How Branded Products are Cheating the Consumers

In the process of growth of an economy like India, the level of income of the people, though unevenly, has also been continuously increasing. The increased level of income of the people has a significant impact on their consumption levels. In the process, not only does the demand for existing products increase but at the same time people prefer to shift to better quality products. One can, therefore, notice that industries per-taining to the ‘consumer goods’ sector are making rapid progress and also bringing out new products to attract the consumers. This is true for durable consumer goods as well. With constant and consistent improvement in technology, the process gets further reinforced. However, an important question that needs to be answered and looked into objectively in this context is whether the consumer is the ultimate beneficiary.

For quite sometime, the convention that existed and the commonly believed notion was that the consumer is ‘sovereign’. The consumer is supposed to decide not only as to what to buy but at the same time also exercise his choice regarding the particular variety or brand of a product that he should opt for. This, however, is not true. The fact of the matter is that the thinking and behaviour of the consumer, by and large, is influenced and shaped by various modes of demonstration, specially the advertisements on television screen. In other words, it is the supplier or the producer that decides as to what the consumer should purchase and consume. It is thus the producer’s sovereignty rather than that of the consumer which directs the consump-tion behaviour of the consumers. In the process, the big companies and multinationals, through their incentive-oriented schemes, easily succeed in attracting customers for their products.

The big companies and multinationals, therefore, not only dominate the market but they also influence and mould the consumption pattern of the majority of consumers. This situation has come to stay and, therefore, the producer’s sovereignty has to be acknowledged in determining the consumption pattern of the consumers. The noted American economist, Professor J.K. Galbraith, has aptly referred to this situation as ‘revised sequence’.

There is, however, nothing wrong if the big producers and multinationals significantly influence the consumption pattern of people in society and orient the same to their advantage. The difficulty and cause of worry is that many a time these suppliers and producers, beyond the period of guarantee/warranty, do not provide or do not have a proper mechanism for ‘after-sale’ service which causes tremendous difficulty and tension to the consumer. There remain many things hidden which they do not disclose to the buyers and at times, even if they have provision for ‘after-sale’ service, the terms and conditions regarding the ‘Annual Service Contract/Annual Maintenance Contract’ are not correctly explained to the consumers; in believing them the ‘Contract/Agreement Form’ is signed by the consumer in good faith that ultimately lands him in a difficult situation for which he hardly finds any remedy as he has already signed the ‘Agreement/Contract Form’. It is extremely important to point out in this context that the ‘Agreement/Contract Form’ is printed in such small letters which can be read only with the help of a telescope.

Such a situation leaves ample scope for the big companies to cheat the consumer.

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The author himself is a victim of two well-known companies of the country whose products are advertised several times daily on the television screen. Of the two specific companies, one is Kent RO Systems Ltd., producing Kent Mineral RO Water Purifier. This company has entered the market in a big way, since pure water is the utmost need of everybody. Under Indian conditions, keeping in mind the per capita income of the people, it is a costly equipment as it costs over Rs 15,000. Still there is considerable demand for the product because in absolute terms a substantial number of people can afford to buy it. After its installation, the concerned dealer provides service for ‘one year’ without any charge or payment, as the said facility is reported to be provided by the company. However, if you are interested, as one ought to be, to ensure its proper maintenance, Annual Service Contract/Annual Maintenance Contract becomes essential but in the city of Varanasi this facility is not available, although a number of individuals and institutions have got installed the said water purifier (Kent Mineral RO). The author had to approach their Noida office to provide a Service Centre in the city of Varanasi but was depressed to learn and to be advised that for any problem the authorised dealer can be contacted and that for every visit the ‘technician’ is required to be paid a sum of Rs 200. However, the concerned dealer did not indicate as to during what duration the charge of Rs 200 for the visit will not be claimed if the problem occurs again during that period. The consumer/customer in a way is at the mercy of the supplier/company. These important aspects are not disclosed at the time of the purchase of the water purifier (Kent Mineral R O), though the authorised dealer at the time of its purchase assures verbally to the purchaser that all problems shall be attended to. This is an extremely unfair practice on the part of the authorised dealer/company.

The other product belongs to the category of entertainment industry that has captured a substantial portion of the market and is famous with the brand name of ‘Tata Sky’. By and large, Tatas enjoy a very good reputation in the business world and are known for their values and business ethics but the author has a very bitter experience with the employees of Tata Sky insofar as the ‘after-sale service’ is concerned. To begin with, they did not disclose that they have provision for ‘Annual Service Contract’ but when the author had lot of problems with the performance of Tata Sky; he approached them through e-mail several times. It was at this point of time that he was advised by a lady employee from Bangalore on telephone that instead of approaching the office of Tata Sky time and again, it would be appropriate and better to go-in for the Annual Service Contract (ASC) by making a payment of Rs 500 annually. The author was also assured telephonically that under the ASC the ‘visits’ from the employees of Tata Sky as also the replacement of ‘digicom’, if required, will be free of cost. This was logical and convincing. Hence, the Annual Service Contract (ASC) became effective from June 9, 2009 when the payment of Rs 500 was made for the ‘contract’. A local employee of Tata Sky who got the ‘Contract Form’ signed also confirmed and repeated what was communicated to the author telephonically from Bangalore, namely, that ‘visits’ and the ‘digibox’ are covered under the ASC and that the charges, if any, are to be paid only for replacement of any equipment (other than the digibox) or any part thereof. At the time of signing the ASC, the author was also advised to lodge the complaint, if any, with the Lucknow office of Tata Sky. This too, in a way, was part of the ASC. Needless to say, the author signed the ASC (without reading the same as it was printed in very small letters and therefore practically illegible) in good faith, keeping in view as to what was communicated on telephone from Bangalore and thereafter confirmed by the local employee of Tata Sky, as referred to above.

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The author, however, experienced a very ugly and painful situation on October 9, 2009, when Tata Sky was not giving the required perfor-mance. To begin with, the author was informed by the local staff of Tata Sky that the office from Lucknow has been shifted (reasons not known to anyone) and that the complaint now has to be lodged at their Chandigarh office/centre. Following the complaint, the person from Tata Sky came in the evening of October 10 (after having contacted him three times on his mobile phone) and he corrected the ‘dish alignment’. In the process, no part was changed and it only involved his ‘service’ which was a part of the ASC. However, to the utter surprise of the author the following day an SMS on mobile was received that a sum of Rs 350 has to be paid as Service Charge as if the ASC has no relevance in the process. On approaching the Chandigarh centre on October 12, 2009, so as to be explained as to why the amount of Rs 350 is to be paid, specially when no equipment or the part thereof has been replaced and that only the ‘service’ for alignment of the ‘dish’ has been provided, a very peculiar and funny reply was given, namely, that ‘visit’ for attending any problem connected with the ‘digibox’ is free and that any other ‘visit’ would cost Rs 350 and this has got to be paid, failing which the connection for Tata Sky would be disconnected for non-payment. Messers Tata Sky till date have not clarified or given a satisfactory reply as to what the word “SERVICE” means or constitutes under the Annual Service Contract for which a payment of Rs 500 has already been made so as to avail the service during the period of ‘contract’.

In view of the above, it is extremely important as also relevant that the government should make it obligatory for the producers/suppliers/companies of the branded products to make arrangements for providing the ‘service’ locally by making it mandatory to establish a ‘Service Centre’ for each product, failing which the sale of the product in the area (in which the Service Centre does not exist) should not be permitted, rather it should be banned. In other words, establishment of the ‘Service Centre’ should be a pre-condition for selling the branded product in the area. Secondly, the charges for the ‘Annual Service Contract’ should be moderate and reasonable and that the same should be regulated and monitored, if required. Further, the word ‘service’ should be clearly defined so as to include every aspect of the service necessarily required for the maintenance of the product. Additionally, the ‘Contract/Agreement Form’ should be printed in a manner which should be easily legible so that things may not remain ‘hidden’ from the consumer to the benefit of the supplier/company. With increasing consumerism, all these aspects are important to protect the consumer’s interest and that of the society as a whole, so that big business houses/producers are not permitted to exploit the consumers in an unfair manner.

The author is an Emeritus Fellow of the UGC, Department of Economics, Banaras Hindu University, Varanasi.