Consumer is King » Customer

Penalties on electricity discoms in Delhi for failures proposed to be increased massively

ashish — Thu, 11 Mar 2010 14:26:51 +0000

Delhi used to suffer under bad quality of service from the earlier Government controlled DESU. So, when privatization of power supply in Delhi happened and the city was broken up into several zones, customers were happy with the hope that they will get more regular power for longer hours, less breakdowns, better customer service and other such improvements. Overall, while the condition is better than the time under DESU, there has not been the level of improvement that one would have expected from the entry of private discoms. People still suffer from power breakdowns, from bad customer service (including people not picking up the phone when the power goes down or lines not available, inflated bills, burnt meters not getting replaced early enough, and other such problems).
There have been numerous complaints over the years, but they do not seem to have really made matters better, with the Chief Minister also publicly criticizing some of these corporations for the bad level of service; but this is also true because the cost of not making things better is not much – so the penalties are not often applied, and even when applied, the penalties really do not cause the discoms much harm. A new proposal aims to increase the level of penalties and ensure that the cost that the discoms would be willing to take by continuing to offer bad quality increases considerably (link to article):

In a few weeks, discoms will have to pay the price for every deficiency in service. On Wednesday, power regulator Delhi Electricity Regulatory Commission (DERC) held a public hearing on its proposal to hike the penalty amount payable by discoms as suo motu compensation if they fail to pay the original penalty for deficiency in service. All the penalty amounts under the performance standard regulations may also be doubled. Sources said the new penalty amounts will be effected in another month.
If the discoms does not pay the compensation suo motu, then the consumer will have to be paid compensation which is five times the original amount,” said a DERC official. The draft also proposed that all consumer complaints that were made using any medium — telephone, SMS or even in writing had to be routed through a call centre, a unique compliant number and a permanent record of the complaint had to be made. The discoms have been asked to ensure that they run call centres with sufficient number of officials or employees for effective complaint handling.

This seems to be a good effort, but only if it is carried through and discoms have to pay penalty at a level that bites them.

Changes in the way telecom tariffs are currently being calculated

ashish — Fri, 09 Oct 2009 12:42:04 +0000

Indian telecom tariffs operate on what is called as the pulse plan, which is typically pegged to minutes, and call rates are based on these pulses. So, for example, if the pulse rate is pegged to 1 minute, then whether you speak for 5 seconds, or whether you speak for 55 seconds, you will get charged the same rate. This helps telecom companies since they get more revenue, after all, if a number of calls are closer to 10-20 seconds, and you get charged for a minute, then they earn more. Not many people have really felt that they could challenge this policy, even though this is equivalent to charging the customer extra. However, one of the companies in the telecom space decided to try to be different, and they have come out with a plan where you can get charged with a pulse plan of 1 sec, so you are literally charged only as much as you speak.
And now the telecom regulator has got into the act. It has tried to address this customer issue, and advised that it will make a recommendation that all the telecom operators need to follow. Given that this will be a revenue loss for the operators, they are hesitant to follow down the path of offering a plan to their customers that allows customers to select the option of having a per-second plan (link to article):

Despite rumbles of discontent by telecom operators and the tanking of telecom stocks over the past few days, Trai chairman J S Sarma on Thursday confirmed he was examining the feasibility of bringing in a direction, making it mandatory for service providers to include a ‘pay-per-second’ tariff plan in their bouquet of plans. “We will issue a consultation paper on the matter in a month,” he said in a hurriedly convened press conference.
Clarifying the meaning of “mandatory option”, Sarma explained that it will be mandatory for the operators to offer at least one such plan, but optional for the consumers on whether or not they wish to subscribe to such a plan. However, Sarma said operators would be free to determine the rate that they charge per second.

Operators are taking the argument that TRAI need not intervene in matters of plans and tariffs, and that the high level of competition in India has meant that market rates in India are among the lowest, but many of these lower tariffs were also the result of regulator involvement over the years.

Insurance regulator gets strict on orphan policies

ashish — Wed, 09 Sep 2009 19:46:00 +0000

What are orphan insurance policies ? These are policies where the agent who sold these policies has shifter to another company, and the person who bought these policies no longer has an agent or an intermediary to help service them. This is a common problem in the life insurance business, since:
- An agent will do anything to sell a policy, including using charm, threatening about the problems that could occur later in life if you don’t have an insurance policy, using contacts, etc. The agent gets a good commission when the insurance policy is sold, but the amount of commission is drastically reduced in subsequent years, which leaves little incentive for the agent to remain and service the needs of the insurance buyer. If another company offers a better deal, the agent will move.
How can there be a solution that also helps the insurance buyer ? Well, the IRDA (insurance regulator) is making it more difficult for agents to shift so very easily, adding a set of conditions and rules (link to article):

In A bid to ensure that fewer policies get lapsed, the Insurance Regulatory and Development Authority of India (Irda) has made it tougher for agents to shift loyalties . The new agency guidelines ensure that all agents—individuals , corporate as well as banks—continue to sell policies of the same insurance company for at least three years. Historically, lapse ratio has been higher among orphan policies when compared with policies that are serviced by an agent. To ensure that an agent shifting loyalties does not leave behind orphan policies, the insurance regulator has put in a number of preconditions that the agent has to fulfil before he can obtain a no-objection certificate from his principal.
To take care of the policies orphaned by agents, Irda said, life insurers should ensure alternate arrangement, and these measures should go beyond a call centre facility, which is also an essential requirement . Insurance companies have been asked to intimate each policyholder that their agent has quit and there are alternate arrangements being made to service them.

Telecom: Reliance Commnications fined Rs. 10,000 for being deficient in services

ashish — Sun, 07 Jun 2009 13:16:14 +0000

Getting an internet connection in modern India should be very easy, and it should almost be like a commodity. The customer pays for a connection, and the company provides the connection, and it works with minimum down time. But what do you when the company provides you with a connection that is old, even though you asked for a 1 year connection ? And how do you get to know ? Well, the connection ends and you are told to pay up for the unpaid bills. Furthermore, officials of the company do not treat the customer with due convenience, and instead quote rules even though the fault is the company’s. Well, now we have consumer forums, and even though it may take time, the consumer forums do deliver satisfaction, and allow the consumers to get benefit. Consider this case (link to article):

CHANDIGARH: Finding Reliance Communication deficient in services, UT consumer forum directed it to pay Rs 10,000 as compensation for harassment along with Rs 2,500 as litigation costs to Tejbir Kaur of Sector 46. The forum also added that Reliance was duty bound to adjust Rs 9,345 and Rs 330 received by it.
According to the complaint, Kaur had purchased internet connection for a year from Reliance for Rs 9,375, but after two months she allegedly found out that hers was an old connection because of which it terminated. She was then reportedly given a new number with the assurance that the amount already paid by her would be transferred into the new account. She, however, alleged that it was not done, rather she received legal notices for non-payment of bills.

Typically, at such times, the company officials should respond in such a way that benefits the customer, but it did not seem to happen. This case is another example of how it is to the benefit of consumers of being more aware of their rights, and how when companies are not ready to improve their services, consumers can go to consumer forums for getting justice.