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You buy travel insurance thinking that you will be covered for any mishaps, but does it really protect you in the time of need? The details are in the fine print as discovered by Cox and Kings Europe tourists even as C&K is giving its “customers” a rude brush-off
Cox and Kings' (C&K) European Whirl tour ended with a whirlwind for 32 passengers just before takeoff back home. After being robbed of valuables left in the bus (on insistence of the tour manager), C&K has given them a cold shoulder and the prospects of the insurance company paying them anything is zero. C&K's reasoning is that they are not responsible for loss of any baggage, valuables and personal effects of the passengers.
Read the first part of the story - Cox & Kings’ tourists robbed in Europe
What is unique in this case is that the passengers lost belongings by following the C&K tour manager's instructions and yet C&K does not believe that they have to take the responsibility. C&K asserts that "passengers should not leave any property in the coach while disembarking", but ironically the tour manager gave exact opposite directions during all the 10 days of the tour.
If the standard operating procedure was to make the passengers keep the baggage inside the coach during sightseeing, C&K should have had an understanding with bus operator/sub-contractor about them taking the responsibility of baggage. C&K should be able to get compensation from bus operator/sub-contractor to indemnify the huge loss to the 32 passengers. Did they get any report from bus operator and tour manager? Was any action taken? How about C&K taking interest to follow-up with the police station in Rome where a complaint has been made? Why is C&K shrugging off the case with a casual attitude?
What makes the case appalling is that all the passengers lost the carry-on baggage and not a small tourist bag, which people carry during sightseeing. According to YN Bhattacharya, a senior banker who along with his family had lost of around Rs2 lakh says, "Instead of going directly to the airport or giving the option to leave the baggage in the safety of hotel lockers which was hardly five miles from the airport and ample time on-hand, the C&K tour manager made the full tour to not only carry all the baggage in the bus but also made them keep it inside the bus with no option for passengers to sit inside the bus. All of them had to go to the mall, which was actually not mentioned in the itinerary." If this is true, it was clearly a trap, possibly involving the tour manager himself. What is the implication is all this for insurance?
While buying travel insurance, customers hardly know what is really covered. What is mentioned in the fine print is that the cover is for checked baggage with the airline and does not cover loss due to theft. Oriental Travel Insurance purchased through C&K only covers loss of checked baggage. One insurer who covers theft from vehicle which clearly states-"It excludes theft from a motor vehicle unless the property is securely locked in the boot and entry to such vehicle is gained by visible, violent and forcible means." Even if the travel insurance purchased through C&K had this clause it would not have helped as it was an inside job. There was no need for forced entry or tampering of the lock. The learning for travel insurance buyers is to not buy blindly. If certain situations are not covered, you have to be extra vigilant about protecting your assets in a foreign land.
One of the 32 passengers lost his passport, ticket and was stranded in Rome. C&K's terms and conditions (T&C) states following-"If you lose your passport, visa, tickets, etc, you may have to incur extra expenses, for which you alone shall be responsible." Moreover, the T&C of Oriental Travel Insurance covering loss of passport excludes following-"Loss or theft of passport left unattended by the insured person unless located in a locked hotel room or apartment and an appropriate sized safety deposit box was not available for use by the Insured Person." There is low chance of getting insurance reimbursement in this case.
Even small tour operators carry public liability and professional indemnity insurance to handle such situations. C&K, being a major player in this business for over 250 years, will surely protect itself for any liability as it would have an insurance cover. So, it is not as if C&K will have to pay from its pocket to reimburse the 32 passengers. The reluctance to entertain and empathise with the loss of its own customers shows horrible a shocking business attitude.
If the fight goes to courts, the tour operator may simply invoke their insurance to pay off any liability. It may eschew doing justice till the noose tightens around its neck.
Tour passengers have been trying to contact C&K by personal visits or emails, but without any success. YN Bhattacharya tried repeatedly to contact Pankaj Sethi, C&K co-coordinator for the tour, who did not pick up the call, but sent an SMS that he would call back later, which he never did. Another passenger G Elangovan's email was unanswered. After a reminder, there was general reply that C&K is looking into the issue. C&K was going to give a response to Moneylife by noon today, but there has been no response till the time we uploaded the article.
Across the world, corrupt corporates, government officials and individuals have been sent to jail or made to pay heavy damages. When will India act to punish the guilty?
The conviction of Rajat Gupta by a US court in the matter of insider trading has raised an important issue; can we expect anything like this in India? Will there be speedy trials not only in the case of insider trading but several other important cases involving corporate frauds and political corruption.
While we in India tend to believe that we have tremendous amount of corruption in our country as also there are several frauds involving corporate and rightly so, but we are not alone in this; countries across the world are facing these twin problems. However, the major difference seems to be the speedy justice provided to the victims with the guilty being hauled by sending them to jail or making them pay heavy damages so that it would teach them a lesson.
According to a recent issue of American Banker, ING Bank has agreed to pay $619 million to settle charges that it violated US sanctions; the report says this is the largest such settlement in history, said the Treasury Department. (http://www.americanbanker.com/issues/177_113/ING-OFAC-violations-settlement-1050065-1.html )The settlement resolves an investigation by the Office of Foreign Assets Control into charges that the bank intentionally manipulated information about US sanctioned parties in more than 20,000 financial and trade transactions between 2002 and 2007. The Treasury held that it was a historic settlement and it should serve as a clear warning to anyone who would consider profiting by evading US sanctions.
The case involving well-known pharma giant Johnson & Johnson (J&J) makes still more interesting reading. Pharma companies have been known for certain practices which can hardly be called ethical. According to a Bloomberg report J&J has agreed to pay as much as $2.2 billion to settle US probes of the marketing of its Risperdal antipsychotic drug and other medications. The report states that, “The settlement will include a misdemeanour plea and criminal penalty of as much as $600 million, said the people, who didn’t want to be identified because they weren’t authorized to speak publicly about the agreement. (http://www.bloomberg.com/news/2012-06-11/j-j-said-to-pay-2-2-billion-to-end-risperdal-sales-probe.html)
The accord also would resolve civil claims that J&J paid kickbacks to Omnicare Inc (OCR), a company that dispenses drugs at nursing homes, the people said”. The said report states that J&J officials said that on 8 June that the company was setting aside $600 million to increase its reserves for potential settlements of lawsuits over its marketing campaigns for Risperdal and other drugs. Officially, the spokesman of J&J has refused to comment on this matter.
In another case, this time from Singapore, former Singapore Central Narcotics Bureau director Ng Boon Gay was charged with four counts of corruption for obtaining sexual favours from a female information technology executive seeking contracts from the agency. The charges come less than a week after former Singapore Civil Defence Force commissioner Peter Benedict Lim Sin Pang faced similar charges involving three women seeking contracts for their companies. Singapore reviewed its public sector financial procedures after uncovering a S$12.5 million ($9.7 million) fraud in September 2010 by two former land authority workers in an incident prosecutors said severely shook public confidence in the internal controls at government agencies.
Mr Ng is out on bail and will contest the charges and seek more information on how he had allegedly helped in furthering the interest of Oracle and Hitachi Data. Hitachi Data said in an e-mailed statement “any alleged inappropriate behaviour attributed to our former employee during her time at HDS was undertaken without the knowledge of, or being condoned by, anyone at HDS.” Mr Ng faces a fine of as much as S$100,000 and a jail term of as long as five years for each charge.
Many years back Glenn Knight, a former director of the Commercial Affairs Department, was sentenced to a day’s jail in 1998 and suspended from legal practice on corruption charges in 1991. The Straits Times (Singapore) said the investigations this year rank among the highest- level probes of civil servants since Knight’s case.
China is well known for many things and corruption is one of them. But a recent case indicates the seriousness of the authorities to bring the guilty to book at the earliest.
According to a report by David Barboza from Shanghai, published in the New York Times (13th June), the former head of the Chinese soccer association and 10 other former national team players and executives were sentenced by Chinese courts to lengthy prison terms for accepting bribes and fixing matches (http://www.nytimes.com/2012/06/14/sports/soccer/lengthy-prison-terms-in-chinese-soccer-corruption-case.html).
According to the report, the sentences are part of a government effort to crackdown on gambling, match-fixing and bribery in the country’s beleaguered leaguers. So far, more than 50 former players, coaches, referees and other officials have been convicted of corruption. The authorities are trying to clean up the system that has long been tainted with corruption and also failed to produce a strong national team. China’s national team is ranked 73rd by FIFA, just ahead of Iraq. The country’s team has not qualified for the World Cup since 2002.
The country’s national league is also trying to strengthen itself after a decade of scandals. Some of China’s wealthiest real estate developers have bought clubs, and even hired European stars and coaches to enliven the game, which remains a popular sport in China.
The agency report states that a court in northeast China sentenced Nan Yong, a former top executive, to 10 years in prison for taking bribes of 1.19 million renminbi (about $187,000). His predecessor was the head of the Chinese association was also sentenced by another court in north China to 10 years in prison for taking about 1.36 million renminbi (about $214000) in bribes.
Two other members of the national soccer association, the team manager and the former technical department director also received long prison terms. Similarly, four national team players were also sentenced on 13th June to six years in prison for taking bribes to help fix the results of a professional match.
We have been importing so many things from China, can our cricket authorities learn a lesson or two from the way China has dealt with its players and officials indulging in corrupt practices.
According to a BBC news report South African President Jacob Zuma has fired police chief Gen Bheki Cele, who had been accused of corruption. (http://www.bbc.co.uk/news/world-africa-18414786) The general was promoted to become police chief in 2010, when his predecessor Jackie Selebi was convicted of taking $156,000 (100,378 pounds) in bribes from a drug dealer. Are the Indian authorities listening; here suspended police officers not only manage to come back to work but in due course are granted promotions as well.
The country has been debating whether to permit Wal-Mart into the country or not, what will be the consequences, will it be in the interest of consumers or will it kill the small retailers, etc. Now comes an Associated Press report which indicates the level of bribery indulged in by Wal-Mart officials in promoting its operations in Mexico. The same report states that the New York Times reported in late April that Wal-Mart’s Mexican unit allegedly paid millions of dollars in bribes to speed building permits and gain other favours. The Times said executives didn't notify authorities even after Wal-Mart found evidence of the scheme. However, the top management has said that a full investigation is going on it is co-operating with the authorities.
So when Wal-Mart comes to India, one thing we can be sure of is huge bonanza will be available for our babus who will be providing the necessary approvals to Wal-Mart for starting its operations in India.
What is evident from all the above cases is that bribery and corruption is all pervading but is also apparent is intention to fight the same by bringing the guilty to book at the earliest by giving them harsh punishments. Can we expect anything like this in India?
SD Israni is a corporate lawyer. Email: [email protected]