The Consumer Always Comes Last

A pril 1, 2009 could well turn out to be a red letter day (due apologies to Prakash Karat) for Indian consumers. Following a directive from the Reserve Bank of India, you and I can withdraw money from any ATM anywhere in India without having Rs.20 to Rs.50 deducted from our accounts. Banks opposed it fiercely, even issuing threats that they will be reluctant to expand their ATM networks if they can’t impose ‘transaction’ charges. For a change, their lobbying efforts with the RBI have failed, and the latest move will be a huge convenience for Indian consumers.

This is a rare victory for the Indian consumer. Even now, banks have surreptitiously imposed such crazy conditions that an average bank account holder will, more often than not, pay extortionate charges. Take the little known policy whereby a bank account holder cannot access her own bank’s ATM more than thrice or four times a month without paying ‘transaction charges’. The banks say this is to discourage unnecessary crowding at ATM counters. Years ago, the same banks used the same logic to deny account holders access to a bank branch. Account holders were encouraged to use ATMs and actively discouraged (sometimes even prohibited) to use their own bank branch for basic transactions. Consumers were told then that unlimited access to ATMs will be better than waiting in a queue at a branch. But then, unlimited access to ATMs was soon restricted. This is just one example of how banks routinely fleece their consumers. Anyone with a credit card or a deposit in a private or multinational bank will have horror stories.

It is not just banks. Telecom companies, passenger car makers, FMCG companies, commercial aviation companies, insurance companies… just about any enterprise in India with an interface with a consumer ends up fleecing her. Sample a few more examples. A study found that more than 80% of the new electronic meters installed by a private electricity distributor in Delhi were so hi-tech that they ran faster than actual electricity consumption! Of course, the hapless consumer has to first pay an inflated bill and then argue because his power will be cut off otherwise. From out of the blue, private airport operators in Bangalore and Delhi started charging a Rs.200 plus fee from every passenger. This was never a part of the lucrative deals they had signed with the government. And yet, the Civil Aviation ministry – tasked with protecting the interests of the Indian air traveller – connived with private operators to loot the Indian consumer.

In theory, the Indian consumer can approach a consumer court for relief. But in practice, large companies and their battery of lawyers have made the process a frustrating grind for the consumer. Consumer courts were formed to ensure that cases can be settled without lawyers. That basic philosophy has become a joke. In any case, even if a consumer court passes an order favouring the consumer, other Indian courts now promptly – and distressingly – provide relief to the company. Very soon, consumer courts could resemble the average Indian court, where a case might be settled after the litigant has died.

Sure free access to ATMs is a great move. But without much, much more, it could well be an April Fool gesture!

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The Consumer Always Comes Last