World Consumer Rights Day: 53% Households Refused Replacement, Compensation for Defective Product in Warranty

In India, a survey shows that at least 53 per cent household consumers have one or more inherently defective products, where the manufacturer has refused to replace the product or provide compensation despite the product being in warranty.

According to the survey, conducted by social media platform LocalCircles, 86 per cent consumers also want the Central Consumer Protection Authority (CCPA) to create an easy mechanism to report such cases. On World Consumer Rights Day on March 15, India is focusing on how addressing grievances can be made more consumer-centric.

The survey further shows that 29% household consumers have three or more high-value products within warranty, which are inherently defective. One of the top issues that consumers have regularly shared is non-existent product recall or consumer compensation or replacement in case of inherently defective products.

What is the ground reality?

Consumers have shared that replacement of a defective product is rarely the case. In one successful case cited by a consumer, who received a new laptop with a faulty camera, the consumer had to go through numerous calls and four visits by the service technician over a 60-day period to try and repair the camera and, only after all else failed, the laptop was finally replaced by the manufacturer.

This case was more of an exception and, according to multiple consumers, brands despite knowing that they have a product issue tend to avoid replacing it and prefer providing repairs. The question of contacting other users about the same product does not arise.

One exception to such practices is automobiles where due to safety considerations, brands reach out to consumers to get a component or accessory changed at a dealership if an issue is found with the original one.

If you study this issue in detail, however, you will find that the recall process is not mandated for defective products in India, where there is no safety consideration.

How was the survey conducted?

The survey has attempted to find how consumers deal with defective products, particularly those of high value. It asked questions about the number of high-value products purchased by a household in the last five years, which were found to be defective.

At least 55 per cent households said they have at least one high-value product that was found inherently defective during the warranty period. Despite the law being in place, consumers most often don’t get a resolution without legal help and such consumers have not been able to get a replacement. At least 74 per cent consumers reached out to the manufacturer/seller/service provider but only 21 per cent got a replacement or refund in the last five years.

The survey also wanted to find out if the consumers were able to get a product replacement or compensation for the defective product. At least 53 per cent of households surveyed, who had one or more high value defective products in the last five years, could not get a replacement product or refund from the manufacturer despite the product being in warranty.

The survey also asked consumers about steps taken by the government to address their grievances. The Consumer Protection Act, 2019 has provisions for the recall of defective and unsafe products. A majority of the respondents want an easy mechanism for consumer safety and addressing grievances.

What does the Consumer Protection Act say?

Under the amended Consumer Protection Act, 2019, all parties – manufacturer, supplier, seller – are liable for any defective product sold to a consumer. Under the law, endorsers or promoters are also liable for promoting a faulty or substandard product.

Product liability (of a manufacturer, service provider or seller) to compensate a consumer for any harm or injury caused by a defective good or deficient service is among the six consumer rights defined in the Bill.

To claim compensation, a consumer has to prove refusal, after selling goods or rendering services, to take back or withdraw defective goods or to withdraw or discontinue deficient services and to refund the consideration, if paid.

All this has to be done within the period stipulated in the bill or cash memo or receipt. And in the absence of such stipulation, within 30 days. The letter requesting return or replacement of a product has to be sent to the seller or manufacturer to either replace the product with a good product or return and refund the amount paid. If this does not work, consumers have the option to go to the consumer court.

The consumer can specifically mention in the letter to the seller or manufacturer about the losses or damages incurred due to the defective product and can ask for payment of damages within a stipulated period. Through this letter, the sender can also ask for remedies like removing the defects, replacing the product with a new one, refunding the amount paid for the product, and paying the expenses or losses incurred by the sender due to defective product.

Most Indian consumers generally only evaluate the product features or functions, prices, discounts, look and feel before making their purchase with limited attention to service and support. In a previous survey in 2022, LocalCircles had found that the real battle for some consumers begins when they find the high-value product they bought is not functioning properly and has an inherent defect. Aware consumers avail warranty while many others get their products repaired outside. Many others just end up using defective products unless they become completely non-functional.

What is the need of the hour?

The CCPA must lay out a mandatory standard process for product recalls that all brands must follow, especially for products like automobiles, gadgets, whitegoods and any such serviceable products. In addition, it must be more vigilant to consumer complaints so that they can observe potential cases of defective products quickly and must take suo motu action. An inherently defective product is far more damaging for the brand in the long run as it breaks consumer trust and, hence, faster identification can drive quick corrective action and consumer retention.