Ola Electric may be headed for a rough ride. With the electric two-wheeler major failing to address over 10,600 consumer complaints over the past year, the company may face class action suit by the consumer affairs ministry under the Central Consumer Protection Act (CCPA).
Consumer affairs secretary, Nidhi Khare told Fe on Wednesday that the ministry has initiated a class action against the company by issuing a notice to Ola on October 3 with regard to deficiency in services, misleading advertisement, violation of consumer rights, and unfair trade practices. Ola has been given 15 days time to respond and if the ministry is not satisfied by the responses and action taken by the company, class action will be initiated.
“This case is fit for class action because of violation of consumer rights, unfair trade practices, misleading advertisements and deficiency in services,” Khare said, adding that Ola will be given a fair and reasonable time to provide their side of the story.
She said that the company will be pushed for refunds and for compensation for deficiency in services to consumers wherever possible, failing which action will be taken.
The nature of grievances reported against Ola in the past year is on 19 grounds ranging from charging during free service period/warranty, charging extra than promised, to unsatisfactory redressal, manufacturing defects, and wrong promises and information given about the vehicle.
Though the CCPA empowers consumer affairs ministry to levy a penalty of up to Rs 10 lakh for misleading advertisements under class action provision, it can go ahead and file a suit in either a civil court or the National Consumer Disputes Redressal Commission (NCDRC), on behalf of the consumers. In the latter case, the compensation for the consumers can be much higher than Rs 10 lakh as it would be aggregated on the basis of compensation sought by different consumers.
In the past, cases like misleading ads by coaching institutes, sale of non-standard consumer electronic products, and misleading claims for LED bulbs have been treated as class action matters by the consumer affairs ministry.
Further, in a case during COVID, the ministry had directed the travel sites to refund the price of air tickets canceled owing to COVID lockdown.
“Such actions were more than a penalty and got consumers their due. A refund of Rs 1,454 crore was made to consumers,” Khare said.
In the case of Ola, she said that there will be a detailed investigation for deficiency in services to know why the product is giving repeated and repeating problems. “Simultaneously, CCPA is also expanding its scope to cover the electric mobility sector and examine whether other companies in the segment also have similar nature and volume of consumer complaints,” Khare added.
The issue of consumer grievances related to Ola scooters, escalated on Sunday after comedian Kunal Kamra in a post on X criticised founder Bhavish Aggarwal over the poor service quality at its service centres. In response, Aggarwal hit back at Kamra stating that if he was so concerned about the complaints he should come and help out for which he will pay him more than a paid post.
