Online shopping complaints and Consumer Protection Act jurisdiction

Who would not want to shop at the comfort of sitting in a chair thus avoiding cumbersome window shopping, handling of cash, carrying the product to home et al. Yes, we are talking about online shopping where you can choose the product of your choice online, make payment through your credit/debit card netbanking account online or pay cash on delivery (CoD). The product will be delivered at your doorstep. It sounds nice. But does the story end here? It does not and it may be the beginning of an ordeal.

With the emergence of e-commerce, online shopping is gaining great momentum in India. This is evidenced by the mushrooming some small and big shopping portals. To name a few India based shopping portals – Flipkart, Indiaplaza, Indiatimes Shopping, Timtara, Homeshop18, Letusbuy, Naaptol. But how safe are these shopping portals? Are consumers really satisfied with the services of these portals?

There can be a general misconception as to all these portals are selling products. However, the reality is none of these portals are selling products. They are only facilitating sales of products through their online portals. Their main backbone is the logistics of placing order with the merchant members and having it delivered to the customers.

Following are the pros and cons of online shopping:

Pros: Shopping from the chair, easy viewing of products and its details, pick and choose as per your choice, budget shopping, variety of products, no handling of cash, no queues, door step delivery

Cons: Risk of wrong or defective product getting delivered, delay in receiving the product, delay in getting refund, warranty issues and exposure of sensitive data to high risks of frauds and hacking, and limited legal remedy in case of any dispute.

In our view, the cons outweigh the pros, particularly the legal aspect in case of any dispute. Considering the cons listed above and based on the complaints being received by us, we can say with some confidence that it is better to do the traditional shopping for expensive items and try online shopping for items that cost few hundreds.

Let us now see the legal remedy in case of disputes.

Remedy under Consumer Protection Act:

The possible disputes are – wrong delivery, defective delivery, delayed delivery, cancellation of order and refund against cancellation.

We would treat the online shopping portals as dealers as they are the gateway for buying the products by way of display. Even the payment is also received by them for the products sold through their portal. So they definitely have a decisive role to play in the selling of products.

The Consumer Protection Act, 1986 laids down the following clause in respect of jurisdiction for filing complaints:

A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

Since not all shopping portals will have offices or branches in all cities/towns, a customer cannot rely on clause (a) and (b) above in case of a dispute. Clause (c) might assist him and he may be able to file a complaint in the District Forum that covers the area where cause of action arises.

There have been quite a few cases filed in the District Forums of Karnataka, Gujarat, Himachal Pradesh and Kerala against onling shopping portals. In Vinodkumar, Ernakulam Vs. Shoed Merchant, Mumbai & Ebay India, Mumbai, the District Consumer Forum, Ernakulam had entertained Mr. Vinodkumar’s complaint against Ebay and Shoed Merchant though his complaint was dismissed on a different ground and not for lack of jurisdiction. Mr. Vinodkumar successfully appealed the said dismissal order and was awarded compensation by the Kerala State Consumer Dispute Redressal Commission. Similarly, consumers have been successful in their complaints against Naaptol in Karnataka, Gujarat and Himachal Pradesh DCFs. This is good news for consumers as this sets precedent for handling online shopping complaints by Consumer Forums.

Oddly though, the Information Technology Act passed by the Govt. of India deals only with issues relating to hacking, privacy, regulating authority and punishments for wrongdoers. The act however does not focus on the interest of online shoppers, and is, therefore, of limited use to consumers who face problems while shopping online.

It is high time that we need to have proper regulations for online shopping. The government should either amend the existing CPA to expressly include good and services bought/availed online with procedure for filing complaints or pass a separate act something similar to Consumer Protection (Distance Selling) Regulations passed in UK.

In any case, based on the cases already handled by various DCFs, consumers can now fight it out in the District Consumer Forum for their grievances arising out of online shopping.