( July 17, 2008 )

Supreme Court has friendly warning for property buyers

Here is a warning right from the Supreme Court for home owners. People get attracted to the flats and houses offered by real estate builders, more so when they are offered by reputed and large builders. At the same time, the terms and conditions of the deals offered by these builders can be complex, and not easily understood by normal buyers. For example, the builder may offer a deal whereby there is a penalty clause if the handover of the property is delayed, but most consumers that I have talked to are hesitant to call up the builder on this, In many cases, they are worried that either the builder will rush through things, or maybe handover the property when everything around the property including facilities are incomplete. Hence the warning by the Supreme Court:

The Supreme Court has cautioned prospective flat buyers to look for the devil in the fine-print of documents before signing a contract with builders, who generally promise speedy construction, timely delivery and little or no escalation in price.
It said after a person signs an agreement with a builder for getting a flat in an under construction residential complex, there is little the courts can do to rescue him as he is bound by the clauses of the contract. Though it reduced the amount forfeited by a person for dropping out of the instalment payment scheme for acquiring a flat in a housing complex built by DLF, it frowned upon the practice of builders to put a clause that barred the buyer from challenging the escalation costs.

It is typically a world of buyer beware. Once you enter a contract that is not totally lopsided, then it is difficult for the courts to step in and void the terms of the contract.




( April 12, 2008 )

Delhi discom fined for bad customer behavior

Even before the privatization of power distribution in Delhi, there were plenty of complaints regarding shoddy customer behavior by the staff of the then Government electricity arm - DESU. It was expected that after the work was handed over to private companies, things would better. Some customers reported improved behavior, but there were still a large number of complaints that keep on coming in.
Consider the case of a customer who reports that the meter got burnt, but the private electricity company takes no action. Instead, much later, it accuses the customer of power theft, and hands over a whopping bill to the customer; and in the worst sort of behavior, threatens to use the powerful anti-theft bill to force the customer to make payment. It is only when the customer complained to the customer board that some positive action took place:

NEW DELHI: Pulling up BSES Yamuna for sending an unaccounted bill of Rs 1.5 lakh to a consumer, the state consumer commission has slapped a fine of Rs 50,000 on the discom and also directed it to refund the bill amount to the complainant.
Justice Kapoor said: “On receiving the complaint, the discom should restore electricity immediately and ensure that necessary action is taken at the site. The burnt meter should be removed and tested to see the cause of the fire. A new meter should be provided within three days. Thereafter, a bill based on the estimated energy consumption pattern of 6 months prior to and 6 months after the period during which meter remained defective has to be raised.”

The basic problem remains that most of these companies are not geared to handle customer problems, and tend to be behave in a way that is not suited to handle the needs of customers. This was a customer who complained, but there will be thousands others who do not know how to complain and get pushed by the strong action of these companies.




( March 24, 2008 )

Sony reverses itself over charging for removing bloatware

When you buy a new OEM machine, it comes with a lot of programs that are on trial, such as anti-virus software trial versions, and numerous other software. There are 2 advantages for the makers of these software as well as for the computer manufacturers. The software makers depend on a proportion of consumers becoming attracted enough towards these applications that they are willing to pay for buying these programs. Getting these softwares pre-installed on the machine helps expose them to a much higher number of consumers and increases the chances of conversion. For this advantage, these trial software makers pay computer manufacturers for the chance of placing their software on these machines. It is estimated that xomputer manufacturers can make more than $50 per machine from such software.
For a vast majority of the final consumers / buyers of the machine, these software consume hard disk space, as well as run all the time slowing the machine down. Most consumers will not know how to remove such software, and suffer. For an advanced user, the options include removing the programs one by one, or by doing a fresh install on the machine that will remove these software, called ‘bloatware’. So, imagine the pleasure of consumers when Sony declared that it will give a machine that does not come pre-loaded with such software; then this pleasure turned to shock when they found out that Sony will charge them $49.99 for removing this bloatware. There was a strong reaction to such a move; imagine paying extra to have the manufacturer not loading extra stuff on the machine:

“Bloatware” is a term that is familiar to many new computer buyers. Most new computers come saddled with HDD and memory-robbing applications like trial versions of antivirus programs, various desktop search and chat applications, or perennial offenders like Adobe Acrobat. Computer makers rely on these add-on programs to generate additional revenue in the age of decreasing computer prices — bloatware can add as much as $60 in additional revenue for each computer sold.
Sony, however, made the unwise decision to charge customers a $49.99 fee for the bloatware removal. Whether the charge was intended to somewhat makeup for the estimated $60 windfall from the application publishers or just an effort to squeeze more money from its customers remains to be seen. News of the $49.99 Fresh Start fee quickly spread around the Internet Saturday with sites taking Sony to task over the blunder. Sony quickly recoiled and removed the Fresh Start fee.

This quick reaction by consumers and Sony’s quick acceptance of this customer outrage shows that corporations are quickly cottoning onto the fact that customers, especially in this age of quick communications can turn reactions against a company very fast. Sony last suffered such a bad reaction over their Rootkit fiasco, and the prolonged bad press at that time would have made them much nimbler this time.




( March 2, 2008 )

MRTPC to probe problems faced by big retailers in medical sales

Subhiksha is a big retailer in India with branches spread all over. It is supposed to be a big boon for consumers, with most items being sold at a rate lower than that available in neighborhood shops, something that will help the limited budgets of most lower and middle class families. Now let us consider the field of buying drugs from the neighborhood medical shop. Till now, all these drugs have been sold at the MRP mentioned on the drug (a little known fact is that the MRP is the maximum price at which the item can be sold - it can be sold for lower than the MRP); and then Subhiksha had the medical section where you could buy a drug or potion for lower than possible at the normal pharmacist. Given that the elderly are the ones most affected by drug prices, Subiksha would be the savior for many of our senior citizens. And then Subiksha has been complaining recently that their supplies of medicine has been getting choked because small retailers and even wholesalers are worried about the lower price of Subiksha:

MRTPC will probe if chemists, wholesalers and medicine distributors have been trying to pressurise drug firms against selling to big retailers. The wholesalers and distributors, who would lose if companies sold directly to retail chains, seem to be supporting chemists and have threatened to squeeze supplies to retailers. The retail chains which are yet to finalise tie-ups with manufacturers are sourcing drugs through distributors and are increasingly finding it tough to forge direct purchase agreements.
On his part, Subhiksha managing director R Subramanian said “Restricting supplies of medicines is illegal as they are essential commodities. We have been facing problems in many markets including Chandigarh, Pune, Mumbai, Bangalore and Ahmedabad. We have decided to take them to court, and have approached the high courts.” Subhiksha sells medicines at discounted rates from 624 outlets. As per law, wholesale distributors cannot deny to supply to retailers when they have stocks.

If such a restriction can be proved, then the MRTPC should take strict action. It’s brief is to take action against anybody doing a trade restriction or an unfair trade practice, and restricting medicine to a low cost supplier would be a crime.




( January 29, 2008 )

Coca Cola fined for tobacco pouch in bottle

From time to time, we all hear stories about how supposedly closed cold drink bottles have had all sorts of things inside the bottle, ranging from cockroaches to pieces of metal, and so on. In a new twist that combines these stories with the push by our Health Minister to reduce the prevalence of smoking and tobacco consumption, a consumer found a bottle of Coca Cola containing a pouch of tobacco. He was shocked, and started a chain of correspondence with the company in order to discuss this, but apparently getting nowhere, he finally filed a case in the consumer redressal forum. And the consumer court ruled in his favor, awarding him a compensation of Rs. 15,000 (bringing the case dating from 2004 to a conclusion):

CHANDIGARH: The District Consumer Disputes Redressal Forum, Fatehgarh Sahib, has fined Coca Cola Rs 15,000 after a tobacco pouch was found in a bottle of the company. “The sale of contaminated Coca Cola, which is dangerous to human consumption is a matter of deficiency of service,” the forum said in its order.
It further said in the order that the fine is being imposed for causing harassment and mental agony to the complainant. The complainant had purchased six bottles of Coca Cola from the retail outlet on May 4, 2004. On reaching home he was shocked to see a pouch of tobacco in one of the bottles. When the matter could not be resolved despite a long correspondence with Coca Cola authorities, he lodged a complaint with consumer court.

This is typically what happens. What would normally happen in such a case is that the consumer would give up after some discussion with the company, either because he has not heard back or because he is reassured that this was an accident. And no production has 100% quality levels, so an occasional quality problem could pop up. What is needed however is that the company respond well to the consumer and not shirk their duty, which many companies in India do end up doing. To that extent, this is a good case; a consumer reported a problem to the consumer forum and got a solution.




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