established in 1985, is committed to the cause of Self-Regulation in Advertising, ensuring the protection of the interests of consumers. Last week itself ASCI upheld complaints against 113 misleading ads by companies such as HUL, Godrej, Philips, Snapdeal, Bajaj Allianz, Nissan Motor India and Coca Cola.

According to the Customer Complaints Council (CCC) of ASCI (Advertising Standard Council of India), it received 144 complaints during November and a maximum of 61 complaints of misleading ads were upheld from the personal and healthcare category. The council concluded that FMCG major Hindustan Unilever Ltd's advertisement of Lifebuoy violated its code. HUL's claims that the soap provides "10 x more germ protection" and "10 x more skin care" than any other brand was "not substantiated", it said.

It also upheld a case against Godrej's Goodknight, which shows "a child standing near the mosquito vapouriser", whereas the product’s leaflet includes a precaution that the electrical liquid vaporising machine should be kept away from the reach of children."The advertisement features a dangerous practice, manifests a disregard for safety and encourages negligence," said ASCI.

Online retailer Snapdeal.Com, which had advertised on October 6 promising heavy discounts was also pulled up by ASCI stating "while purchasing the products these products were not available and were sold out or the rates were higher while clicking the buy button".

It added: "The claim of 'Snapdeal bachaey raho discount offer' was false and was not substantiated."

The advertising regulator also pulled up Japanese auto major Nissan for "misleading by ambiguity" as an advertisement of Datsun Go that claimed of "Rs 4000 insurance support", was not substantiated. The ASCI also upheld a complaint against radio advertisement of Coca Cola as the mandatory audio, "Coca Cola states that it contains no fruit juice, etc" was "played too fast and was not comprehensible" and contravened ASCI Guidelines. It also pulled up Philips Electronics for an advertisement of Philips Kerashine Styling Kit, which shows a girl on the rear seat of a car standing up while the vehicle is moving on the road."This advertisement encourages a dangerous practice and manifests a disregard for safety and is in violation of the traffic rules," it said.

To make the law more effective many have suggested that there should be a provision for making online complaints to the councils or  Consumer Disputes Redressal Commission . The matter should be solved in absentia of the complainant or facility of video conferencing should be made available for the consumers to save their time ,efforts and cost. But as Justice R. C. Chavan, President of Maharashtra State Consumer Disputes Redressal Commission said at a function on National Consumer Day, “ You will get a quick justice from the redressal commission, this statement itself is a misleading ad.” Because the truth is, there are thousands of cases pending at the commission to be heard and lakhs of harassed consumers to be pacified.

Protection By Law.....
The sole weapon available with the Indian consumer presently has its basis in just one act, it is called Consumer Protection Act, 1986. It is an Act of the Parliament of India enacted in 1986 to protect interests of consumers in India. It makes provision for the establishment of consumer councils and other authorities for the settlement of consumers' disputes and for matters connected therewith.

Consumer Protection Councils are established at the national, state and district level to increase consumer awareness. The Central Consumer Protection Council &State Consumer Protection Council

The objectives of the Central & State Councils are to promote and protect the rights of the consumers such as:-

  • the right to be protected against the marketing of goods and services which are hazardous to life and property.
  • the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices.
  • the right to be assured, wherever possible, access to a variety of goods and services at competitive prices.
  • the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums.
  • the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and
  • the right to consumer education.the right against consumer exploitation.

There are various Consumer Disputes Redressal Agencies

  • District Consumer Disputes Redressal Forum (DCDRF): Also known as the "District Forum" established by the State Government in each district of the State. The State Government may establish more than one District Forum in a district. It is a district level court that deals with cases valuing up to 2 million
  • State Consumer Disputes Redressal Commission (SCDRC): Also known as the "State Commission" established by the State Government in the State. It is a state level court that takes up cases valuing less than 10 million
  • National Consumer Disputes Redressal Commission (NCDRC): Established by the Central Government. It is a national level court that works for the whole country and deals with amount more than 10 million
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