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Online Personal Finance Magazine
No beating about the bush.
The list of complaints against the Mahindra group company from members is increasing. But they are not being addressed appropriately
There appears to be little respite for Mahindra Holidays and Resorts, as the list of complaints from dissatisfied customers continues to grow. The complaints range from unsatisfactory practices and deficiency in services to unfulfilled promises. While very little is known about how successful the company has been in redressing the complaints, a letter addressed to Mahindra Holidays managing director Ramesh Ramanathan recently raises the lack of clarity over the business model that this Mahindra group company follows.
"Overall people are not very clear on the business model Club Mahindra follows. There is no one reference document to it and the typical timeshare model does not apply in this case," Bhupesh Gupta, who has been a member of Club Mahindra Holidays since 2004, wrote in his complaint. "Bits and pieces of information come to light, surprising me every time. I am surprised why Mahindra Holidays reports resort occupancy levels at the time of quarterly report to shareholders. What significance does this have to its timeshare business? Who will take the hit of this under-utilisation, the members or the business?"
Mr Gupta says that he has not received a reply from the company for some time and so addressed a copy of the letter to Moneylife, which raised the issue with the company. However, the explanations by Mr Ramesh and chairman Arun Nanda were not very enlightening. Without answering the issue raised directly, both tried to describe how "customer centric" the company has been.
Mr Ramesh says, "Our surveys done both internally and independently prove that we have a very happy set of members who rate the experience at our resorts extremely high. I am happy to share with you that RCI have awarded the Gold Crown status to 10 of our resorts… more than 25% of our new members sign up through referrals by existing members, denoting a high level of delight with the brand." RCI is the largest timeshare vacation network in the world.
Strangely, in a recent interview with MoneyControl, Mr Nanda had admitted that an internal check has revealed that the company was lacking in many aspects and that it required some cleansing operations to contain the damage to its membership base. Club Mahindra is said to have experienced a 30% drop in membership sales revenue over the past few months.
It is very likely that this is the outcome of the numerous complaints of members that appear to go unresolved. Consumer review websites like mouthshut.com and www.consumercomplaints.in list some of them. In one recent note, Devyani Chakraborty says she is still awaiting a refund on cancellation of her membership, which was sold to her a few days before during Durga Puja. In one post today, Mr Sandeep said he has failed to encash a free holiday voucher coupon after he was told that there were no rooms available in any of the resorts in any destination.
Other complaints refer to lack of proper exit options, which, the Mahindra Holidays chairman said were very few. However, there is no explanation as to why members have to go through an excruciating exit mechanism and lose 30-40% of their membership fees in the process.
Many of the timeshare membership holders have complained that the "flexibility" option, which enables the users to transfer, exchange and split their holidays, have led to under-utilisation of the resorts. Moreover, they accuse the administration of favouritism, which enables only some particular members to avail good reservation dates and facilities.
But while members are allegedly denied facilities, resorts and rooms are used for other events and availed by outsiders. Many members, after repeated failures, give up on making reservations, which leaves many resorts with vacancies. There are complaints about unsatisfactory services, inadequate inventory and other unfulfilled promises.
It appears from inquiries Moneylife made with some members that there is no proper grievance redressal mechanism and neither are members aware of how they can get their complaints resolved, nor are the staff equipped to deal with such situations. Another repeated mention is that staff members engage in dubious practices like lotteries, misleading members about offers and not providing proper information about the terms and conditions.
Why is such a lot of money being spent on skywalks that are inconvenient, a Metro that cannot accommodate large numbers, a monorail and a sea link for a privileged few?
When I read a newspaper report earlier this week that there is insufficient space to accommodate escalators at the skywalks which are coming up across Mumbai, I just could not help thinking that the blokes at MMRDA (Mumbai Metropolitan Regional Development Authority) are very capable of messing around with matters of public importance without application of mind from the outset. The lucre of Rs600 crore (allocated for the skywalk projects) was too big not to be attracted to, or delay, lest they were halted in their tracks. The contract costs have since escalated to Rs735 crore.
The design of the skywalks does not support the aim of making the journey for pedestrians easier and safer. Let alone the convenience of the average pedestrian, the design also grossly violates the accessibility aspect with regard to the Disability Act 1995. The usage of skywalks that have already been commissioned is dismally poor. And all this is coming up after Rs385 crore has been spent and numerous trees have been chopped down. Is this not a scandal of sorts?
After the Mumbai Urban Transport Project (MUTP) is completed, the carrying capacity of the railway system will increase to 1,80,000 pph (passengers per hour) from the current 1,50,000 pph. The load on the railway system is around 3,60,000 pph. Thus, there will be a shortfall of 1,80,000 pph even after the MUTP has been completed. We know that the capacity of the Metro will be about 72,000 pph after it has been fully commissioned. So, the Metro would not be able to meet the needs of Mumbai's public transport requirements. Even after knowing this, MMRDA is pursuing with the Metro Rail. Is not the lucre of the over Rs60,000 crore Metro Rail Project more attractive than the Rs3,000 crore cost of the Bus Rapid Transit System (BRTS)? Is this decision also not bordering on a scandal of sorts?
The monorail project has gone ahead, again, without any analysis in terms of both the need and utility compared with other modes of public transport like BRTS and Skybus. Does this also not border a scandal of sorts?
We are also seeing that due to non-availability of funds, all kinds of manipulations are being carried out to get the projects moving. MMRDA is planning to start work on all the remaining eight lines together, with the objective of completing them by 2014! Are not the guys at MMRDA being too ambitious, perhaps even greedy, to think of doing all of it simultaneously, thereby subjecting the whole population to great distress over a long period?
Then there is the 5 lakh rental housing scheme-most unimaginatively conceived, at faraway locations, a high cost of transport and long duration of unsafe travel. Is this not another scandal of sorts?
About Rs1,600 crore was spent on the Bandra-Worli Sea link for about 35,000 users to travel swiftly, while 60,00,000 people travel on suburban trains in super-crush load during the peak periods. Now it is envisaged to extend the sea link to Nariman Point, without any consideration of the high cost and low utilisation. But spend just about Rs3,000 crore on a 200km network for BRTS instead of, or along with the high-end ticket projects, and we could save 4,000 lives that are lost in rail accidents every year. Is this also not a scandal of sorts?
A recent deal for the purchase of biometric scanners from a US-based company, which has worked closely with American intelligence agencies, raises serious questions on the security of data in the Aadhaar project
Could the Aadhaar project, touted as a critical requirement for development, turn into a threat to the country's national security and sovereignty?
It was recently reported that L-1 Identity Solutions, a US-based company which is now being bought by a French company, has been given a $25 million order for biometric scanners. This was among the deals announced by the White House during the visit of president Barak Obama to India a fortnight ago. In fact, president Obama, for the same reason, also blessed the Unique Identification Authority of India (UIDAI) with a visit to the innovation forum event in Mumbai where he even had a chat with UIDAI's tech head.
In the case of any other commercial deal this would not have raised eyebrows. But it is the background of L-1 Identity Solutions that raises questions. L-1 has close ties with US intelligence agencies. Read what a report says about L-1: "I will start by mentioning that Louis Freeh (former director of the US Federal Bureau of Investigation), Admiral Loy (former head of the Transportation Security Agency), George Tenet (former director of the Central Intelligence Agency), Frank Moss (former program manager for the State Department's E-Passport program), and many others who previously held key positions in the federal government, all
joined Viisage/L-1 as members of the Board of Directors or as paid employees of Viisage/L-1. It must be really sweet to sign off on contracts worth millions of dollars, tens of millions or more in fact, and then turn right around and go on the payroll of the same company that you awarded the contracts to. Sure, Tenet, Freeh and the others may not have had to sign the actual contracts but certainly they are responsible for knowing who the contracts went to when they were in charge of their respective agencies and departments.
"L-1 dominates the state driver's license business. L-1 also produces all passport cards, involved in the production of all passports, provides identification documents for the Department of Defense and has contracts with nearly every intelligence agency in our government. To a large extent it is fair to say that your personal information is L-1's information. L-1 is the same company that thinks our political party affiliation should be on our driver's license along with our race. L-1 has a long history starting with its taking over Viisage Technology. It was a great sleight of hand, Viisage morphing into L-1 while Viisage was under investigation by our government," the report said.
Tenet, the former CIA director who was later on the board of L-1, was accused of passing on false information concerning Iraq's WMD (weapons of mass destruction) capabilities which led to the Iraq war. In the new world of surveillance that is emerging, L-1 is turning out to be very powerful, a multi-national giant which can potentially have control over countries. How, some skeptics might ask. Is this one more bogey by the activist lobby? Recently, L-1 has bagged orders from France as well as China.
UIDAI has been professing open standards. But the contract to L-1 is a slap in the face of its professed policy. By now, it is clear that UIDAI does not keep the promises it makes, so this does won't surprise anyone.
In the absence of a thorough audit of source code-the only way in which one can be sure-a backdoor can be easily inserted in any of the biometric scanners. This backdoor can not only transfer biometrics data to the vendor's database and to UIDAI's database, but it can also shut down the scanner at will. So, if the UIDAI project goes through and the biometric scanners and UIDAI's infrastructure becomes ubiquitous to the point that every financial transaction in the country requires a biometric scanner, it doesn't require a scientist to tell us that this is equivalent to handling the nation's economy in the hands of foreign companies. The danger posed to the nation's economy is no less than that from foreign companies controlling our telecom infrastructure.
In the case of telecom, after a lot of noise, some action is being taken. It is another matter whether the action taken is good enough or not. But no amount of charisma on the part of the UIDAI chairman can fix this problem which could affect the sovereignty of the nation.
The only way out is to ask all vendors of biometric equipment to open their source code and subject it to thorough audit by experts. That is how countries such as China would handle similar situations. Recently, China asked Microsoft to reveal its source code and Microsoft complied. The US too secures its own nationalistic interests properly. Sometime back the US stopped the sale of Tipping Point, a US security company, to a Chinese firm on the grounds of securing national interests.
Further, there could well be a vendor lock-in. L-1 has been on a buying spree, taking over smaller biometric companies. It is quite possible that it buys off other biometric vendors of UIDAI, resulting in a virtual monopoly, which could lead it to hike the prices for upgrades. What checks and balances has UIDAI got to ensure that this does not happen? More important, will the checks and balances, if any, stay or will they be dropped as time passes, for UIDAI's statements cannot be trusted as evidenced from its past actions.
Coming to the Unique Identification Number (UID), there has been misinformation by UIDAI that the social security number (SSN) of the US is equivalent to the UID in India. This is not the truth. The SSN does not have your biometrics, it is just a number.
The US is trying to introduce something called the Real ID, which has biometrics, and this is being stiffly resisted by Americans. As of 2008, over 20 legislatures in the US had passed resolutions (or legislation) opposing the implementation of the Real ID Act. Eleven of those legislatures had gone further, by passing laws specifically prohibiting compliance with Real ID. What is sauce for the goose may not be sauce for the gander. Will the Indian authorities wake up and investigate this critical aspect before it is too late?
(The author has a B Tech from IIT Bombay, and a PhD from Columbia University, New York. He currently runs a start-up, Teknotrends Software Pvt Ltd that does cutting-edge work in the area of network security).