India is asking Amazon to explain the sharp rise in consumer complaints

In a bid to ensure that consumer rights are protected and customers are not fleeced by being sold fake goods online, the government has yet again stepped in, taking cognizance of a surge in complaints.

According to highly placed sources, the consumer affairs ministry once again pulled up Amazon India and asked the online e-commerce giant to “improve customer services, including complaint redressal" and "sell genuine products".

“Consumer affairs ministry on 4th May in a virtual meeting pulled up top brass of Amazon, issuing strict warning to improve customer services and grievance redressal mechanism,” said the sources.

The ministry, which is the nodal government department that administers consumer protection rights in the country, has also warned e-commerce operators in the past, asking them to enhance consumer grievance redressal mechanism in the country.

Top officials told that “Amazon India has been strictly told to get back with a status on updated consumer services by the end of month.”

“Consumer affairs ministry used to register 5-6 percent consumer complaints against e-commerce players in 2016-17 (out of the total complaints), the number has increased to 40 percent in FY2022 – here majority of complaints are pertaining to Amazon, and this data has been shared with the e-commerce company, based on which the ministry gave them a verbal warning,” the sources added.

However, it needs to be noted that Amazon and Flipkart are clear leaders in the e-commerce space and hence the proportion of complaints is expected to be higher. Also, the e-commerce space has particularly witnessed a boom in the last 2-3 years which may have led to rising complaints.

According to them, the ministry will soon also meet other e-commerce players such as Flipkart, Snapdeal, Myntra, Tata CLiQ, to ensure that consumer protection rights are not violated by them either. However, a date for the meeting has not been decided as yet.

Meanwhile, in a response to the email query sent to Amazon, an Amazon India spokesperson told CNBCTV18: "The meeting referred was one such meeting which was proactively sought by the company to evolve more consumer friendly services. Amazon endeavors to resolve the complaints within 24-48 hours and has maintained 98 percent resolutions on the National Consumer Helpline.”

Increased sale of counterfeit products too has been a matter of concern raised by the Delhi High Court.

Traders body Confederation of All India Traders (CAIT) has been writing to the ministry to ensure that fake products are not sold online and consumer rights are protected.

The CAIT had earlier said that the e-commerce portals were being used for sale of counterfeit products, contraband drugs, sale of raw material used in making bombs, which could prove much detrimental not only to the security of the country but also cause grave injuries to customers.

The body has urged commerce minister Piyush Goyal, who is also consumer affairs minister,  to take immediate cognizance and action on the issue. It has called for a serious but earliest in depth discussion in both ministries on the order passed by Justice Pratibha Singh of Delhi High Court recently.

CAIT National President B C Bhartia and Secretary General Praveen Khandelwal alleged that prominent foreign funded e-commerce portals operating in India are not doing necessary 'Know Your Customer' of the sellers though they are under obligation to complete KYC of each of them before onboarding on their respective platform.

“Whenever they are caught in violating the law, rules and policies, they always pass the buck on the seller taking a shelter of Section 79 of the Information Technology Act, stating that they are marketplace and providing technology platform to buyers and sellers which is a blatant lie as the orders on their respective portals are reached to these portals which has the veto to decide as to whom the order should be diverted for supply," said Khandelwal.

"How can they say that they do not know anything about the transactions that happened on their platform when they handle not only the order, but even packing and logistics, etc. Moreover, by taking certain amount as commission, they become integral part of the selling mechanism and therefore they can’t escape from the liability to the consumers for any product , " he added.