While online sales of products and services have grown exponentially, consumer complaints too have also risen almost as fast. Rohit Kumar Singh, Secretary, Department of Consumer Affairs, spoke to Sandip Das on a range of initiatives taken to protect consumer interest.
Q: How has the department sought to address rising consumer complaints, especially in the online marketplace?
The power balance between consumers and sellers has changed dramatically over the last three to four decades. Earlier, we were buying stuff from mom-and-pop stores and there was a certain trust between the sellers and consumers. If something went wrong on products sold, the sellers would readily address the issue. Now with big shopping malls and big players in the offline and online marketplace, especially with the entry of Amazon and Flipkart, the power balance between consumer and sellers is skewed.
In the malls there is still some face-to-face interaction between consumers and sellers. In the online space, however, consumers can’t even see the products and have to rely on advertisements. Misleading advertisements in online places is a growing menace and we are making efforts to curb it. The issue is covered under the Consumer Protection Act (CPA), 2019. This problem of misleading advertisement will further get extenuated with artificial intelligence. AI directly target the consumers based on intelligence gathered on their preferences and bombard them with product information. Then there are reviews about the products and it’s doubtful if these are authenticated. Fake reviews about the products is a big menace and has to be curbed.
Q: What has been the outcome of the steps initiated to deal with “dark patterns” employed by the companies to lure consumers?
We have identified 13 dark patterns (manipulative marketing practices) in consultation with the industry. There are firms which would nudge consumers to buy additional services, for instance, by inducing them to buy travel insurance while booking air tickets. These are also referred to as subscription traps. Thee dark patterns include false urgency, disguised advertisement, basket sneaking, nagging, confirm shaming, forced action, subscription trap, trick question, interface interference, drip pricing, SaaS billing, bait-and-switch. These patterns are illegal under CPA. For identification of dark patterns, we recently carried out hackathon and Indian Institute of Technology, Kharagpur has come up with a software which can identify dark patterns. We have to be dynamic in dealing with these menaces.
Q: What are the measures being taken to curb surrogate advertisements?
We have asked alcohol companies who are using surrogate advertisements for selling their products. Alcohol makers have informed that they also sell glasses. Thus we have asked these companies to furnish revenue from these non-alcoholic products and proportion of advertisement expenses on these products.
Q: How do you ensure resolving consumer disputes within a specific time period?
Often there are differences between product features promised through advertisements and the actual products. Many a time, there are differences which lead to grievances. If something has gone wrong, one can approach the National Consumer Helpline. We are getting more than 1,00,000 complaints monthly. These complaints have to be resolved. If it is still not resolved people want to go to court. We have launched online link filing cases on the consumers courts through eDaakhil where consumers can file complaints without being physically present in the consumer courts. Now, all the consumer courts are empowered with video conferencing facilities and consumers should not be forced to go to courts.
Where the consumer normally works and resides is the basis of hearing of the consumer court cases. The other party has to come to that location for hearing. Currently there are around 5,40,000 cases pending in consumer courts across national, state and district levels. Last year, all India disposal of consumer courts was 100%.
Q: What are the sectors where the instances of complaints are higher?
We did an analysis and found out that one third of these pending cases in consumer courts are relating to the insurance sector, followed by real estate and banks. We have written to representatives of these sectors. Insurance has systematic issues as 1,60,000 cases in consumer courts are relating to insurance. We had discussed with finance ministry officials and judges of the consumer courts to reduce these cases.
Q: What is the status of proposed national e-commerce policy?
The policy is ready and the fundamental principle is that If you are a marketplace you can sale your products. It is conflict of interest. For instance, Amazon can’t sell its own products as the Foreign Direct Investment policy does not support multi brand retails. It is indirect violation of FDI norms. There has to be a clear distinction between a physical market place and web store. FDI in multi-brand retails is not permitted. Any sale of its own products by a platform online are violation of FDI norms. Both has to be consistent. In the hybrid model of selling, the line between offline and online marketplace has blurred.