As disposable income increases, people have started using more financial instruments. And as the number of transactions and operators increases, so does the friction between consumers and companies.
Most complaints (almost 20%) that the National Consumer Helpline gets are related to the banking and financial services sector—loans, fixed deposits or credit cards. One of the main reasons for this is that people fail to do their homework before making a financial commitment.
The good news is that companies have become more responsive. This has helped us in launching an initiative we call Convergence, a forum where consumers and company representatives come together.
A total of 66 companies are now on the Convergence panel; these companies are given 15 days in which to respond to complaints. Out of 630 complaints forwarded to companies under this mechanism in August 2007, they responded to 328, while 114 cases were solved.
There’s also the National Consumer Helpline, set up in the University of Delhi with support from Department of Consumer Affairs. Till August this year, the helpline has taken around 1.2 lakh calls from across the country.
Ideally, companies should be tackling consumer issues, making organisations and initiatives like ours redundant. However, till that happens, consumer organisations come into the picture at various stages.
When they approach us, for instance, we not only tell them where to complain but how to complain (what to tell the company or the ombudsman). If a consumer is being harassed, we tell him what to tell the person who is harassing him.
When it comes to capital markets, however, the complaints redressal mechanism for individual investors is comparatively weak. For one, there is a lack of awareness among investors. For another, regulators are not geared towards small investors.
Yes, investors can approach the courts, but the process is painfully slow and new issues are out of the court’s purview.
By Sriram Khanna, Project Coordinator, National Consumer Helpline
