Monday, March 19, 2018

Alleged unfair business practices of Retailers like Home Saaz, Lefestyle, Shoppers Stop, Pantaloons and others charging taxes on discounted sale price

Several posts have been written on this blog from 2014 onwards about unfair business practices of the retailers like Home Saaz, Lifestyle, Pantaloons, Shoppers Stop and others on charging of taxes on discounted sales prices. Some of the retailers have even been prosecuted but despite prosecution continue to carry out unfair business.  Recently on a complaint against Home Saaz about adoption of the similar practices, the Home Saaz was challaned for the same.

In a recent judgment on 06/02/2018, The Hon'able District Consumer Forum, Ludhiana in a complaint number No. 741 of 11.10.2017 of Mr. Brij Mohan, Chandigarh vs. The Mandhana Retail Ventures Limited, Being Human-Silver Arc. Gr.Floor, Store No.10, Gurdev Nagar, Near Arti Chowk, Firoz Road, Ludhiana-141001 has termed such practices as unfair trade practices and have imposed a cost of Rs. 4,000/- to be paid by the company to the consumer. A full judgement of the same is quoted below which can be used by the consumers who are being charged of such taxes on discounted sales:

"1. Complainant purchased one product bearing MRP of Rs.1779/- from Op because of given offer of 30% discount. After that discount, the price came to Rs.1259.30P, but by charging VAT @6.05% of amount of Rs.76.19P, amount of Rs.1335/- charged from the complainant. Charging of VAT on discounted price alleged to be an unfair trade practice and that is why, this complaint for seeking refund of excess charged VAT amount of Rs.76.19P along with compensation on account of mental and physical harassment of Rs.25,000/- and litigation expenses of Rs.15,000/-.

2. OP is ex-parte in this case.
3. Counsel for complainant in ex-parte evidence tendered affidavit Ex.CA of complainant along with documents Ex. C1 and Ex.C2 and thereafter, closed the evidence.
4. Written arguments not submitted, but oral arguments of counsel for complainant heard. Records gone through carefully.
5. Perusal of affidavit Ex.CA of complainant along with retail invoice Ex.C1 and tag on the product Ex.C2 shows as if the product purchased by the complainant was bearing MRP of Rs.1799/-(inclusive of all taxes). In retail invoice Ex.C1, it is mentioned as if the discount of Rs.549.70P given and VAT of amount of Rs.76.19P charged. As the VAT has been charged on discounted price, despite the fact that MRP was inclusive of all taxes and as such, OP adopted unfair trade practice, due to which, complainant suffered mental tension, agony and harassment, resulting in institution of this complaint by him.
6. As per law laid down in cases titled as M/s. Aero Club (Woodland) through its Manager vs. Rakesh Sharma, bearing Revision No.3477 of 2016 decided on 4.1.2017 by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi and Ethnicity vs Heena Aggarwal-2017(1)CLT-621(Chandigarh State Consumer Disputes Redressal
Commission ), in case, discount on MRP is given under circumstance that MRP is inclusive of all taxes, then act of deliberately charging VAT and other taxes on price after discount is an unfair trade practice.
7. In view of adoption of unfair trade practice, complaint deserves to be allowed with direction to OP to refund the excess charged amount of Rs.76.19P with interest @6% per annum w.e.f. the date of purchase namely 29.6.2017 till payment.
8. Therefore, as a sequel to the above discussion, complaint allowed ex-parte in terms that OP will refund excess charged amount of Rs.76.19P(Rs.Seventy six & ps.nineteen only) with interest @6% per annum w.e.f. 29.06.2017 till payment. Compensation for mental harassment of
Rs.2,000/- (Rupees Two Thousand only) and litigation expenses of Rs.2,000/- (Rupees Two Thousand only) more allowed in favour of complainant and against OP. Payment of this amount of compensation and litigation expenses be made within 30 days from the date of receipt of copy of
order. Copies of order be supplied to parties free of costs as per rules."

Defacing the privatel properties by political parties in India

I am attaching a snap of the property at Sector 37 Faridabad, the wall of which has been defaced by Aam Aadmi Party on 18th March 2018 for an election rally in Hisar scheduled 25th March 2018.  As can be seen that even the house number got hidden due to defacing the wall.

The message was posted on facebook and twitter duly tagging the Chief Minister Delhi, Shri Arvind Kejriwal and Shri Sanjay Singh, MP. The same was also posted tagging Chief Minister Haryana. However, it is surprising that the politicians preferred to maintain silence.  Is it the way that Aam Aadmi Party (AAP) want to clean the system by defacing walls of the personal properties. Time to revisit the objectives. Hope Municipal Corporation of Faridabad would look into the issue.

Tuesday, March 13, 2018

Director General of Civil Aviation (DGCA) must regulate cancellation fee/ rescheduling fee,preferential seat allocation fee being charged by Airlines

Director General of Civil Aviation (DGCA) need to intervene and frame out policy on cancellation fee chargeable by the Airlines and to withdraw the practice of charging for preferential seat allocation

                       Recently a ticket booked for Delhi- Ahmedabad-Delhi on 2nd February 2018 for scheduled Departure on 25th February 2018 and scheduled return journey on 28th February 2018 was required to be cancelled on 22nd February 2018. Surprisingly, the amount of refund by the intended passenger as received was merely Rs. 493/- out of the paid amount of Rs. 6,243/- deducting an amount of Rs. 5,750/-  supposedly to be the cancellation fee. 

                    Total amount paid:   Rs. 6,243
                    Amount deducted:    Rs. 5,750
                    Amount refunded:     Rs.    493

                           With such a high amount being deducted towards cancellation fee, there is a need for intervention of  DGCA appropriately to regulate the cancellation fee being deducted by the Airlines and the agents.
                            The Airlines are in the transport business of carrying the passengers and thus logically the charges or the fare need to be charged only when the passenger is availing the transport services. Transport services are the main area of the Airlines business and hence the income needs to be only out of transport services. In the instant case the passenger has paid an amount of Rs. 5,750/- without even availing the transport services of the Airlines thus violating the Consumer Protection Act, 1986. As per basic principles of Consumerism, the consumer is required to pay the charges for availing the services. In the present case, the passenger would have paid an amount of Rs. 6,243/- for travelling to Delhi- Ahmedabad- Delhi but has paid an amount of Rs. 5,750/- without even travelling or using any other services of the Airlines, Airport etc. The break up of the ticket fare as shown in the ticket was
                       Basic fare                         : Rs. 5,287
                       Taxes and other charges  : Rs.    956
                   While the basic fare was Rs. 5,287/-, the cancellation fee paid by the passenger who has not neither travelled nor utilised any iota of services is Rs. 5,750/-. Had he travelled and utilised the services of Airlines and Airport, he would have paid Rs. 5,287/- but by not travelling, he has paid Rs. 5,750/- . The cancellation fee in the present case comes to 109% of the airline fare and 92% of the total ticket cost.  It seems to be highly illogical and could be even termed as unprofessional/ unfair business practices. There is an urgent need for its rationalisation.
                             As per CAR SECTION 3 – AIR TRANSPORT SERIES ‘M’, PART II ISSUE I, DATED 22 May, 2008 ,

“ (d) Airlines shall necessarily return the PSF collected by them from the passengers on non-utilization/ cancellation of tickets.
(e) Airlines shall refund any charges such as congestion charge, fuel surcharge etc., along with the refund of the ticket, unless these are clubbed with basic fares.”

                          Same CAR effective 1st August 2016 also states:
                     “The airlines shall refund all statutory taxes and User Development Fee (UDF)/Airport Development Fee (ADF)/Passenger Service Fee (PSF) to the passengers in case of cancellation/non-utilisation of tickets/no show. This provision shall also be applicable for all types of fares offered including promos/special fares and where the basic fare is non-refundable.” 
                                It further states that “Under no circumstances, the airline shall levy cancellation charge more than the basic fare plus fuel surcharge. i) The airlines shall not levy any additional charge to process the refund.”
                           Even for the time being keeping aside the ethics of  professional business practices, in the instant case, the Airline should have refunded at least an amount of Rs. 956/- instead of Rs. 493/-.
                  The intended passenger had also petitioned the issue on a Local Circle Community to seek the public reaction and looking at the comments of the public being the perspective consumers of Airlines, the situation seems to be indicative of unprofessionalism prevailing in the Airlines sector. The Airlines have now even started charging an additional amount as preferential seat allocation fee. The preferential seat allocation charges being charged by the Airlines put inconvenience to two or more passengers travelling together or may be wife and husband or the senior citizens travelling with their younger ones as when checked in without paying any preferential seat allocation fee shall be are seated in the different middle rows of the seats thus making them feel uncomfortable throughout the entire journey specially when the ladies are carrying their minor children with them. Having fare been charged from the passengers, the charging of fee for preferential seat become of unethical business practices. Further it has also been reported by one of the person that the fare between Delhi- Chandigarh by Jet Airways was less than the cancellation fee. The ticket cost has been indicated as Rs. 2,403/- and the cancellation fee as Rs. 3,900/-. Most of the comments from the intellectual members on the Local Circle Community have opined for immediate intervention of DGCA, the Regulatory Authority for Airlines Sector to rationalise the amount of fee towards cancellation/ rescheduling fee and removal of preferential seat allocation fee. However, there is also a need to simplify the nomenclature being used by Airlines in charging the fee under different heads as different airlines are using different nomenclature.
                               In view of the above, there is a necessity for  intervention of DGCA appropriately in rationalising the

  1.      Cancellation fee/ ticket rescheduling charges. The cancellation fee or rescheduling charges need to be charged either as %age of the ticket basic fare or a nominal fixed amount not more than the basic fare. In our considered opinion, the same could be restricted to 10% of the basic fare if it is cancelled / rescheduled more than 48 hrs before the scheduled departure and not to exceed 50% if cancelled within 48 hrs to 8 hrs before the scheduled departure. In case the passenger cancels the ticket less than 8 hrs prior to the scheduled departure, the cancellation fee may not exceed the basic fare with refund of all other charges other than basic fare.  Similarly in our considered opinion, the rescheduling charges may be capped at Rs. 500/- per ticket.
    2.    Removal of preferential seat allocation fee.

Friday, February 9, 2018

Pettition to Department of Consumer Affairs for intervening in stopping unfair business by major retailers like Lifestyle, Shoppers Stop, Myntra, Jabong, Pantaloons, Home Saaz etc.

Petition to Department of Consumer Affairs for intervening in stopping unfair business by major retailers like Lifestyle, Shoppers Stop, Myntra, Jabong, Pantaloons, Home Saaz etc. 

Dear Readers,

I have been bringing to the notice of Govt. of India about the unfair business being carried out by major retailers like Lifestyle, Shoppers Stop, Myntra, Jabong, Pantaloons, Home Saaz etc. Several articles have been written on this blog since 2014, The copy of the Posts were being mailed to the respective retailers.However, the practice still continues as on date. The unfair business practices of these retailers are being derived out of charging taxes on the discounted sale price. The discounted sale price after factoring with the discount rate become revised MRP and hence charging of any tax on the MRP is unfair trade practices. Hon'able State Commission and Hon'able National Commission have already termed charging of tax on such discounted prices as unfair business practices and imposed penalties onto them for such unfair business. To a great dismay, these retailers are flouting the rules and continue with their such unfair trade practices (UTP). The attention of Department of Consumer Affairs (DCA) have been drawn to consider issue of necessary notification so as to curb the unfair business of the retailers. The content of my petition raised through a Local Circle Community is reproduced below:

"It has been noticed that the major retailers like Home Saaz, Myntra, Jabong, Pantaloons, Shoppers Stop, Lifestyle are adapting to unfair business practices by charging taxes on the discounted prices so arrived after earmarking for the offered discounts. Since the MRP is alwayz inclusive of taxes as per MRP rules for the packaged commodities, the discounted prices also become inclusive of Taxes in that proportion. The charging of taxes on such discounted prices is not only amounting to violation of MRP rules but also mislead the consumers as the product does not get purchase at the net discounted prices. Honable State Commissions and Honable National Commission have already adjudicated the matter and termed charging of taxes on discounted prices as unfair business practices. The petitioner on various occasions have got refund of the excess amount as and when the issue taken up but the practices still continues affecting almost all consumers who either or not aware or unable to raise the voice against such deceptive practices. I appeal to all the members to kindly sign the petition with their comments so that we are able to stop such deceptive trade practices. The Controller of Legal Metrology and Director, Legal Metrology are appealed to issue necessary notification for the benefit of the consumers across the country. Meanwhile I have already reported matter against Home Saaz Faridabad to Controller Legal Metrology, Haryana for taking penal action."

The readers and visitors of this blog are appealed to kindly visit the following link and sign the petition so that we together can make a change in the deceptive trade practices prevailing in the system

Please share the article as much as possible on face book, twitter, email etc. so as to gain the momentum of our contribution to the society by being vigilant to the unfair businesses.

Wednesday, January 24, 2018

Transacting Digitally

Transacting through Digital Payment System

The Indian government recently had initiated the demonetisation drive in November 2016 withdrawing currency of Rs. 500/- and Rs. 1,000/- from the market. The demonetization drive resulted into pushing the citizens to carry out banking transactions through Internet or plastic cards. Such technologically driven banking transactions also make banking transactions susceptible to financial frauds. 

As the banking sector moves deeper into the digital era where banks provide 24x7 technologically advanced products, the consumers need to exercise greater caution to avoid digital and net banking fraud. It is up to individual customers to ensure the safety and security of their payment systems and enjoy the ease and convenience of digital banking.

The normal mode of cashless transactions is through internet banking, cash cards, wallets, debit cards, credit cards etc.  While you enjoy such 24x7 newly-acquired convenience, it is essential to take necessary cautions on cyber security at every step.  Here are some of the steps you could take to ensure your financial data is safe.

Ø Create strong password & PIN, change them frequently. A PIN which is easily guessable is capable of depleting your account balance. Avoid using your date of birth, wedding anniversary, date of birth of  family members etc as PIN for your debit/credit cards. While setting passwords, long combinations of alphabets, numbers, and alphanumeric and special characters with mixed casing are advisable. Words that can’t be found in dictionaries or that are deliberately misspelt can potentially be stronger passwords. You must memorise a strong password which is unique in nature and can’t be guessed by anyone.
Ø Never write your PIN or password on the cards.
Ø RBI has already mandated about two-step authentication. The card industry has adopted 3-D secure methodology enabling you to register your smart phone for authentication. It is essential to receive OTP (one time password) which needs to be keyed in at the time of transactions. Delete the OTP which has been received on your registered phone.
Ø If you receive any such texts or notifications without your trying to log in, you must immediately notify the bank.
Ø Never respond to the calls seeking details about card numbers, account numbers. Sometime the fraudsters are advising the account holders to switch off the mobiles for sometime on the pretext of updations advising the recipient to switch on the mobile after certain time and seek the OTP to complete the updation process. Please be informed there is no such legal process and hence avoid acting on such advise. If possible inform to the police as a responsible consumer. Incidents have also been reported when such fraudsters also attempt to dupe of your family on the pretext of some mishappening with you.
Ø Careful where you swipe at ATMs/ POS terminals.  Scammers can steal your card data through skimmers on bugged ATMs and point-of-sale machines. Make sure you use your cards at secure ATMs and shopping outlets only. Using chip-less card always put you at a higher risk. Indian banks have already been mandated to upgrade all cards to chipped cards.
Ø When making a purchase, ensure that the salesperson processes your transaction in your presence. Check your card when it is returned to you by the cashier to ensure that it is yours and that it has not been tampered with any way. Total your charge slip before signing in, as blank spaces serve as an invitation for unscrupulous individuals to add additional amounts. 
Ø Do not withdraw the money from the ATMs if you find anyone standing inside the ATM. Many a times, it has been reported that the cards have been exchanged intentionally by the persons standing in the ATM area assisting the account holders for transactions.
Ø  Avoid sharing any sensitive information to the callers seeking details on the pretext of expiry of cards, blocking of transaction limits etc. No one including the bank officials have been authorised to seek such details.
Ø Use a power-on/access password for your computer, laptop and mobile as well as a screensaver password so that no one else can access your systems without consent. Change your passwords and security settings regularly.
Ø Always visit your bank’s secure Internet Banking site directly. Avoid accessing the site through a third-party link or via email. Verify the domain name before you try to log in.
Ø Log out of your Internet Banking account the minute you complete transactions. Do not close the window without logging off.
Ø Avoid using Internet Banking on unsecured WI-FI networks such as railway stations, airports and cybercafés.
Ø Install authentic security programmes to guard your system and account against hackers, virus attacks and other malware. Update the security programme or antivirus regularly.
Ø Install a suitable firewall to protect your computer or laptop and its contents. Never provide remote access to your system to anyone; not even family members, as it is still vulnerable to hacking.
Ø Disable the ‘File and Printing Sharing’ command on the operating system.
Ø Always log off your PC or laptop when not in use; don’t keep it lying around or trust a stranger with it.
Ø Never save your mobile banking log-in and password on the phone. Either memorise it or write it down somewhere else.
Ø Never leave your handset unattended and logged into a mobile banking app.
Ø Always lock your phone to prevent unauthorised use.
Ø Notify your bank as soon as your mobile is lost or stolen.
Ø Update the mobile banking app as and when a new version/upgrade is released. Also update your phone with latest security patches.
Ø Never download apps from untrustworthy and dubious sources.
Ø Always log out of your banking app after using it.
Ø Keep an eye on your account balance and transaction history regularly.
Ø If you suspect unauthorised transactions on your account, report it to your bank immediately or at least within three working days, so that your complaint/grievance is addressed in your favour. Any delay can leave you with a liability or financially poorer. 
Ø Third-party apps and downloads.  There is always a temptation, especially for Android users, to download something from the net instead from the Play Store. While Play Store vets most of the apps that are available on the platform, internet providers have no such obligation. Most of the sites that allow these downloads come with viruses and malware that can easily infiltrate and collect user information from your device. Play Store may not have everything or may have apps that are expensive, but that is the price you pay for security.
Ø SIM swap: The fraudsters will first collect your personal banking information through phishing, vishing, smishing or any other means. Once they have your personal information, they get your SIM blocked, and obtain a duplicate one by visiting the mobile operator’s retail outlet with fake identity proof. The mobile operator deactivates the genuine SIM card, which was blocked, and issues a new SIM to the fraudsters.  
Ø It is now simple to generate a one-time password (OTP) required for transactions using the stolen banking information. This OTP is received on the new SIM held by the fraudsters and they can now transact before the bank customer realizes the theft and alerts the bank. Please report the matter to the Bank and Police if you find your mobile was deactivated even for sometime. 
Ø If you have been a victim of any of the financial frauds, what should you do? As per RBI directives on “Frauds—classification and reporting”, the Reserve Bank of India has put the responsibility to provide protection against and fight frauds on banks, exposing them to a completely new horizon of financial risks. Further, banks are now required to report to the RBI complete information on frauds and the follow-up action. The RBI has also issued operative guidelines to regulate this channel, suggesting reporting of suspicious transactions to its financial intelligence unit. “To keep a check on frauds, banks need to incorporate a greater level of scrutiny by deploying advanced tools and technology capable of protecting the customers against unethical activities,”
Ø While banks are mandated to prevent frauds, you, too, can take some steps to protect yourself. Ethical hackers—people who hack to evaluate level of security and without any malicious intent—say that users should be especially careful when using banking or other apps on which financial transactions can be conducted.
Ø Check what you download and run on your phone. “For example, don’t use WhatsApp for confidential communication; use an encrypted app instead,” .
Ø You may want to limit debit card usage at PoS machines and use it only as an ATM card for cash withdrawal. “Try to use credit cards at PoS because if a fraud takes place, you can raise a dispute, and it is not your money,”. Be cautious at ATMs; look around for suspicious objects or hidden cameras above the keyboard.
Ø You may rub off the CVV number as written on the reverse of the card.  Memorize the CVV number before rubbing,  so that you can continue using the card. Use computers that have anti-virus software. Don’t share passwords, PINs and OTPs with anyone regardless of the reason stated. Banks never call asking for OTP details. Do not log into links sent on emails that require you to revalidate your credentials on account of a system upgrade. For apps, download directly from an app store; don’t click on unknown links or those sent by unknown numbers.
Ø Complaints: Many a times following complaints are reported.
* Transaction succeeded with deduction of the amount from the bank account but the credit could not be afforded to the Merchant.
* Fraudulent  transactions.
Ø In case you are transferring the amount to another account, please ensure that the details of the beneficiary like name, account number and bank name are correct. In case of any wrong transfer, it would not be possible to reverse the transaction. You might have to request the wrong beneficiary to seek and refund/return.
Ø Avoid transactions at cyber cafes as the cyber cafe may be adapting to some illegal software's to save the details of user ids and password.
Ø In case you are initiating payment of utility bills like telephone/ mobile bills, electricity bills etc. please ensure that the bill details are entered correct else the payment made to wrong bills can never be refunded or reversed.
Ø Register your mobile number and email id with the bank/ card issuer for any transaction     alerts. Update the same as and when there is change in the number.  
Ø Many merchants, banks are charging transaction fee for making payments through debit/credit/ cash cards, internet banking etc. Please study such terms before initiating any such payment.
General Transaction Failures.
Ø Following could happen:
* Payment deducted from the account but there is a failure at payment gateway due to bad connectivity, server problem etc.
* The payment succeeded at payment gateway but failed while being transferred from the payment gateway to the merchant/beneficiary.
Ø Payment gateways companies are required to settle payments with banks every day and hence any payment not reaching the payment gateway due to bad connectivity, server problem should get back to the account holder within two working days.
Ø In case the payment could not reach the merchant or beneficiary account, the payment should get transferred to the merchant//beneficiary within two working days. The consumers may take up the complaints of unsuccessful transactions keeping all the three institutions like Bank, Payment Gateway and the Beneficiary or Merchant in loop. 
Ø The complaint of unsuccessful transaction of withdrawal of cash from ATM cards using debit cards should get resolved within 7 days of making complaint to the bank with which the consumer has account irrespective of the card of which ever Bank is being used for cash withdrawal. Any delay beyond 7 working days of the complaints, the bank is required to pay penalty @ Rs. 100/- per day of default.
Ø In case of payment failure while making payment through the wallets, the debited amount should get credited back immediately.