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Consume to perish?

autos Updated: Mar 05, 2010 01:14 IST
Kamayani Singh
Kamayani Singh
Hindustan Times
Highlight Story

Last month Maruti Suzuki decided to recall one hundred thousand units of its A-Star cars to fix faulty fuel tanks. It turned out to be one of the biggest recalls in Indian history.

Earlier, Toyota recalled more than 8.5 million cars mostly in the US to fix gas pedals that allegedly resulted in 34 deaths in the US. Honda, too, decided to recall more than 400,000 cars from all over the world – including 8,500 from India – to mend faulty airbags.

While product recalls is a common occurrence in the US, it’s somewhat unique in India. Indians became part of a large-scale product recall, perhaps for the first time in 2007, when Nokia decided to take back 46 million of its cell phone batteries globally.

Although the reasons behind every recall are different, if a company decides to recall products even before the consumer discovers a defect – as in the case of Maruti’s A-Star cars – it goes to show how businesses are becoming conscious of their image and trustworthiness.

“The Indian consumer, who may have lived with minor defects a couple of decades ago, is more aware and demanding now,” said Santosh Sood, a Delhi-based independent brand consultant.

Legal support

In recent years, consumer courts across India have been flooded with complaints. Government campaigns, such as Jaago Grahak Jaago, have also helped increase consumer rights awareness.

But most cases take years to be settled and the consumer ends up spending more money on legal processes than the compensation he applied for.

Consumer courts came up in India after the Consumer Protection Act of 1986 was enforced. At least 33 lakh cases have since been filed in different district and state consumer courts and the National Consumer Disputes Redressal Commission. Although 29.5 lakh cases have been settled so far, the time they take keeps getting longer.

“The number of cases getting filed in consumer courts was negligible in the 1990s, but it has increased in the last few years,” said Nitin Saxena, a Delhi-based consumer activist.

The district consumer commissions in Delhi receive on average 150 complaints a week and the state consumer commission gets 15 complaints a day. But in most years, only one-fifth of the cases end up seeing the light of day.

Although the Consumer Protection Act stipulates that each case must be settled in 90 days, most cases take between one year and four years to be settled.

“When I filed the case, I had no idea about how consumer courts work. The government needs to create more awareness regarding this,” said Rajesh Yadav, who filed a complaint against ICICI Bank in 2006 and won the case.

He said, “Although my case took a year to get settled, most take three-four years. The courts must get equipped to process more cases.”

No real power

Bejon Misra, chairman, cell for consumer education and advocacy, an organization that works for consumer rights, however, said the Indian consumer had no real power. “While companies impose heavy penalties for late payment, there is no penalty if the company fails to address a complaint.”
He said the consumer would not have to go to the court so often if companies take the lead in addressing most complaints internally.

Experts say maximum number of cases in the consumer courts is against banking, telecommunication and insurance companies.

An official of telecom service provider Airtel said on condition of anonymity that the company “has taken steps to empower customers… These measures help deal with complaints effectively”.

But Misra said, “There need to be greater monitoring by the government and its regulatory bodies. The RBI (Reserve Bank of India) and the TRAI (Telecom Regulatory Authority of India) should be given the power to probe if there are a high number of consumer complaints in the banking or telecom space.”

In November 2007, the Delhi State Consumer Disputes Redressal Commission slapped a fine of Rs 55 lakh on ICICI Bank for using recovery agents to beat up the owner of a car who had defaulted on his car loan. The agents had not bothered to confirm the identity of the owner and ended up beating up a wrong person, who was hospitalized for two weeks.

“From what I know, ICICI Bank has challenged the order and the complainant still hasn’t been compensated,” said Misra.

In the US, government bodies, such as Consumer Product Safety Commission and National Highway Traffic Safety Administration, maintain online databanks on products that have been recalled. Their websites help the consumer make an informed decision and register complaints.

As the recall by Maruti Suzuki made headlines at home, Sood said, “The consumer may forgive Maruti this time, as it took the initiative to admit the fault.”

But he said, “As confidence in a company grows, the consumer becomes less forgiving with every subsequent mistake.”