Misappropriation of consumers' money - A scam by Flipkart ? (Part 1)
Flipkart Internet Private Ltd. started its operation in India as e-commerce market place in October, 2007 and as per information available on its website has 80 million products across 80+ categories. It further states having 100 million registered users, 8 million shipments per month, 100 thousands sellers and 21 state-of-the-art warehouses. Despite such an infrastructure as claimed by the company, the consumer complaints specially during Corona Pandemic have been suggesting that the company has been adapting to unethical business practices. Some of the facts as revealed in the analysis are shocking indicating misappropriation of consumer's money and the question arises as whether it is a financial scam?
One
can find several complaints/feedback/ adverse comments about unethical business
practices of M/s. Flipkart in social media like Twitter, Facebook etc. Initially three
cases were picked up for study and one thing has been commonly observed in all the
three cases is that Flipkart is illegally attempting to collect money from the
consumers and seems to have been utilizing the funds for illegal gains. However, during the process of publishing the article, more complaints kept coming and hence these will also be included. The number of complaints being reported in the social media does not limit to these cases only. The total cases included in this article is now eight (8). Except one complaint, all other complaints were sent to the company for their comments and if possible to resolve before this post gets published on 27th June 2020. It is rather surprising that company has neither provided any resolution to the complaints nor provided any comments till the time of its publishing on 27th June 2020.
Out
of the first three examples, case No. 1 has been closely monitored and the author has been actively assisting the consumer to get a satisfactory redressal to his grievance. Hence, the author is well aware of deficiencies in
services of Flipkart and HDFC Bank and how the consumer felt woes of such
unprofessional approach and that too, during corona pandemic.
Similarly in case No. 2, the consumer was being supported by author through twitter.
In case No. 3, the consumer could not get redressal despite his best follow up
and was compelled to send a legal notice to Flipkart.
Case No. 1
Mr. Ashish Virmani,
Faridabad
The
consumer is working with an IT company where Work From Home was conceptualized to ensure continuity of discharge of official duties and responsibilities. He
placed an order for an AC of LG brand required to facilitate him for his
efficient discharge of duties and responsibilities. The Order ID No. OD118716936194944000
was placed on Flipkart on 24th May 2020 along with payment of Rs.
32,825/- through HDFC credit card. The
AC was received in a sealed box on 30th May 2020 with an advisory
that the AC would have to be installed by their authorised brand technician
otherwise the product warranty shall lapse and no return/refund shall be
entertained if the box is opened by the consumer and company would not be even
responsible for its content of the box for shortages/ genuineness/ defects/ damages
etc.
The consumer had been following up rigorously with Flipkart and LG for its installation. However, despite best follow up, the box of unknown content was lying in sealed condition till 5th June 2020 when the consumer was compelled to seek cancellation of order (as its return window was also supposed to be available till 9th June 2020). The Flipkart accepted cancellation of order only on 8th June 2020 and that too after best follow up by the consumer. It was shocking to the consumer that the return pick up was promised as 26th June 2020. The consumer finally sent a notice stating the box of unknown content shall be lying at the cost and risk of Flipkart as it was still in a sealed condition and its content being unknown and the consumer residing in a small rented accommodation and hence the consumer cannot ensure keeping the box in safe condition due to threats like theft, flood, earthquake or any other reason beyond his control.
Since the payment was made through HDFC credit card whose statement dt is 14th June 2020, the item need to have been picked up by Flipkart immediately with refund process initiated and completed by 13th June 2020 so that the amount does not reflect in the statement for payment. He continued his follow up but the company finally gave date of 15th June 2020 for its pickup ignoring the contentions made to Flipkart in his follow up mails that the statement date of his credit card is 14th June 2020 and the content of the box are unknown to him. Meanwhile the consumer also mailed charge back request to HDFC for reversal of transaction. HDFC remained unresponsive. The sequence of dates as stated above indicates that Flipkart ensured to let statement date to pass off so that consumer is troubled financially during pandemic. The product was picked up only on 15th June 2020 despite knowing 14th June 2020 being the statement date. It is to be noted that LG confirmed in writing to the consumer that all its service centres were closed and it was not doing any installations. Why did Flipkart collect money for an AC when there was nobody to install it? Any amount that shall be refunded after the due date of statement date shall remain with HDFC Bank unutilised for several months depriving the consumer to get essential items because of funds being locked up with HDFC Bank. HDFC Bank after reminders responded “we request you to effect the total amount due to payment towards your credit card statement to avoid bank charges in your card account”
The
consumer was advised by the author to maintain communication with HDFC also to
get a relief. However, the HDFC Bank initially was unresponsive and finally the reply received by the consumer was further shocking. The HDFC Bank insisted to pay the amount
latest by due date of payment which incidentally was 3rd July 2020
and asked the consumer that the refund shall get adjusted only in the next
billing cycle even if it is received from the Merchant before the due date of
payment. This part of the process indicates that Merchant/ Banks are operating
with unethical businesses. How the credit card issuer bank can state that the
refunds are not considered as payment towards credit card. How it matters
whether the payment is made by the credit card holder or the Merchant by way of
refunds. The total amount payable as on date of payment should get reduced by
the amount received from Merchant as refund and if received before due date of
payment, the consumer should be required
only for the balance amount if any after adjusting the refunds received. The
relevant paragraphs of his mail to Flipkart is quoted below:
“4. The Statement date of my credit card
is 14th June 2020. Any amount refunded thereafter will lead to significant
financial loss to the consumer as it will be lying with the credit card issuer
from the date of a credit back to my credit card account. It means, the money
will be lying with the Credit card issuer for several months and at the same
the time I shall continue to lose even the SB interest. The SB rate of the
interest of my SB account itself is 7% per annum. In addition to the loss of
interest, the amount shall also remain blocked with Flipkart till your refund back
to the credit card account is credited back and thereafter it shall be lying
unutilized with the credit card issuer and the consumer will continue to bear
brunt of Flipkart's lethargic and an unprofessional attitude that too when the
country is facing corona pandemic resulting in financial setbacks.
5.Whereas the amount shall be lying un-utilized, I will have to make the
payment of credit card as per statement scheduled to be received on 14th June
2020. If I don't make the payment of the amount blocked by Flipkart to the
credit card issuer, the credit card shall be charging heavy interest on the
previous purchases as well as future purchases besides charging other financial
penalties. Even if you agree to bear such losses by Flipkart as conveyed by Flipkart
through telephonic communication of today i.e 12th June 2020, I am going to be
stamped by the bank as defaulter affecting my credit rating, which I cannot
afford to be and that too due to the unprofessional business conduct of
Flipkart.”
(Shockingly
the amount of appox 32,825/- is likely to be blocked during economic slowdown
and pandemic prevailing across the world including India by the unethical
behaviour of HDFC Bank at least till 3rd August 2020 or thereafter
depending upon his shopping if any during this period due to unprofessional and
unethical conduct of Flipkart and may be non-existence of any guidelines of RBI
to address such financial indiscipline of the Merchants and Banks)
Case No.2
Mr. Anirban Paul, from the District Coochbehar of West
Bengal feel cheated by the Flipkart. (The order ID of the consumer is OD118664380305913000)
As per his experience and details
provided by him to the author, he had ordered a laptop on 18th of May, 2020 along
with payment of Rs. 28,990/- which was made
though upi transaction. The first delivery date was given to him was of 24th
of May, 2020. Flipkart could not deliver the product on or before 24th May,
2020. Flipkart extended the delivery date till 3rd of June, 2020. But again
they failed to deliver the product. The customer care could not help the
consumer except giving hope and hope. The consumer failing in getting any help
complained at NCH (National consumer helpline) and simultaneously continued to
post his issue on social media (Facebook and Twitter).
After posting many times on social
media, Flipkart informed the consumer that his ordered product cannot be delivered
and advised him to cancel the order. The consumer on advice of Flipkart and all
his efforts going futile in getting the delivery, cancelled the order after
waiting for almost one month. The consumer was further advised that the payment
made by him would be credited back within 3-4 business days though a telephonic
conversation. However, the refund process has not been even initiated despite
lapse of 7 business days.
(Shockingly,
the consumer neither has been supplied with the product nor the amount refunded
of the payment made to Flipkart on 18th May 2020)
Case
No. 3
Mr. Ravi Jangra, Bahadurgarh, Haryana (Order ID: Order no. OD118173611491226000 dtd.
22nd March 2020)
The consumer’s email dtd. 17th June
2020 as received is quoted below:
“1. I purchased a Samsung Galaxy S9
(Midnight Black, 64GB) mobile phone with order ID OD118173611491226000 on 22nd March 2020, in an exchange offer where I exchanged with
Galaxy S7 edge (IMEI 357327074151727) and paid an amount of Rs. 13,749 through
online mode from my credit card.
2. Due to the outbreak of coronavirus and
national lockdown, I did not receive my order on promised date by 26th
March 2020 and a new date of delivery on or before 15 May 2020 was assigned to
me.
3. On 5th May 2020 item was dispatched through
Ekart Logistics (FMPP0462646390). And on date 13th May 2020 it arrived at
Flipkart Facility Centre, Gurugram.
4. On 15th May 2020, again I did not receive my
order and the new delivery date assigned to me was 29th and then 30th May 2020.
To be noted that item was still lying at Flipkart Facility Centre, Gurugram as
per tracking system.
5. In between 15th to 30th May
2020 I raise my issue so many time with Flipkart support because support person
told me some reasons
a. that they are not delivering this item
(Non-essential item) in my area pin code.
b. Exchange services are not working.
c. That Logistics team is working with less
number of staff.
d. That they must sanitize each and every item
for Safety issues.
e. Due to national lockdown, they need more time to
arrange resources to deliver my item.
Note:- Here I want to tell that at the same
time they told me these things when I place a new order of same item (with
exchange) with same seller take 3 days to be delivered at my home.
6. On 30th May 2020, again I did not receive an
item and I raised a complaint with Flipkart support team where I
was advised to wait till 4th June 2020 and was said that I can
expect the delivery on the same date. Same day I also file my complaint on
INGRAM Docket Number: 2032260.
7. On 4th June 2020, I was asked for one more
additional day i.e 5th June 2020 by 2.00 p.m. in between I raise my complaint
on twitter as well.
8. I raise my issue on 4th June
2020 twitter and then Flipkart Social Media Team person Sushmita
ManikPuri contact me & she ask me to give her 24 Hour to communicate with logistics
team and revert back to me.
9. On 5th June 2020, again a new date of delivery
8th June 2020 was provided. In continued scenario, Flipkart provided me with
new dates of 9th June,11th June 2020.
10. On 7th June 2020 Flipkart Social Media
Team person Shushmita ManikPuri called me and tell me that logistic team is
unable to deliver my item because of some issue (they never told me what
issues).
11. On 10th June 2020 I receive an email from
Flipkart that the delivery Date is again changed to 19th June
2020.
12. On 12th June 2020 I contact Flipkart
support team and request Flipkart agent to transfer my call to senior support
person when I tell him about my issue and ask him some question then he told me
that from 2nd June our all services are working properly there
is no shortage of men power there is no restriction from government he also
agree that there is no reason to stop delivery of my item.
13. From
15 May to till date I sent emails and register my
grievance by several other means such as (Twitter and Flipkart support) but all
effort went into vain.”
(Is it not shocking to see that the
consumer has not received the product till date despite payment made on 22nd
March 2020?. Further developments as brought out in Part 2 of the article shall be further shocking as while no refunds has been made so far, the alternative order for the item placed on Flipkart at more than Rs. 30,000/- was also got cancelled after three days promising refund of this order by 9th July 2020)
Analysis and Recommendations
1. Even though social media have got numerous complaints against Flipkart, the three cases could be analysed, assisted as it was not found feasible to contact more consumers. However, the cases being received during the time of writing article in this blog, were also sent to the Flipkart for their possible resolution.
2. In all three cases as above, the common illegality that has been observed is keeping consumers' hard earned money for longer / indefinite period. This is especially hard on consumers when the entire world including India is reeling from economic slowdown and unemployment/pay-cuts owing to covid-19 pandemic. On one hand, the Government has been emphasizing on liberal views for the citizens and on the other hand, companies such as Flipkart have been doing illegal activities like playing with consumer finances. The consumers were so tired with Flipkart that even a hashtag was created with #UninstallFlipkart and #ShamelessFlipkart on social media like Twitter. The company Flipkart seems to have played an irresponsible business house during Covid-19 Pandemic.
3. In the case of HDFC Bank, it an act of unethical/unprofessional business practices as the amount refunded by the Merchants are not taken as payment to the credit card if it is received even before due date of payment. The author or the consumer could not find any terms and conditions of HDFC Bank where it prohibits to make reversal or adjustment of the amount in the due amount if received before due date of credit card account. Reserve Bank of India is requested to kindly intervene in the matter and come out with appropriate regulations including timelines and penalties for not adhering to as the act of the credit card issuers leads to misappropriation of funds. Similarly Department of Consumer Affairs is requested to kindly mandate business houses with timelines and penalties if not adhered to for return of products and refund back to the consumers. At present it is on whims and fences of both i.e the Merchants and the Banks or credit card issuers.
4. Flipkart has adapted to unfair business as it was well aware of the fact that the due date of statement is 14th June and should have complied to the pick up of the item from consumer's premises well before 13th June 2020 as the cancellation request was of 5th June 2020. The consumer was forced to cancel the order as the AC was not getting installed by any of the agency like Flipkart, LG. LG even expressed its inability to install and no firm commitment was forthcoming from Flipkart and LG. It is indicative of intentional act as there is no reason of not picking up the item before due date of statement and effecting refunds. Now the technologies are available but there is no will of the Merchants and the Banks to adapt to ethical businesses. As in the case No. 3, the consumer has made the payment in March 2020 and still no refunds have been made. Situation with the consumer in Case No. 2 is also the same.
The article shall be sent to all the stakeholders including Department of Consumer Affairs, Reserve Bank of India. As a codal formalities, the final article prior to it is sent to the Authorities of various stakeholders including media and social media, a draft of this article is being sent to the Flipkart as well as HDFC Bank to enable them for a proactive approach and take corrective action in all these three cases particularly and submit their comments/ feedback to include in my final article which is scheduled to be published on 27th June 2020. Comments/ feedback received latest by 27th June 2020 shall be incorporated in the article. The final article published in the blog shall also be sent Reserve Bank of India, Ministry of Finance, Department of Consumer Affairs, Print and Electronic Media as well as Social Media for wider awareness.
Reserve Bank of India is requested for framing out regulations to be adhered by the banks/ credit card issuers for crediting of refunds immediately and effecting the amount to be adjusted against due payment if it is received before due date of payment of credit card dues.
Department of Consumer Affairs is requested to frame regulations for making returns / refunds/ replacement within definite time frame in the interest of consumers with penalties to be paid by the Merchants if not adhered to.
(Part 2 of this article containing some more cases shall be published separately in this blog by 30th June 2020)
Reserve Bank of India is requested for framing out regulations to be adhered by the banks/ credit card issuers for crediting of refunds immediately and effecting the amount to be adjusted against due payment if it is received before due date of payment of credit card dues.
Department of Consumer Affairs is requested to frame regulations for making returns / refunds/ replacement within definite time frame in the interest of consumers with penalties to be paid by the Merchants if not adhered to.
(Part 2 of this article containing some more cases shall be published separately in this blog by 30th June 2020)
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