Consumer Issues
5 Worst anti-consumer settlements of 2014

If a company is called to task for false or deceptive advertising by federal or state authorities, or through a class-action lawsuit filed on behalf of consumers, the outcome should certainly benefit consumers

 

Here’s the list of settlements in which consumers are getting a raw deal:
 
1. Coca-Cola’s vitaminwater: A proposed settlement pending in federal court in Ohio would give nothing to consumers who bought the drink under the mistaken impression from the marketing that it was a healthy alternative to soda. Nor would the company have to change some of its key misleading marketing. But the attorneys make out well, pocketing  $1.2 million for suing the company. That’s a nice holiday gift for the firms and an empty stocking for consumers.
 
2. Glucosamine: Under this pending settlement, consumers in the U.S. who purchased a variety of glucosamine supplements sold by Walmart, Supervalu, Walgreens, and stores owned by them — will have to agree to allow the companies to continue marketing the products in misleading ways if they want to get some money back on their purchases and that’s if they even hear about the settlement since notification methods were flawed.
 
3. L’Oréal: After making well over $1 billion in net sales from misleadingly selling its Lancôme Gènifique and L’Oréal Paris Youth Code cosmetics line as products that could enable consumers to “grow young” without any substantial proof, the company only had to promise in a settlement with the FTC that it would never do that again. Consumers, who paid upwards of $100 for the skincare products that were advertised as being able to manipulate genes in the skin to reduce signs of aging, got no redress.
 
4. Vapex LLC  e-cigarettes:  Vapex and two other e-cigarette companies that admitted  guilty to violating Utah consumer protection laws by repeatedly charging consumers credit cards without appropriate consent and deceptively advertising the vaping products as safer alternatives to tobacco cigarettes had their fines reduced by 98 percent by the state of Utah. Utah, which received close to 100 complaints against the companies, cited them this summer following a TINA.org investigation. The state agreed in separate settlements with Vapex, Sinless Vapor LLC and OZN Web LLC to allow the companies to pay just 2 percent of assessed fines totalling more than $1.1 million. Here’s a case where consumers truly got smoked.
 
5. Jimmy John’s Restaurants: In perhaps the silliest agreement worthy of a collective eye-roll, a judge approved a class-action settlement stemming from allegations that the restaurant chain advertised sandwiches with sprouts when the sandwiches did not in fact contain sprouts which gave consumers in the class a $1.40 voucher to purchase any side items. The side items?  Pickles, a cookie, potato chips or soda — all not quite as healthy as sprouts.
 
 

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Ganaraj Group to pay Rs14 lakh for 5-year delay in handing over flat
The Maharashtra State Consumer Disputes Redressal Commission directed a builder, Ganaraj Group, to pay a compensation of Rs13.50 lakh to a Jogeshwari couple (the Dhotres) for a five-year delay in handing over possession of a flat in Thane. The couple had paid more than 95% of the flat’s price of Rs30 lakh. The Commission also directed the builder to hand over the flat within 45 days failing which Rs1,000 per day would be payable to the Dhotres, until handing over of possession of the flat.
 
In March 2007, the Dhotres had entered into a registered agreement to purchase a flat, which was to be constructed and developed by the builder and developers, for a total of Rs30 lakh. The couple had paid Rs29 lakh and, yet, the builder had not handed over possession. Ganaraj Group did not respond to the complainants’ repeated persuasion for handing over possession. The Dhotres filed the complaint before the Commission in 2010.
 
Ganaraj Group alleged that the complaint was not maintainable as the complainants were not a consumer under the provisions of Consumer Protection Act, 1986. While the company accepted that the Dhotres had paid the amount, no reason was mentioned for the abnormal delay.
 
The Commission said that, on carefully going through the written version on record, no tangible reasons were revealed about the delayed possession of the flat. “On going through the registered agreement to sale, we find that the possession was to be delivered on or before November 2009. The terms and conditions set out are binding on the parties. As rightly pleaded by the advocate, the opponents have incurred deficiency of service to the complainants by not delivering the vacant and peaceful possession,” the Commission said.

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Builder, Nilesh Patel, Directed To Pay Rs8 Lakh for Four-year Delay
The Maharashtra State Consumer Disputes Redressal Commission directed a builder, Nilesh Patel, to pay Rs8.3 lakh for a four-year delay in handing over redeveloped property to a Mulund resident, Bhikanrao Kulkarni. 
 
In 1997, Nilesh Patel signed a deal with Mr Kulkarni to redevelop his 2,000 sq ft property and hand it over in two years. Due to the delay, Mr Patel agreed to pay Mr Kulkarni Rs15,000 for every extra month. He handed over the property in 2003. The Commission said that Mr Patel had breached the deal conditions but there was no deficiency of service. “There is inordinate delay in giving out the developed property for which the complainant suffered mental pain and agony,” the Commission said.

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