August 2024

August 08,2024 NEW DELHI: Over 50,000 cases related to real estate are pending in consumer courts, according to the government data. In a written reply to Lok Sabha, Minister of State for Food and Consumer Affairs B L Verma informed about the details of cases pending in consumer commissions relating to real estate. As per the data, there have been 2,44,813 cases filed in consumer courts at national, state and district levels. Out of that 1,94,555 cases have been disposed and 50,258 cases are pending as on July 31, 2024. “The Consumer Protection Act, 2019 provides for three tier quasi-judicial machinery at district, state and central levels commonly known as ‘Consumer Commissions’ for protection of the rights of consumers and to provide simple and speedy redressal of consumer disputes,” Verma said. The Act provides for simplification of the adjudication process in the consumer commissions; filing of a complaint by a consumer in the consumer commission; virtual hearing; deemed admissibility of complaints if admissibility is not decided within 21 days of filing. “Section 38(7) of the Consumer Protection Act, 2019 prescribes that every complaint shall be disposed of as expeditiously as possible and endeavour shall be made to decide the complaint within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months if it requires analysis or testing of commodities,” he said. The e-Daakhil portal has been launched in 35 states/UTs to provide facility to aggrieved consumers to register online consumer complaints in different consumer commissions from anywhere in India, the minister said. Source: Economic Times

August 12,2024 According to FullCircl, as we passed the first anniversary on 31st July 2024 since the implementation of this mandate, a significant event was held to discuss its impacts and progress. The event featured key FCA figures including Sheldon Mills, Executive Director, Consumers and Competition; Graeme Reynolds, Director of Competition; Therese Chambers, Joint Executive Director of Enforcement and Market Oversight; and Dominic Cashman, Director of Authorisations. Abby Thomas, Chief Executive and Chief Ombudsman at the Financial Ombudsman Service, also participated, highlighting the Duty’s impact over its inaugural year, practices worth emulating, and forthcoming priorities. In its first year, the Consumer Duty has fundamentally altered business-customer interactions across the financial landscape, promoting cultural shifts and enhancing competition. The FCA highlighted several achievements such as the sharing of best practices, reductions in GAP product commissions—yielding customer savings—and the introduction of new product lines. Noteworthy improvements in customer experience metrics and clearer customer communications were also emphasized. However, the FCA acknowledged that the Duty has introduced complexities, particularly challenging for smaller firms, with hurdles like fair value assessments and outcomes monitoring needing simplification. The discussion also focused on exemplary practices that should become more widespread. The FCA identified successful firms as those aligning their culture with customer experience, adopting comprehensive approaches to customer impact, and utilising data to understand and meet customer needs effectively. A continuous improvement culture and outcomes-focused monitoring are also crucial. The upcoming period will see a post-implementation review by the FCA to assess the effectiveness of the Consumer Duty, including thematic reviews of specific sectors and products. This review aims to gather insights on the impact and complexity of the Duty and ensure firms are delivering fair value. After a year, the Consumer Duty has proven to be a catalyst for significant advancements in consumer protection and a more customer-focused approach in financial services. Despite these successes, the journey is far from over. Firms continue to face substantial challenges that require strategic use of AI and data analytics to enhance compliance, drive growth, and improve customer experiences effectively. Source: Fintech Global

August 04,2024 The Fact Check Unit of the Press Information Bureau (PIB) has alerted SBI customers regarding a fraudulent message on social media. The scam involves a message purporting to be from SBI, instructing recipients to download an APK file to redeem reward points. This message is not legitimate. SBI never sends links or APK files through SMS or WhatsApp. Do not download unknown files or click on suspicious links to protect yourself from potential scams. Always verify any such messages directly through official SBI channels. If you receive an unusual message or ask for personal information, contacting SBI through their verified contact methods is essentialto confirm its authenticity. Staying vigilant and cautious can help safeguard your personal and financial information from fraudulent activities. “Beware ‼️ Did you also receive a message asking you to download and install an APK file to redeem SBI rewards? @TheOfficialSBI NEVER sends links or APK files over SMS/WhatsApp. Never download unknown files or click on such links,” reads a post from theFact Check Unit of the Press Information Bureau (PIB). Tips to safeguard yourself from fake messages and potential scams 1) Confirm the authenticity of the sender. Official communications from your bank will be through verified channels. 2)Refrain from clicking on links or downloading attachments from unknown or unsolicited messages. 3) If you receive a suspicious message purportedly from your bank, contact the institution using contact details from its official website. 4)Conduct transactions and manage your account only through official apps and websites. 5)Do not share personal, financial, or login details via email, SMS, or social media. 6)Notify your bank’s fraud department about any suspicious messages or phishing attempts. By following these guidelines, you can minimize the risk of scams and keep your personal and financial information secure. Source: Livemint

August 08,2024 A charitable trust specializing in Ayurvedic medicine purchased two pieces of equipment from a dealer for Rs. 56 lakhs. Despite two installation attempts by the manufacturer’s technical experts, the equipment remained non-functional and was incompatible with the existing HPTLC setup. The trust claimed the equipment was defective and filed a complaint with the Kerala state commission. The state commission partially upheld the complaint, ordering the manufacturer to refund Rs. 56 lakhs with 12% annual interest and Rs. 10,000 in costs. Dissatisfied with this decision, the manufacturer appealed to the National Commission. The dealer and manufacturer contended that the complainant, being a public trust, did not qualify as a “person” under Section 2(1)(m) of the Consumer Protection Act and therefore could not be considered a “consumer” under the Act. This rendered the complaint inadmissible. They also argued that the State Commission did not have the necessary pecuniary jurisdiction to address the complaint. Additionally, they claimed that the warranty conditions were limited to 12 months from the date of installation or 13 months from the date of shipment. Since the equipment was installed by the complainant after the warranty period had expired, they argued that the complainant had no legal grounds to seek damages or compensation, and the dealer was not liable for any deficiencies in service. The National Commission noted that the complainant in this case, being a charitable trust, does not qualify as a “person” under Section 2(1)(m) of the Act. Therefore, the State Commission’s order was deemed to be outside its jurisdiction, referencing the Supreme Court ruling in Pratibha Pratisthan and Ors. vs. Manager, Canara Bank and Ors. (2017) 3 SCC 712. Consequently, the National Commission overturned the State Commission’s decision and allowed the appeal. However, the complainant was permitted to seek redress through the appropriate legal forum. Source: The Law Suits

August 07,2024 An Indian government panel tasked with revising the nation’s consumer price index is considering a substantial cut in the weighting of food, according to a person familiar with the matter, a move that could curb inflation spikes in the South Asian nation. The panel, under the statistics ministry, is discussing a proposal to reduce the weight of food in the consumer price basket by as much as 8 percentage points, according to the person, who asked not to be identified as the discussions are private. The food and beverage category makes up 54.2% of the current CPI basket. The CPI is currently based on consumer spending patterns surveyed in 2011-2012, which economists say are outdated and may be distorting the official inflation data the central bank uses to set interest rates. More recent surveys show consumers are spending less of their budget on food than they did a decade ago. Bloomberg Economics estimates inflation in June was 70 basis points higher than it would have been using new weights. A spokesman for the Ministry of Statistics and Program Implementation didn’t immediately respond to an emailed request for further information. The Reserve Bank of India has kept interest rates unchanged for more than a year, and stuck to a relatively hawkish stance given inflation is above its 4% target. Economists surveyed by Bloomberg predict the RBI will likely hold again on Thursday. Food is a big driver of inflation in India given its high weighting in the CPI basket. In June, food prices rose 9.36% from a year earlier, pushing up the headline inflation rate to 5.08%. Excluding food and energy costs, inflation was 3.15%. A revision of the CPI, which currently has some 299 items, would see redundant items such as horse cart fares, prices for video cassette recorders, and costs of audio and video cassettes likely weeded out of the calculation. The government panel is also discussing including consumer electronic products, such as smartphones in the updated index, the person said. The changes to the CPI weights and the base year, which are under consideration now, will likely only be implemented by January 2026. The revisions are based on results of new consumer spending surveys, which the statistics ministry is still finalizing. The entire process is expected to be completed sometime during 2025. India’s Chief Economic Adviser V Anantha Nageswaran, a top official in the Ministry of Finance, last month argued the central bank’s inflation target should exclude food. Several economists, however, said removing food from the CPI target wasn’t appropriate for a country like India. Source: Economic Times

August 08,2024 In a country that still prioritises roti, kapda, aur makaan (food, clothes, and home) over chic iPhones, having too much of the former shouldn’t be a problem, right? Well, though it is not really a paradox of plenty, there’s too much food in a basket that is actually making things tough for common man and the policymakers. We are not talking about the amount of roti and rice on the table that is causing the problem, but India is deep into the trouble of having a high share of food in the consumption basket and the very fact that food price pressures are a big headwind in an economy that has high income inequality. India is set to remain the fastest-growing major economy in 2024, according to the IMF. But remember, it is still a country that has to provide free food grain to 800 million. The Reserve Bank of India’s Monetary Policy Committee, who left rates and stance unchanged for the ninth time, has decided to focus on inflation and support price stability to ensure growth. While economists flagged that food inflation remains a hurdle, the RBI too sounded caution on it. In June, food inflation surged significantly, raising the overall Consumer Price Index (CPI) inflation to 5.1 percent, up from 4.8 percent in May. The spike in food prices, particularly for vegetables, cereals, milk, and fruits, has been a major contributor to this increase. Despite a favorable base effect from last year, food inflation soared to 9.4 percent, driven mainly by consistently high vegetable prices, which have stayed in double digits for eight months. India’s central bank, who along with the government has to ease price pressure in the world’s most populated country, today acknowledged that food inflation pressures cannot be ignored. While inflation in other sectors is under control, food inflation in India has remained persistently high. This is due to the unpredictable nature of weather affecting food production and inefficiencies in the agricultural sector. The government has been actively working to keep food prices low by selling vegetables and pulses at reduced rates, imposing stock limits, and implementing export restrictions. It also has to carefully balance protecting farmers’ interests by avoiding excessively low prices while also ensuring prices don’t rise too high for consumers, particularly the poor. India’s Chief Economic Adviser, V Anantha Nageswaran, suggested in the Economic Survey that the central bank’s inflation target should exclude food. However, several economists disagreed, stating this approach is not suitable for India. A government panel is considering a significant reduction in the weighting of food in the consumer price index (CPI) to help control inflation spikes. According to Bloomberg, the panel under the statistics ministry is discussing a proposal to reduce the weight of food in the CPI basket by up to 8 percentage points. Currently, the food and beverage category accounts for 54.2% of the CPI basket. CPI is currently based on consumer spending patterns from 2011-2012, which economists argue are outdated and might be skewing the official inflation data that the central bank relies on to set interest rates. “First and foremost is the fact that our target is the headline inflation wherein food inflation has a weight of about 46 per cent. With this high share of food in the consumption basket, food inflation pressures cannot be ignored,” RBI Governor Shaktikanta Das said. Moreover, the general public perceives inflation mainly through the lens of food prices rather than other components of overall inflation. Therefore, India cannot and should not become complacent just because core inflation has decreased significantly, Das said. India’s inflation index is heavily influenced by food prices because most people spend a significant portion of their income on food. “India’s share of food and beverage in the CPI basket currently stands at 46% which is much higher than developed countries or even emerging countries like Brazil, China and South Africa where the weight ranges between 20-25%. Even though the share of food in the inflation basket is expected to fall in the new series to ~43% after the 2024 household consumption survey, it will still continue to remain high,” Rajani Sinha, Chief Economist at CareEdge, told ET Online. Developed countries find inflation targeting easier due to the low share of food in their inflation baskets, but it’s more challenging for economies like India, she added. Monetary policy mainly affects demand but struggles with supply-driven food inflation, especially when food demand is price inelastic. While the Economic Survey suggests excluding food from CPI inflation for monetary policy, food inflation cannot be entirely disregarded, Sinha said, adding the central bank must balance its approach, considering both core and food inflation trends and their impact on overall CPI. Seasonal food price fluctuations, like those for vegetables, can be ignored if they seem temporary. Ongoing food price shocks have slowed the process of disinflation in the first quarter of this fiscal year. There is also a significant gap between headline and core inflation. This raises the question of how much emphasis the MPC should place on food inflation, the governor said. Marking a significant departure from earlier meetings, the RBI Governor spent a fair amount of time in flagging the issue of high food inflation. This is important since food inflation remains a burning point for consumers and policy makers alike, Aditi Gupta, economist at Bank of Baroda, told ET Online. “With food inflation remaining elevated for the past few months and a high share of food items in the inflation basket, the transitory supply side shocks in food prices can have a detrimental impact on consumers’ inflation expectations. This is compounded by the fact that a few items of the food basket are exhibiting maximum volatility, with the seasonal impact on prices proving to be much more intrinsic in nature,” she said. Shaktikanta Das today also said high food inflation negatively impacts household inflation expectations, which significantly influence the future path of inflation. After a moderating trend between May 2022 and September 2023,

June 12,2024 The Insurance Regulatory and Development Authority of India (IRDAI) said that general insurance companies cannot reject claims in the absence of documents. The master circular issued in this regard, which is part of the reforms in the general insurance business, will usher in a new era for easy and customer-centric insurance solutions. The comprehensive master circular on general insurance business also repeals 13 other circulars. IRDAI said that it has now become possible to provide easy-to understand insurance products to meet the individual needs of customers, give adequate choice to customers and improve their insurance experience. The circular states that no claim will be rejected in the absence of documents. Necessary documents should be sought at the time of approval of the proposal. According to this, customers can be asked to submit only those documents which are necessary and related to claim settlement. Moreover, retail customers can cancel the policy at any time by informing the insurer, while the insurer can cancel the policy only on grounds of proven fraud. Source: Business League

July 28,2024 Renu Jain, a Bengalurubased software professional and mother of two teenagers, tries to check every box to keep her children healthy. However, last year, when she came across a viral video by Revant Himatsingka—known as “foodpharmer” on social media—warning about high sugar content in Bournvita, she was shaken. “I have been giving Bournvita to my children for years. Not just that, my mother also made me have it every day when I was little,” says Jain. “Wasn’t it supposed to be a health drink—to help children grow taller, run faster?” she asks. Jain is not the only one who makes kids gulp down “health drinks”. Some popular health drink brands are part of the monthly grocery lists of many families. Health experts say many of these brands have been available in India since the 1950s and have established themselves in the minds of consumers as “health drinks”. In India, the challenge of feeding a large, geographically dispersed population, millions of whom are poor, malnourished and unaware of labelling on packs, results in lax public health policies. Even if the policy is strong enough, sometimes the problem lies with its implementation, say civil society activists. “Health drink” labels often mislead consumers as the advertiser misrepresents the nutritional content of the food item, says Dr Arun Gupta, paediatrician and convener of Nutrition Advocacy in Public Interest (NAPi), a think tank. In April last year, it was a child rights body, the National Commission for Protection of Child Rights, that asked Mondelez International India, which makes Bournvita, to withdraw all “misleading” advertisements, packaging and labels. It took almost a year for India’s food regulator, the Food Safety and Standards Authority of India (FSSAI), to order ecommerce players to not use the term “health drink for malt-based drinks” as the food laws of the country do not define the term. From high sugar in “health drinks” to added sugar in baby food to contaminated spices, Indians have had much to worry about what they eat and drink (See box “Eating Away”). FSSAI has to knuckle down to ensure that the labelling is clear, advertisements don’t mislead and the grub does not harm the people. FSSAI did not respond to ET’s emailed queries till press time. A recent report by NAPi, which analysed 50 advertisements of packaged food items across media platforms, found that all of them were concealing information about critical “nutrients of concern” such as sugar, salt and fat. The report also found that 23 out of 50 advertisements used celebrities— film and television stars or popular sports persons—to market the products. The advertisements used attractive visuals and made manipulative claims to position themselves as the best products, says the report. It also said fruits, grains and positive nutrients were used to project a deceptive image of health food. The impact of such advertisements on public health is concerning, especially with the rising rates of obesity, diabetes and other diet-related illnesses in India. Even the recent Economic Survey has flagged unhealthy food, social media, screen time and sedentary habits as a “lethal mix that can undermine public health and productivity and diminish India’s economic potential”. Misleading ads are a huge concern, but do they face consequences? In May 2023, the Advertisement Monitoring Committee of FSSAI reported 32 cases of misleading ads, which were found to be in contravention of the Food Safety and Standards (Adver tisements & Claims) Regulations, 2018. However, an RTI query filed this year has revealed that no action has been taken against these companies even after one year of being found guilty. “There is weakness in the process in identifying what a misleading advertisement is because there is no objective definition in the FSS Act 2006 (which governs India’s food laws). Therefore, it takes years and there have been no penalties,” says Gupta. He adds that the Consumer Protection Act 2019 defines “misleading advertisement” as a product or a service that deliberately conceals important information; however, it has not been applied to food items. “While the FSS Act prohibits misleading advertisements, its regulations do not have the provision to define misleading advertisements based on nutrients of concern,” he says. The Global Food Security Index 2022, managed and published by The Economist, ranked India 67th, on the quality and safety of food, out of 113 countries. Is that a good score for the world’s most populous nation, aspiring to be Viksit Bharat by 2047? India is already known to be the diabetes capital of the world. According to a recent report in The Lancet, the country could be facing an obesity epidemic. Non-communicable diseases account for 60% of deaths in India, says a health ministry report. Stepping up its act, India’s food regulator, in the past few months, has come out with several initiatives. It has ordered all food companies to remove any claim of “100% fruit juices” from the labels and advertisements of reconstituted fruit juices. Such claims are “misleading”, particularly when the major ingredient is water and the primary ingredient, fruit juice, is reconstituted using water and fruit concentrates or pulp, the food regulator said. On July 6, FSSAI approved another important proposal to display nutritional information regarding sugar, salt and saturated fat in bold letters and in bigger font size on labels of packaged food items. The draft notification for the amendment would now be put in the public domain for suggestions and objections. “Along with empowering consumers to make healthier choices, the amendment would also contribute towards efforts to combat the rise of non-communicable diseases (NCDs) and promote public health and well-being,” FSSAI said. H owever, George Cheriyan, who was a member of FSSAI’s expert group on front-ofthe-pack labelling (FoPL), calls it a “sabotage”. “Display of nutritional information in bold letters is just a way to sabotage a more effective and stricter front of the pack labelling, which has proven to reduce consumption of unhealthy foods in several countries,” says Cheriyan. “The labelling already exists. Putting it in bold serves no purpose.” An

July 30,2024 The Supreme Court on Tuesday said the Ministry of Ayush should set up a dashboard so that details about complaints filed on misleading advertisements and progress made on them can be made available to the consumers. The apex court had earlier highlighted the aspect of misleading advertisements being published or displayed in media contrary to the provisions of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and the rules, the Drugs and Cosmetics Act, 1940, and the Consumer Protection Act, 1986. A bench of Justice Hima Kohli and Justice Sandeep Mehta was hearing a plea filed by the Indian Medical Association (IMA) alleging a smear campaign by Patanjali Ayurved Ltd against the Covid vaccination drive and modern systems of medicine. The bench noted that the lack of proper data regarding action taken on the complaints received leaves the consumers helpless and in the dark. “The Ministry of Ayush must set up a dashboard citing complaints received… so that the data comes in the public domain,” the bench observed. It added that the data can also help in addressing the issue of prosecution under the Drugs and Cosmetics Act. The top court was informed that in several states, a number of complaints regarding misleading advertisements were forwarded to other states as the firms manufacturing those products were based there. The bench noted that the number of complaints made by the consumers, which was over 2,500 earlier, has gone down to only around 130 and the main reason appears to be that the grievance redressal mechanism for dealing with such complaints has not been properly publicised. It asked the ministry concerned to look into this issue and file an affidavit within two weeks. The apex court bench also dealt with the aspect concerning manufacturing licences of 14 products of Patanjali Ayurved Ltd and Divya Pharmacy. The Uttarakhand State Licensing Authority (SLA) on April 15 issued an order suspending the manufacturing licences of 14 products of Patanjali Ayurved Ltd and Divya Pharmacy. However, the state licensing authority later filed an additional affidavit in the apex court stating the suspension order has been cancelled following a report by a high-level committee which examined the grievances of Patanjali Ayurved Ltd in the wake of the row. On May 17, it said the operation of the April 15 order was paused and the suspension order was cancelled on July 1. During the hearing on Tuesday, the counsel appearing for the IMA told the apex court bench about the cancellation of the suspension order. “What is the status today?” the bench asked. The counsel appearing for Uttarakhand said that after the July 1 order, a fresh notice was issued to Patanjali and the SLA received a reply from Patanjali on July 19. When the state’s counsel said they have sought legal opinion in the matter, the bench asked, “How much time do you need to wrap up the matter after hearing them?”. When the counsel said they needed three to four weeks, the bench asked, “Why?”. It told the state to pass an order pursuant to the show cause notice before the next date of hearing and communicate the same to Patanjali. It also dealt with the issue related to its May 7 directive, which said that before an advertisement was printed, aired or displayed, a self-declaration shall be submitted by the advertiser or advertising agency on the lines contemplated in Rule 7 of the Cable Television Networks Rules, 1994. Rule 7 of the 1994 rules deals with the advertisement code and stipulates that advertisements carried in the cable service shall be designed to be in conformity with the laws and should not offend the morality, decency and religious susceptibilities of the subscribers. The top court on May 7 said self-declaration shall be uploaded by the advertiser or advertising agency on the ‘Broadcast Sewa Portal’ run under the aegis of the Ministry of Information and Broadcasting. During the hearing on Tuesday, Additional Solicitor General K M Nataraj informed the bench that the ministry had convened a meeting of all stakeholders on June 30 in which 40-odd parties participated to discuss the issue. He said another meeting was held in July and some time was needed to collate all the information and give recommendations. The bench granted two weeks to the ministry to do the needful. Source: Economic Times

August 08,2024 The Reserve Bank of India has proposed raising the upper limit for tax payments through Unified Payments Interface (UPI) from Rs 1 lakh to Rs 5 lakh per transaction, governor Shaktikanta Das said during its bi-monthly monetary policy announcement. UPI boom: The increased limit is expected to offer greater convenience to taxpayers, particularly for high-value transactions, potentially encouraging more taxpayers to use UPI for their tax liabilities. Earlier, in December 2023, RBI had increased the limit to Rs 5 lakh for certain payments, such as to hospitals and educational institutions. Delegated payments: The measures announced included ‘delegated payments’ through UPI. In his post-monetary policy review address, Das said the facility would enable an individual (primary user) to allow another user to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI. Repository of lending apps: The central bank also proposed to create a public repository of digital lending apps (DLAs) to address the problems arising from the mushrooming of unauthorised players in the segment. “The regulated entities (REs) will report and update information about their DLAs in this repository. This measure will help the consumers to identify the unauthorised lending apps,” Das said. A US bankruptcy court has dismissed a plea by Glas Trust Company, which represents US lenders, to block the settlement deal of Byju’s Rs 158-crore overdue payment to the Board of Control for Cricket in India (BCCI) over a sponsorship deal. Tell me more: Judge Brendan Shannon of the Delaware Bankruptcy Court declined to intervene in legal proceedings taking place in another country’s judicial system. Byju’s legal counsel said any interference from the US court “would be an unimaginable insult to the system in India.” Byju’s had raised $1.2 billion in term loan in 2021. Source: Economic Times