Theme: Consumer Protection

Will I recover the entire sum of money that I lost from my account because of online bank fraud?

The Code of Bank’s Commitment to Customers says that you will have to be reimbursed by the bank, if you inform the bank promptly. Your maximum loss should never be more than Rs. 25,000 – for example, for a fraudulent withdrawal of INR 50,000 the bank will make good your loss of INR. 25,000, and you will only have to bear the loss of INR 25,000. This limit will NOT apply if you have acted fraudulently or negligently or have contributed to the disclosure of/unauthorized access to information.

Who is a consumer?

Consumers are people who(( Section 2(7), Consumer Protection Act, 2019.)) buy and use goods or services.  Consumers have a right to file a complaint for any of the services or goods used by them:

Person buying and using goods and services

A consumer includes any person who buys goods and services, as well as anyone who uses them. For instance, a person who watches a movie after buying a movie ticket is a consumer and similarly, a person who uses a gift voucher gifted from someone else  is also a consumer.

Person using goods for self-employment, and not for commercial purposes

The consumer protection law does not apply to people who use goods and services for commercial purposes. However, there are some exceptions to this. For example, a person who buys large machines for using it in their business, is not a ‘consumer’. However, people who use goods for self-employment are considered as consumers(( Section 2(7)(i), Consumer Protection Act, 2019.)).  For example, artists who buy art supplies for their work or beauticians who buy beauty products are consumers.

Person using online facilities

A consumer also includes any person who buys or hires goods or services online. For example, if you order from an online clothes website, you are a consumer.(( Explanation (b), Section 2(7), Consumer Protection Act, 2019.))

People facing issues related to food

Consumers also include people who may be facing issues related to food items, such as adulteration, poor quality, lack of service, etc.(( Section 2(21), Consumer Protection Act, 2019.)) For instance, issues related to food can cover problems across a wide range of products, starting from water that goes into the production of items like  juices as well as the sale of animals like chicken, mutton etc. that are expressly intended for human consumption(( Section 3(j), Food Safety and Standards Act, 2006.))

 

What are consumer rights?

Consumers who are unaware of their rights are vulnerable to the marketplace. It is vital for consumers to be aware of their rights so that they can make choices confidently, and with due regard to their interests. Consumer Rights include, but are not limited to, the following ((Consumer Rights, Department of Consumer Affairs, accessed at https://consumeraffairs.nic.in/organisation-and-units/division/consumer-protection-unit/consumer-rights:

Right to protection against goods and services which are hazardous to life and property

Goods should not only meet the consumers’ immediate needs, but also fulfill long-term interests, and the use of goods and services  should not result in any harm to consumers. For instance, if a person uses a medicine that cures an immediate ailment such as the flu, but the medicine causes worse side-effects, then they can file a consumer complaint.

Right to be informed

Consumers have the right to be informed about the quality, quantity, potency, purity, standard and price of goods. This right ensures that sellers put out authentic information on the product labels and do not make claims which are not true.

The government also publishes a price monitoring list for essential commodities along with Mandi prices, daily price reports, educational material on consumers’ digital safety etc. Some state Governments, such as Tamil Nadu, have also published advisories to educate consumers.

Right to choose a variety of items at competitive prices, wherever possible

Consumers have the right to get basic goods and services at fair prices. For example, you have the right to buy medicines either from the hospital medical store or from general stores at fair prices.

Right to file a complaint at Consumer Redressal Forums

Consumers have the legal right to use Redressal Forums to file their complaints. Every consumer has a right to file a complaint and be heard so that the grievance can be resolved.

Right to seek redressal against unfair trade practices

Unfair trade practices usually relate to cheating, deceiving, or defrauding the consumer through schemes, advertisements etc. The law protects consumers from being exploited and creates a system for the consumer to claim a fair settlement through the redressal forums.

Lodging a complaint with the Bank

Most banks have staff dedicated to matters like this. The relevant contact details are found on the backside of your card as well as the website of the bank. Telephone numbers of help desks are also displayed at every ATM machine.

If you have suffered a loss you must immediately contact the banks via phone (preferably) or email. Do not forget to note the complaint number and follow up your complaint using the same number. The bank should acknowledge your email.

The Code of Bank’s Commitment to Customers (CBCC) enacted by the Banking Codes and Standards Board of India (BCSBI) mandates each bank branch to display the name of the official at the bank branch responsible for addressing customer grievances.

If your complaint is unresolved at the branch level, you may approach the Regional or Zonal Manager or the Principal Nodal Officer (PNO) at the address displayed at the branch.

Typically, within 30 days of receiving the complaint, the bank will send you a final response or explain why more time is needed to investigate. The Bank will also tell you the process to take the complaint forward in the event you are still unsatisfied after the final response from the bank.

What is Consumer Welfare Fund?

The overall objective of the Consumer Welfare Fund(CWF) is to provide financial assistance to promote and protect the welfare of the consumers and strengthen the consumer movement in the country(( Section II, Consumer Welfare Fund Guidelines, 2019)). There are certain rules in place which govern the use of the CWF. Some of them are(( Section III, Consumer Welfare Fund Guidelines, 2019)):

  • Consumer awareness projects with wide coverage and adopting best international practices will receive priority for funding from CWF.
  • The Government will focus on rural and disadvantaged consumers and schemes to protect them when using the CWF. For this, projects relating to rural consumers and their empowerment(( Section IV, Consumer Welfare Fund Guidelines, 2019)), and such organizations that work for rural consumers (which also have large participation of women and socially marginalized groups)(( Section V, Consumer Welfare Fund Guidelines, 2019)), will receive special focus.
  • The CWF is also to be disbursed among the States and Union Territories, to create regional Consumer Welfare Funds, to fund welfare activities.
  • There is a marked effort towards contributing to the CWF through the corporate social responsibility funds that are earmarked by companies.
  • Innovative projects for consumer awareness and education, setting up training and research facilities for consumer education, projects relating to the rural consumer empowerment, Consumer Clubs in schools/colleges/Universities, setting up of Consumer Guidance Bureau at the State/ regional level for counselling and guidance, product testing labs, creating Centres of Excellence in Universities, meeting expenses on advocacy and class action suits, etc. get priority.

Applying for financial aid under the CWF

Calls for proposals seeking financial aid from the Consumer Welfare Fund are online, twice a year usually in the months of January & July. The appropriate notice and format of inviting proposals will be issued and published on the Consumer Department website. You can also download the application form for grants from Consumer Welfare Fund from the Consumer Department website(( Section VIII, Consumer Welfare Fund Guidelines, 2019)).

However, the Appraisal Committee can reject an application, for reasons including not meeting the eligibility criteria, incomplete forms trying to receive funds for the same venture through multiple Government forums, etc(( Department of Consumer Affairs, Consumer Welfare Guidelines, https://consumeraffairs.nic.in/sites/default/files/file-uploads/guidlines-2014/CWF%20Guidelines%202014.pdf. )).

 

Filing a complaint with the Banking Ombudsman

If you are not satisfied with the solution provided by the bank and would like to further enquire the matter, you can approach the Banking Ombudsman established by the Reserve Bank of India under the Banking Ombudsman Scheme, 2006. Each bank is required to display at its branch the details of the Banking Ombudsman under whose jurisdiction the branch falls. Complaints may be lodged with the respective Banking Ombudsman here.

You can only do this once you have tried to settle matters with the bank, and failed. If you file a case in Court, such as the Consumer Court, you cannot approach the Ombudsman while the case is going on.

If you are not satisfied with the decision of the Banking Ombudsman, you may approach the appellate authority against the Ombudsman’s decision – the Deputy Governor who is in charge of dealing with the implementation of the Banking Ombudsman Scheme, Reserve Bank of India. This appeal must be made within 30 days of the Ombudsman’s decision.

Types of Consumer Complaints

Every person has a right to file the following types of consumer complaints under consumer protection law:

E-commerce complaints

“E-commerce” means buying or selling goods or services (including digital products) over digital or electronic networks(( Section 2(16), Consumer Protection Act, 2019.)). It includes the production, distribution, marketing, sale or delivery of goods and services by electronic means (( Electronic Commerce, WTO, accessed at https://www.wto.org/english/thewto_e/minist_e/mc11_e/briefing_notes_e/bfecom_e.htm#:~:text=Electronic%20commerce%2C%20or%20e%2Dcommerce,and%20services%20by%20electronic%20means%22.&text=These%20WTO%20bodies%20were%20instructed,WTO%20agreements%20and%20e%2Dcommerce.)). 

E-commerce entities, such as online shopping websites like Flipkart (( Ajay Kumar v. Flipkart Internet Private Limited, 2018 SCC OnLine NCDRC 549.)) and Amazon(( Kent RO Systems v. Amazon Seller Services, 2017 SCC OnLine Del 8016.)) , have long been treated as service providers who work for a profit(( Rediff.Com India Limited v. Ms. Urmil Munjal, 2013(2) C.P.C. 536.)). They have been held liable whenever there has been a violation of consumer rights. One of the major reforms brought about by the Consumer Protection Act, 2019 is that it lays down a set of rules to govern these e-commerce entities(( Consumer Protection (E-Commerce Rules), 2020.)):

  • E-commerce entities will have to respond within 48 hours of complaint.
  • Complaints can be made from any place, regardless of where the purchase was made.
  • E-commerce entities such as Amazon, Flipkart, are now required to display the details of the sellers, such as their legal name, geographic address, contact details, etc.
  • These entities must not directly or indirectly manipulate the goods’ prices, and must not adopt any unfair or deceptive methods of sale.
  • They are prohibited from exaggerating the qualities of a product, and posting fake reviews.
  • The law mandates the protection of consumers’ personal information so that personal details are kept confidential and the privacy of consumers is protected.

Complaints about misleading advertisements 

An advertisement is a promotion through television, radio, or any other electronic media, newspapers, banners, posters, handbills, wall-writing etc. A misleading advertisement says untrue things about the goods and services, which can mislead the consumer in  buying them(( Misleading Advertisements, Department of Consumer Affairs, accessed at https://consumeraffairs.nic.in/more/misleading-advertisements. These advertisements may make false claims about a product or services’ usefulness((Section 2(47)(f), Consumer Protection Act, 2019)) , quality and quantity(( Section 2(28)(ii), Consumer Protection Act, 2019)), or deliberately conceal important information about the product(( Section 2(28)(iv), Consumer Protection Act, 2019)) (such as known side-effects), etc. Advertisers can be sued for making misleading claims in their advertisements. These include claims of being the first toothpaste to have a certain beneficial composition when it actually isn’t(( Colgate Palmolive (India) Ltd. v. Anchor Health & Beauty Care P. Ltd., (2008) 7 MLJ 1119.)), or advertising schemes that seek to increase profits without passing on the benefit to the consumers(( Society of Catalysts v. Vodafone Essar Mobile Services Limited, LNIND 2008 SCDRCD 962.)), etc. 

Complaints about unfair trade practices

Unfair trade practices have a broad definition under the consumer protection law. They include false statements about the goods’ standard, quality and quantity, and the marketing of used/second-hand goods as new goods. It also includes false claims about a warranty, or the warranty period being scientifically untested, etc. This has resulted in several lawsuits, one involving a noodle-maker labelling its packets with false lead content(( M/S Nestle India Limited v. The Food Safety and Standards Authority of India, W.P. L. No. 1688 of 2015.)), replacing the labels of pharmaceutical drugs to extend the expiry period(( Pooja Roy v. Krishnango Bhattacharya, C.R.R 2796 of 2008, Calcutta H.C.)), marketing adulterated goods with different ingredients than stated on the label(( Consumer Guidance Society v. Amway India Enterprises, (2007) C.C 140 of 2007.)), etc.

Complaints about restrictive trade practices

Restrictive trade practice means a trade practice which tends to manipulate the price, or delivery, of goods, which affect the flow of supplies in the market. This leads to the consumers facing unfair costs or restrictions. This is usually done in some of the following ways: price fixing, dealing exclusively, restricting the resale values of sold goods, mandating that buying one good or service entails buying other goods or services. One real-life example of this is the inbuilt price of delivery and fixing electronic goods. This ensures that the consumer ends up paying for the service, whether they want to or not, making them bear unfair costs.

Complaints about defective goods

Defective goods are goods(( Sections 2(10) and 2(11), Consumer Protection Act, 2019.)) with any fault, imperfection or shortcoming in the quality, quantity, purity or standard which is required to be maintained by the seller, under the law in force. Some examples are adulterated or imperfectly brewed beverages, malfunctioning machinery, misshapen artifacts, etc.

Complaints about spurious goods

Spurious goods are those which are falsely claimed to be genuine(( Section 2(43), Consumer Protection Act, 2019)) or are fake or imitative of real, original goods. These are often of inferior quality and infringe upon the trademarks and copyrights of legal owners of the original goods. A crucial example is that of medicines or cheap make-up products found in local markets. Often, spurious medicines are marketed under another drug’s name, or imitate/substitute another drug in a deceptive way(( Drugs and Cosmetics FAQs, Integrated Grievance Redressal Mechanism, accessed at https://consumerhelpline.gov.in/faq-details.php?fid=Drugs%20and%20Cosmetics.)).

Charging above the MRP (Maximum Retail Price)

Overcharging generally occurs in covert ways, when sellers charge the consumer more than what is prescribed as the Maximum Retail Price of a product. It is a gross violation of consumer rights.

Complaints about food

Presently, the law also addresses grievances related to food products. For example, customers can file their grievances about packaged food like the presence of adulterant, expired goods, missing FSSAI license, etc. or serving issues like the lack of hygiene, presence of pests, etc. at the Food Safety Connect Portal.

 

Who can complain?

A complaint (( Section 2(6), Consumer Protection Act, 2019.)) about a product or service can be filed by (( Section 2(5), Consumer Protection Act, 2019.)) a number of persons under the law, such as:

  • People who buy goods or use services for themselves or for their own work in exchange for a payment. (( Section 2(7),The Consumer Protection Act, 2019 (Act 35 of 2019)) For example, if a person takes an Uber cab to work, they are a consumer of a service. If a person buys a car to use it as a taxi and drives it themselves for earning their livelihood, they are a consumer of goods.
  • People who use the goods and services with the permission of the buyer who bought such goods for self-consumption or self-employment in exchange of a payment. For example, if a person buys a soap and that soap is used by their family members. All these people are consumers of the soap and can file a complaint in case of any defect in the soap.
  • A person who buys goods for commercial purposes can file a complaint during the warranty period of the goods (( Super Computer Centre vs Globiz Investment Pvt. Ltd., 3 (2006) CPJ 256 NC)). For example, if a person buys a computer system for their company and finds any defect in the system within the warranty period of the system, they will be a consumer.
  • Multiple consumers (( Section 2(7), Consumer Protection Act, 2019.)) who share similar grievances or issues. For example, if multiple people wish to complain about the service standards at a restaurant.
  • A registered or recognized voluntary association of consumers (( Section 35(1)(b), Consumer Protection Act, 2019.)) can also file a complaint.
  • Legal guardian of a consumer who is a minor. Legal guardian includes a parent or a relative or a person lawfully bestowed with parental obligations.
  • Legal representative of a consumer in case the consumer has passed away.
  • The Central or State Government can file a complaint.
  • The Central Consumer Protection Authority can take notice of a consumer grievance under the direction of the Central Government(( Section 18(2)(a), Consumer Protection Act, 2019.)). Under the law, this is known as the power to take a case suo motu (on its own) 8(( Section 18(2)(a), Consumer Protection Act, 2019.)).

Banks’ responsibility to prevent Online Bank Fraud

Banks must ask their customers to mandatorily register for SMS alerts for electronic banking transactions. Wherever available, they must ask their customers to register for e-mail alerts, for electronic banking transactions.

The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered in the event of an electronic banking transaction. To facilitate the customers to report any unauthorized use of their electronic banking services, banks must provide customers with 24×7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, Instant Voice Response, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions that have taken place and/ or loss or theft of payment instrument such as card, etc. Banks have to also enable customers to instantly respond by ‘Reply’ to the SMS and e-mail alerts so that the customers are not required to search for a web page or an e-mail address to notify the objection to an electronic transaction.

Banks have to also provide a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions on the home page of their website. The loss/ fraud reporting system should ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The banks must record the time and date of delivery of the alerts and receipt of customer’s response, if any.

The banks cannot offer the facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorised transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.

Consumer Complaint Forums

The consumer protection law specifies relevant authorities and complaint forums(( Chapter IV, Consumer Protection Act, 2019.)) that a consumer can approach if their rights(( Section 2(9), Consumer Protection Act, 2019.)) as a consumer are violated. There are three Consumer Disputes Redressal Commissions, at the district(( Section 28, Consumer Protection Act, 2019.)), state(( Section 42, Consumer Protection Act, 2019.)), and national level(( Section 53, Consumer Protection Act, 2019.)). All these forums have the duty to hear the concern of a consumer and ensure that every concern is given due importance(( Section 2(9)(iv), Consumer Protection Act, 2019.)). The jurisdiction of these Commissions is based on:

  1. The value (price) of the goods or services availed
  2. The place of residence of the consumer or seller, or the workplace of one of the parties, or where the dispute began
  3. The place where the person filing the complaint(( Section 2(5), Consumer Protection Act, 2019.)) resides

Complaints must be filed within 2 years since the dispute arose, to be admitted for a hearing at the Consumer Dispute Redressal Commissions(( Section 69(1), Consumer Protection Act, 2019)). The Complaint Redressal Commissions that can be approached for consumer rights violations and the type of matters adjudicated by them are as follows:

District Consumer Disputes Redressal Commission (DCDRC)

The District Commission is a district-level complaint redressal forum that looks into complaints about goods whose value is below Rupees one crore(( Section 35(1)(a)(i), Consumer Protection Act, 2019.)). The Commission accepts or rejects a complaint within a period of 21 days. If the commission does not respond in the specified time, the complaint will be accepted and looked into by the District Commissions(( Section 36(2), Consumer Protection Act, 2019.)). Before rejecting a complaint, the commission must give the complainant the opportunity to be heard. The Commission has the power to order for the removal of any problems or defects from the goods or services availed, or it can order a payment of fine(( Section 39, Consumer Protection Act, 2019.)) as a relief to the complainant. The parties to a case also have the option to file an appeal against the order of the District Commission to the State Commission within 45 days of the District Commission order(( Section 41, Consumer Protection Act, 2019.)). You can find details of the district commissions given in the National Consumer Redressal website.

State Consumer Disputes Redressal Commission (SCDRC)

The State Commission is a state-level complaint redressal forum located at the capital(( Section 42(2), Consumer Protection Act, 2019.)) of the respective state where complaints with respect to goods having value between Rupees 1 crore to 10 crores can be filed. There are about 35 state commissions in the country where complaints, appeals from the District Commission, and cases about unfair contracts are heard(( Section 47(1), Consumer Protection Act, 2019.)). An appeal against the decision of the State Commission can be filed with the National Commission, within 30 days from the date of the order(( Section 51, Consumer Protection Act, 2019.)). Once such an appeal is filed, it is required to be decided within 90 days by the National Commission(( Section 52, Consumer Protection Act, 2019.)).

National Consumer Disputes Redressal Commission (NCDRC): 

The National Commission is the upper-most authority for consumer complaints redressals. It is located at New Delhi(( Section 53(2), Consumer Protection Act, 2019.)). Complaints about goods or services whose value is above Rupees 10 crores, and appeals against the orders of the State Commission or the Central Consumer Protection Authority, can be filed with the NCDRC(( Section 58(1), Consumer Protection Act, 2019.)). An appeal against the decision of the National Commission can be filed with the Supreme Court within a period of 30 days from the date of the order passed(( Section 67, Consumer Protection Act, 2019.)). The orders of the Commission are published on its website. The Commission has the legal right to publish the orders and no proceedings can be brought against the Commission for publishing these orders(( Rule 12(8), Consumer Protection (Consumer Disputes Redressal Commission) Rules, 2020.)). The National Commission portal also provides video instructions pertaining to registration and filing of an electronic complaint through its forum.

Time for deciding complaints

A consumer complaint must be decided by the Commissions within a period of 3 months. This may be extended to 5 months in case there is a requirement for testing of the products/defects(( Section 38(7), Consumer Protection Act, 2019.)).

Appeals for orders passed by Commissions

The order passed by the Commissions are final if they have not been appealed in the specified period of time(( Section 68, Consumer Protection Act, 2019.)). This rule has exceptions, as the Commission can accept cases for which appeals were not filed in the prescribed time.  Besides these provisions, the cases can be transferred from one district commission to another and from one State Commission to another by the State1 and National Commissions(( Section 62, Consumer Protection Act, 2019.)) respectively, if and when the parties apply.

A consumer who has filed a complaint with any of the forums given above, can track their case through the Online Case Status portal. You can ask your lawyer for details of your case number for tracking the case(( Rule 7(2), Consumer Protection (Consumer Dispute Redressal Commissions) Rules, 2020.)).

 

  1. Section 48, Consumer Protection Act, 2019. [↩]

Filing a complaint for Online Bank Fraud

Police Station

When you go to the police station to complain about online bank fraud, they will ask you to file an FIR. You should make sure you give all the information you know about the online fraud that happened to you.

Online Complaint

Besides filing an FIR with the cyber crime cell of a police station, you can also file an online complaint on the Ministry of Home Affairs’ Online Crime Reporting Portal. Register a complaint by providing detailed information about the incident. You can also choose to upload files, like screenshots of the e-mails or messages you received regarding fraudulent transactions.

Consumer Complaints against E-commerce Platforms

Consumers can also complain against unfair trade practices involving digital and other products bought through e-commerce platforms and retailers. Any person who owns, operates or manages any digital or electronic platform offering goods or services for sale, is an e-commerce entity. An e-commerce entity is separately governed by e-commerce rules(( Consumer Protection (E-Commerce) Rules, 2020.)) in India.

These rules are only applicable to professional and commercial businesses and not for an individual acting in their personal capacity(( Proviso to Rule 2, Consumer Protection (E-Commerce) Rules, 2020)). For instance, a consumer can complain against Amazon as it is an e-commerce entity regularly engaged in the activity of sale of goods through its e-commerce website. However, if there are issues with a product on a platform like Amazon, Amazon would be held liable for product liability actions, not the product manufacturer.

Interestingly, the product liability for an e-commerce entity extends beyond India. This means that these platforms are equally liable under the consumer protection law, in addition to their own country’s domestic laws(( Rule 2(2), Consumer Protection (E-Commerce) Rules, 2020.)). For instance, a foreign e-commerce entity such as Liyid delivers its products in India; in case of any harm caused due to defective products, a product liability action can be brought against Liyid in India and in the foreign country.

Liabilities of e-commerce platforms

E-commerce platforms are held liable for the following:

  • Price manipulations on their sites,(( Rule 4(11)(a), Consumer Protection (E-Commerce) Rules, 2020.))
  • Negligence in services provided and discrimination against customers(( Rule 4(11)(b), Consumer Protection (E-Commerce) Rules, 2020.)).
  • Misleading advertisements, unfair trade practices(( Rule 4(3), Consumer Protection (E-Commerce) Rules, 2020)) and inaccurate descriptions/information of products.
  • Refusing to refund or return a defective product(( Rule 7(4), Consumer Protection (E-Commerce) Rules, 2020)).
  • Failure to provide warnings or instructions with respect to the goods or services availed by a customer(( Section 85(c), Consumer Protection Act, 2019)).
  • False descriptions, and violations about the authenticity and images of the goods or services advertised for sale on their platform(( Rule 5(2), Consumer Protection (E-Commerce) Rules, 2020)).

However, they will not be liable if the dangers of the product are common knowledge. For example, if a consumer misuses or alters a dangerous product like flamethrowers then the e-commerce entity cannot be held liable for this(( Section 87(1), Consumer Protection Act, 2019)).

Complaining to E-Commerce Platforms

E-commerce platforms must establish a ‘Grievance Redressal Mechanism’ and should appoint a ‘Grievance Officer’ for Indian customers to get their concerns addressed(( Rule 4(4), Consumer Protection (E-Commerce) Rules, 2020)). The details about the Grievance Redressal Mechanism must be displayed on the e-commerce platform. The Grievance officer must acknowledge the complaint within 48 hours and address the concern within a period of one month(( Rule 4(5), Consumer Protection (E-Commerce) Rules, 2020)).

 

Filing a case with Consumer Forum

The Consumer Forum is present at the District, State, and National Levels. You can file a case there depending on 2 factors:

  1. The amount of money you lost:
    • District Forum: Upto Rs. 50 Lakhs
    • State Commission: Rs. 50 Lakhs to Rs. 2 Crores
    • National Commission: Exceeding Rs. 2 Crores
  2. Where the loss happened :
    • You can file the complaint in the place where the money was lost, or where the opposite party (that is, the bank) carries on their business.

You should approach consumer forums only when you feel that the bank has been negligent, and has not given you proper service. The forum does not prosecute the actual culprit.

Generally, cases cannot be simultaneously filed before the consumer courts as well as the Banking Ombudsman.

Procedure to file a consumer complaint

A complaint(( Section 2(6), Consumer Protection Act, 2019)) can be filed electronically to the Integrated Grievance Redressal Mechanism portal (INGRAM), or offline with the consumer protection authorities such as district or state commissions to seek relief for consumer rights violations. Further there are helplines as well as phone based applications one can use to register complaints. If the complaint is not resolved, you can take the help of a lawyer to approach the consumer forums as the next step.

Complaint Process: Telephone 

 

Step-1: Check if you are a Consumer under the law

The complainant should be a consumer or an association of consumers(( Section 35(1), Consumer Protection Act, 2019)).

Step-2: Call the Helpline Number

Consumers can call the National Consumer Helpline: 1800-11-4000 or 14404 to register a complaint, except on national holidays. Alternatively, complaints can also be registered through SMS on + 91 8130009809.

Step-3: Give details about the Complaint

Name, contact details and address of the complainant and the seller must be mentioned to the helpline authority, along with the details of the complaint. The authority will register your complaint and give you a Unique Grievance ID.

Step-4: Track your Application

The grievance is then forwarded to the concerned seller, company, regulator, or authority for action. The action taken is updated against each grievance. Your grievance can be tracked with your Grievance ID by calling the helpline or through the Integrated Grievance Redressal Mechanism portal.

Step-5: Resolution of complaint

If your complaint is not resolved, then you can initiate a legal process by approaching the relevant Consumer Forum. The helpline authority can help in clarifying any doubts that you may have about the legal procedure.

E-Complaint Process: Internet (INGRAM Portal)

The Department of Consumer Affairs has launched a portal known as the Integrated Grievance Redress Mechanism (INGRAM) for bringing all stakeholders such as Consumers, Central and State Government Agencies, Private Companies, Regulators, Ombudsmen and call centres etc. onto a single platform. The portal will also help in creating awareness among consumers to protect their rights and inform them of their responsibilities. Consumers can register their grievances online through this portal.

Step-1: Check if you are a consumer under the law

The complainant should be a consumer under the law, meaning someone who is a consumer of a product or an association of consumers.

Step-2: Register on the INGRAM Portal

The complainant must register themselves as a consumer on the INGRAM portal. The complainant must fill in the required details and documents(( Rule 12(1), Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020))to register their complaint, such as name and address of the complainant and the seller, the facts of the dispute and the relief that the complainant seeks(( Rule 12(1), Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020)). A one time registration is required for lodging a grievance. For registration, go to the web portal http://consumerhelpline.gov.in and click on the login link. Sign up giving the details required, and verify through your email. The user id and password are created. Using this user id and password, enter the portal and fill in required details of the grievance, attaching necessary documents (if available).

Step-3: Pay the Fee

The complainant must pay the fee(( Section 35(2), Consumer Protection Act, 2019))(if applicable) for complaint registration through digital payment mode, or apps like BHIM App, UMANG App to the respective Consumer Commissions in accordance with the value of the goods(( Rule 7(2), Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020)).

Step-4: Track your Application

Every grievance is registered and a Unique Grievance ID is issued. The grievance is forwarded to the concerned company, regulator, or authority for action. The action taken by them is updated against each grievance. The grievances filed can be tracked through the INGRAM portal.

Consumer Courts/Forums

Through the INGRAM portal, efforts are made to ensure that the grievance is redressed by taking up with the authorities concerned, which may be a company, ombudsman etc. However, if the issue is still pending, a consumer has a choice to approach the appropriate consumer court or forums with the help of a lawyer. Only complaints that are filed within 2 years since the dispute arose will be admitted for a hearing at the Consumer Dispute Redressal Commissions.

 

Customer Liability

The customer must not reveal/share payment credentials with any third party. If a customer does this then the customer’s liability will increase because of his or her negligent actions. It is the bank’s responsibility to prove that the customer is liable (to whatever degree) in case of unauthorised electronic banking transactions. At their discretion Banks may also decide to waive off any customer liability in case of unauthorised electronic banking transactions. They can do this even in cases of customer negligence.

The customer will incur zero liability when:

  • There is an unauthorized transaction due to contributory fraud or negligent behaviour or deficiency in the bank’s services. If you don’t report the unauthorized transaction to the bank, it does not matter because the zero liability occurs whether or not you report it.
  • There is a breach but it is not with the customer or bank, but somewhere else in the system. In this case, you should notify the bank within three working days of receiving communication about the unauthorized transaction.

The customer will incur limited liability if there is a delay of four to seven working days after receiving the communication from the bank about the unauthorized transaction, in such a situation the per transaction liability of the customer will be limited to the transaction value or the amount mentioned in this Table below, whichever is lower.

Maximum Liability of Customer

Type of Account Maximum Liability
Basic Savings Deposit Account Rs. 5,000/-
All other Savings Bank Accounts, Pre-paid Payment Instruments and Gift Cards, Current/Cash Credit/Overdraft Accounts of Micro, Small and Medium Enterprises, Current Accounts/Cash Credit/Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/limit up to Rs.25 lakh, Credit cards with limit up to Rs.5 lakh Rs. 10,000/-
All other Current/ Cash Credit/ Overdraft Accounts, Credit cards with limit above Rs.5 lakh Rs. 25,000/-

Fee for making complaints

Every complaint(( Section 2(6), Consumer Protection Act, 2019.)) filed under the consumer protection law must be accompanied with a nominal fee that is payable in the form of a demand draft of a nationalized bank or through a postal order(( Rule 7(1), Consumer Protection (Consumer Complaint Redressal Commissions) Rules, 2020)), or in electronic form(( Section 35(2), Consumer Protection Act, 2019)). The fee structure based on the value of goods or services is given below(( Section 35(2), Consumer Protection Act, 2019)):

 

Fee payable to the District Consumer Disputes Redressal Commission:

 

Value of Good or Services Old Fee New Fee
Upto one Lakh – Upto to one lakh rupees – For complainants who are under the Below Proverty Line holding Antyodaya Anna Yojana cards No fee No Fee
Upto one lakh Rupees – For complainants other than Antyodaya Anna Yojana card holders No Fee Rs. 100
Rs. 1 lakhs – Rs. 5 lakhs No fee Rs. 500
Rs. 5 lakhs – 10 Rs lakhs Rs. 200 Rs. 1000
Rs. 10 lakhs – Rs. 20 lakhs Rs.400 Rs. 2000
Rs. 20 lakhs – Rs. 50 lakhs Rs. 1000
Rs. 50 lakhs – Rs. 1 crore Rs. 2000

 

Fee payable to the State Consumer Disputes Redressal Commission:

Value of Good or Service Old Fee New Fee
Rs. 20 lakhs – Rs. 50 lakhs NA Rs. 5000
Rs. 50 lakhs – Rs. 1 crore NA Rs. 10,000
Rs. 1 crores – Rs. 2 crores Rs. 2500 NA
Rs. 2 crores – Rs. 4 crores Rs. 3000 NA
Rs. 4 crores – Rs. 6 crores Rs. 4000 NA
Rs. 6 crores – Rs 8 crores Rs. 5000 NA
Rs. 8 crores – Rs. 10 crores Rs. 6000 NA

Fee payable to the National Consumer Disputes Redressal Commission:

 

Value of Good or Service Old Fee New Fee
Above Rs. 1 crore NA Rs. 25,000
Above Rs. 5 crore NA Rs. 50,000
Above Rs. 10 crores Rs. 7500 Rs. 1,00,000

 

An important thing to note is that the collected fees go to the Consumer Welfare Fund, at the State level or the National level, as the case may be. Where such Fund does not exist, it is directed to the State Government(( Rule 7(2), Consumer Protection (Consumer Complaint Redressal Commissions) Rules, 2020)). The fee is utilized to continue consumer welfare projects.

 

Reversing an unauthorized transaction

After receiving the notification from the customer of the unauthorized transaction, the bank will reverse the transaction and will credit the amount involved in the authorized electronic transaction. This should be done within 10 working days from the date of the receipt of notification from the customer. The banks should not wait for settlement of insurance claims to do this. The Bank will credit the money as per the value as of the date of the unauthorised transaction.

Punishments for Consumer Rights Violations

The Central Consumer Protection Authority has the power to penalize an individual or entity for violating consumer rights. This is ensured through various means such as fines, taking back the defective goods(( Section 20(a), Consumer Protection Act, 2019)), reimbursements for such goods/services(( Section 20(b), Consumer Protection Act, 2019)), or discontinuation of unfair trade practices(( Section 20(c), Consumer Protection Act, 2019)).

Punishments for false or misleading advertisements

The manufacturer, advertiser or endorser is liable for false or misleading advertisements. However, the endorser’s liability in these cases only arises when they have not done their research(( Section 21(5), Consumer Protection Act, 2019)) before endorsing such an advertisement. The punishment is:

  • For the first offence: A fine which may extend up to Rs. 10 lakh and jail time up to 2 years5(( Section 89 & Section 21 (2), Consumer Protection Act, 2019)).
  • For every repeat offence: A fine which may extend up to Rs. 50 lakh and jail time up to 5 years may be awarded(( Section 89 & Section 21 (2), Consumer Protection Act, 2019)).
  • The Central Authority can also prohibit them from endorsing any product for up to 1 year. In case of subsequent offences, it can be extended up to 3 years(( Section 21(3), Consumer Protection Act, 2019)).
  • Failure to comply with these directions of the Central Authority can result in jail time for up to 6 months or a fine extending to Rs. 20 lakh(( Section 88, Consumer Protection Act, 2019)).

 

Punishments for sale of adulterated products

Any action of the manufacturer or retailer involving the sale, import, storage or distribution of adulterated food is punishable. The following punishments apply:

  • When there is no injury(( Section 2(23), Consumer Protection Act, 2019)) to the consumer, like any kind of pain or death, jail time for up to 6 months and a fine of up to Rs. 1 lakh may be granted(( Section 90(1)(a), Consumer Protection Act, 2019)).
  • When the injury does not amount to grievous hurt to the consumer, jail time for up to 1 year and a fine of up to Rs. 3 lakhs may be granted(( Section 90(1)(b), Consumer Protection Act, 2019)).
  • When there is grievous hurt to the consumer, jail time for up to 7 years and a fine of up to Rs. 5 lakhs may be granted(( Section 90(1)(c), Consumer Protection Act, 2019)).
  • When the adulteration has caused the death of the consumer, jail time for not less than 7 years and extending up to life, and a fine of not less than Rs. 10 lakhs may be granted(( Section 90(1)(d), Consumer Protection Act, 2019)).

Additionally, the Consumer Authority may suspend the license of the manufacturer for up to 2 years, when it is the first offence or cancel the license of such manufacturer altogether if the offence is repeated(( Section 90(3), Consumer Protection Act, 2019)).

Punishments for sale of spurious goods

Spurious goods are those which are falsely claimed to be genuine(( Section 2(43), Consumer Protection Act, 2019)) or are fake or imitative of real, original goods. These are often of inferior quality and infringe upon the trademarks and copyrights of legal owners of the original goods. A crucial example is that of medicines or cheap make-up products found in local markets. Any action of the manufacturer involving the sale, import, storage or distribution of these goods, is punishable as follows:

  1. If the injury does not amount to grievous hurt to the consumer, jail time for up to 1 year and a fine of up to Rs. 3 lakhs may be awarded15(( Section 91(1)(a), Consumer Protection Act, 2019)).
  2. When such spurious goods cause grievous hurt to a consumer, jail time up to 7 years and a fine up to Rs. 5 lakhs may be awarded to the manufacturer16(( Section 91(1)(b), Consumer Protection Act, 2019)).
  3. When the good bought has caused the death of a consumer, jail time for a minimum period of 7 years extending up to life jail time and a minimum fine of Rs. 10 lakhs may be awarded17(( Section 91(1)(c), Consumer Protection Act, 2019)).

 

Customer’s Responsibility to Notify Unauthorized Transactions

The customers must be advised to notify their bank of any unauthorised transaction as soon as they can or at the earliest possible opportunity. The longer the time taken to notify the bank, the higher will be the risk of loss to the bank/ customer.

The Bank will note the time of the SMS sent notifying the customer of the electronic banking transaction and the SMS/response received by the customer. This is done to ascertain the extent of a customer’s liability.

Mediation as a mode of Consumer Dispute Settlement

Mediation(( Section 2(25), Consumer Protection Act, 2019)) is an out-of-court settlement where the parties can decide the manner of the proceedings. It helps the speedy settlement of disputes.

The Consumer Protection Act, 2019 has introduced the provision where the relevant Commission can refer a consumer dispute for mediation, when there is a scope of settlement between the parties(( Section 37(1), Consumer Protection Act, 2019)). However, parties to the mediation are given a time frame of 5 days to accept or reject the process of mediation, as consent is vital for it(( Section 37(2), Consumer Protection Act, 2019)). Once a dispute is referred to mediation, the fee paid to the Commission for dispute redressal is refunded to the parties(( Rule 5, Consumer Protection (Mediation) Rules, 2020)).

Process of Mediation

The mediation proceeding may be conducted in the following way:

Step-1: It would be held at a ‘Consumer Mediation Cell’ which would have a panel of mediators to settle disputes. This cell maintains a list of cases and records(( Regulation 11(7), Consumer Protection (Mediation) Regulations, 2020)) of the proceedings(( Section 74, Consumer Protection Act, 2019)).

Step-2: Every mediator is expected to act fairly and judiciously while deciding the matter(( Section 77, Consumer Protection Act, 2019)). A fee is also paid to the mediator before the proceedings begin(( Rule 8(6), Consumer Protection (Mediation) Rules, 2020)).

Step-3: Mediation would be conducted in the presence of both parties(( Regulation 11(1), Consumer Protection (Mediation) Regulations, 2020)) and will remain confidential(( Regulation 12, Consumer Protection (Mediation) Regulations, 2020)).

Step-4: The parties must provide all the relevant information and documents to the mediator(( Regulation 11(6), Consumer Protection (Mediation) Regulations, 2020)).

Step-5: If the parties come to an agreement after the mediation proceedings within 3 months(( Regulation 11(2), Consumer Protection (Mediation) Regulations, 2020)), a ‘settlement report’ would be forwarded to the Commission along with the signatures of the parties(( Sections 80 (1) and 80 (2), Consumer Protection Act, 2019)).

Step-6: The concerned Commission is required to pass an order within the 7 days of receiving the ‘settlement report’ of the parties(( Section 81(1), Consumer Protection Act, 2019)).

Step-7: In case no agreement has been reached through mediation, the same is communicated to the Commission through a report of proceedings. The Commission would then hear the issues of the concerned consumer dispute and decide the matter(( Sections 80(3) and 81(3), Consumer Protection Act, 2019)).

Step-8: A dispute cannot be taken to other proceedings, like arbitration or court litigation, once it has undergone the mediation procedure(( Rule 6, Consumer Protection (Mediation) Rules, 2020)).

Complaints which cannot be settled by mediation

However, the following matters cannot be referred to mediation(( Rule 4, Consumer Protection (Mediation) Rules, 2020))

  • Serious medical negligence or one that results in death.
  • Fraud, forgery, coercion.
  • Applications for compounding of offences(( Section 96, Consumer Protection Act, 2019)) by either of the parties.  This means that proceedings about these offences can be settled between the parties upon the payment of fine unless the commission of such offence has recurred in a span of 3 years(( Sections 88 and 89, Consumer Protection Act, 2019.)).
  • Criminal offences and public interest issues. These include issues concerning the public who are not parties to the case. For example, violation of privacy in terms of electronic bank transactions on e-commerce platforms.

 

Maximum Customer Liability and Bank Policy

The maximum a customer of a Basic Savings Bank Deposit Account can be liable for is Rs 5,000.

All other Savings Bank Accounts, Pre-paid Payment Instruments and Gift Cards, Current/ Cash Credit/ Overdraft Accounts of Micro, Small and Medium Enterprises, Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to Rs.25 lakh. Credit cards with limit up to Rs.5 lakh, the maximum they are liable for is Rs. 10,000

For all other Current/ Cash Credit/ Overdraft Accounts and credit cards with limit above Rs.5 lakh, they can be liable up to Rs 25,000.

If the delay is for more than seven working days, the customer liability will be determined as per the Bank’s Board Policy:

  • Banks should provide the details of their policy in regard to customers’ liability formulated at the time of opening the accounts.
  • Banks should also display their approved policy in public domain for wider circulation.
  • The existing customers must also be individually informed about the bank’s policy.

Consumer Protection Authorities

Given below are the details and functions of all the consumer protection authorities:

Central Consumer Protection Authority(( Chapter III, Consumer Protection Act, 2019))

The Central Consumer Protection Authority (CCPA) aims to promote, protect and enforce the rights of consumers collectively. The CCPA is empowered to:

  • Conduct investigations into violation of consumer rights and start prosecutions on complaints received.
  • Order recall of unsafe goods and services
  • Order discontinuation of unfair trade practices and misleading advertisements
  • Impose penalties on manufacturers, endorsers and publishers of misleading advertisements(( Central Consumer Protection Authority established to promote, protect and enforce the rights of consumers, PIB, accessed at https://pib.gov.in/PressReleasePage.aspx?PRID=1642422.)).

It is headquartered in New Delhi(( Notification by Ministry of Consumer Affairs, Food and Public Distribution dated 23 July, 2020, accessed at https://consumeraffairs.nic.in/sites/default/files/Estt%20of%20CCPA.pdf, but there is also scope to set up regional centers throughout the nation((Section 10(3), Consumer Protection Act, 2019.)). The CCPA can begin to inquire into the mentioned issues either when they receive complaints, or on their own.

Consumer Protection Councils(( Chapter II, Consumer Protection Act, 2019.))

The Central Consumer Protection Council has advisory functions, giving suggestions about the promotion and protection of consumer rights. Similarly, state-level units called State Consumer Protection Councils and District Consumer Protection Councils are also formed which perform similar advisory functions. Some of the other bodies that also perform similar roles (such as spreading awareness) include, Consumer Education and Research Centre (Gujarat) , Bureau of Indian Standards, Federation of Consumer Organization in Tamil Nadu, Mumbai Grahak Panchayat, etc.

 

What is product liability?

Product liability refers to the responsibility of the product manufacturer or seller to compensate for the harm caused to the customer due to a defect in the product or deficiency in service(( Section 2(34), Consumer Protection Act, 2019.)). The harm caused can include issues such as personal injury, mental distress, death, damage to property, breach of contract, etc(( Section 2(22), Consumer Protection Act, 2019.)). For example, if an online food product causes health issues or is highly adulterated, a consumer can file a complaint to bring about a product liability action against the seller(( Section 83, Consumer Protection Act, 2019)). A complaint can be filed against the product manufacturer, the seller and the service provider in such cases.

Instances of product liability (( Section 84, Consumer Protection Act, 2019.))

  • When the product has a manufacturing defect or is not good enough
  • Where the manufacturing of the product did not conform with manufacturing specifications
  • Modification or alteration in the product that has caused the harm(( Section 86(b), Consumer Protection Act, 2019.))
  • The product has a design, testing or packaging defect
  • Inadequate instructions or warnings as to the usage of the product bought1
  • Product that does not conform with the express warranty or guarantees mentioned

 

  1. Section 86(e), Consumer Protection Act, 2019. [↩]

What are services?

Service means any activity made available to people, and it can include facilities related to banking, financing, insurance, transport, processing, provision of electrical or other energy, telecom, boarding or lodging, housing construction, entertainment, amusement or the relay of news or other information(( Section 2(42), Consumer Protection Act, 2019.)).

‘Services’ include any activities carried out by one person for another, in return for some payment or other benefits such as gift vouchers, as part of an offer, etc. For instance, activities like haircuts, medical check-ups, packing-and-moving services, flour mills, massages, watch-repairs, etc. for payment would be considered as services. Broadly, it can be said that services include:

  • Business services: Business services are services that support the daily functioning and activity of any business, such as technological setup, website hosting, call centers, banking, transport service, telecom etc.
  • Personal services: Personal services are usually more individualistic in nature, such as catering, hotel accommodation, medicine, painting, sculpting etc.
  • Social services: Social services are usually funded by the Government, and include services such as housing, medical care to the underprivileged, primary education etc.

Services that are free of charge

Further, services that are free of charge(( Section 2(42), Consumer Protection Act, 2019.)),  are usually not covered under consumer protection laws(( Joint Labour Commissioner and Registering Officer and Another v. Kesar Lal, AIR 2020 SC 2596.)). In other words, unpaid services which are provided informally, rather than with an expectation of a fee, are not covered under consumer protection law. For example, if someone goes to a doctor for a medical check-up, but being an acquaintance, the doctor does not charge any fee, the patient cannot later sue the doctor for any deficiency of service, as it had been provided free of charge. However, a traveller buying a ticket for a train is a consumer, and can sue the railways for any deficiency of service including bad food service, bad hygiene standards etc((Commentary on Consumer Protection Act, National Consumer Disputes Redressal Commission, accessed at, http://ncdrc.nic.in/bare_acts/1_1_2.html.