When a TV Buyer Was Sold Insurance Policy as Extended Warranty!
Vinayak Gupta (name changed) bought a Vu brand television (TV) in May 2016 from Chembur-based Kohinoor Televideo Pvt Ltd, with a one-year warranty from the manufacturer. While buying the TV, the dealer told Mr Gupta that he could get an extended warranty for the television just by paying Rs4,523 as onetime payment. Mr Gupta bought the TV with the extended warranty, but shortly after, he realised that the so-called warranty was, in fact, an insurance cover to pay for any claims during the warranty period.  
 
He says, "We were surprised to see the name of Bajaj Allianz on the final invoice received from Kohinoor but we were assured that this was the normal procedure and any problem in the TV would be taken care of during the period of four years or up to May 2020. We paid for a three year extended warranty (EW) for a sum insured of Rs32,990, applicable from 2 May 2017 till 1 May 2020.”  As it happens, Mr Gupta did need to make a claim, but more about that later.
 
 
An extended warranty is coverage for electrical or mechanical breakdown. It may or may not cover peripheral items, wear & tear. The indemnity is to cover the cost of repair and may include replacement if deemed uneconomic to repair. However, it is important for consumers to read and understand the terms & conditions offered at the point of sale. In retail consumer electronics, extended warranties cost 20% to 30% of the price, and give sales associates up to 15% commission at some retailers, says a report from WarrantyWeek.com.
 
Talking about its extended warranty policy, Bajaj Allianz says, “Any product that you buy comes with a manufacturer's warranty of one or two years, which covers you for any manufacturing defects of that product. Bajaj Allianz's extended warranty insurance policy lets you cover the expenses of repair or replacement of your product even after the expiration of manufacturer's warranty.” 
 
Coming back to the Guptas, the TV worked fine till January 2019 when its screen went blank. Mr Gupta registered a complaint on the number provided by Bajaj Allianz on the policy document. He was assured that his TV would be repaired within three days and, in case it could not be repaired, then Mr Gupta would get a new TV as replacement. 
 
The next day, someone called Sarfaraz visited Mr Gupta's home. "This person claiming to be an technician from Bajaj Allianz did not show any ID. He checked the TV, and took some photos with his mobile. He left our house without giving us any copy of his report or even an acknowledgement. When asked later, Sarfraz told that he had prepared a job sheet and sent it to the insurer," Mr Gupta says.
 
On the very next day, Mr Gupta received three calls from the same mobile number informing him that his complaint was forwarded to Vu. The callers who identified themselves as Nilesh, Sagar and Sonali, told Mr Gupta not to inform the TV company about the EW from Bajaj Allianz else they will not repair the TV. They also told him to pay visiting charges for the Vu technician, if asked that would be reimbursed.
 
The same day, one Vinod from Vu TV visited Mr Gupta's home and checked the TV set. "He told us that he will inform his seniors and Bajaj Allianz and that he will come with some part to be replaced the next day. On 24 January 2019, he came with an electronic board. He opened the TV, replaced the board and switched it on. However the TV still did not work. He told us that he will inform his seniors and Bajaj Allianz by mail. He, however, did not give any concrete line of action or the next steps," Mr Gupta says.
 
When Mr Gupta called, he was told by Sonali that they have spoken with someone in Vu and the TV manufacturer is arranging for some parts to be replaced and would send a quotation. But nothing much was happening either with the insurer or the TV-maker. 
 
On 29 January 2019, Mr Gupta managed to speak with one Anil from Bajaj Allianz and Nilesh. He says, "In the afternoon, we were informed that a quotation of Rs38,000 given by Vu for the panel is very high and they can neither get the TV repaired nor they can replace it. He offered to give us Rs22,000 against the EW policy. He was not willing to give any concrete answer as to why Bajaj Allianz was unwilling to reimburse the entire insured amount. Meanwhile, Vu did not take any responsibility to get the TV in working condition."
 
 
Mr Gupta also received a claim summary-cum-claim form and a consent letter from Bajaj Allianz for settlement of his 'extended warranty' insurance policy. "The claim summary is filled partially and the consent letter is a completely one-sided document asking us to forgo all our rights and cancel the policy from the date of loss. The document offers a meagre amount of Rs22,267 as full and final settlement, which included the value of scrap value of the TV and close the issue forever. This would be the depreciated value of the TV," Mr Gupta says. 
 
 
In a statement Bajaj Allianz General Insurance, says, "As per the policy and the indemnity clause, a 10% depreciation has been considered for each year i.e. depreciation of 30% for three years for providing the compensation of Rs22,267 to the customer. The compensation was made within 48 hours of receipt of documentation and subsequent confirmation from the customer."
 
Mr Gupta wanted to file a case in district consumer forum against Vu TV, the dealer who sold him the extended warranty policy and Bajaj Allianz. He along with his wife visited Moneylife Foundation's daily free guidance clinic for guidance
 
After discussion, Mr Gupta was given two choices: file a case in consumer forum or accept the offer from the insurer. Filing case in a consumer forum has become a time-consuming issue as the first hearing may not take place for about three months and how many days it will take for final judgement. In addition, there is no guarantee that Mr Gupta would have received his entire claim amount of Rs32,990. There is also a cost for filing complaint in consumer forum, like drafting complaint, affidavits, attaching all proof and then making multiple sets of this complaint. 
 
Since Mr Gupta had used the TV for about two years, and with prices of new sets falling day by day, it was suggested to him that in this exceptional situation, it may make better sense to use the proceeds received from Bajaj Allianz to buy a new TV from reputed company instead. 
 
"We discussed your suggestion among our family members and found it was practical solution that would give us peace of mind. So we agreed to the claim settlement. Bajaj Allianz collected our non-working TV set and within three days paid Rs22,267 as agreed. We will be buying a new TV set and this time would check if the extended warranty is indeed provided by the manufacturer and not an insurance company," Mr Gupta concluded.
 
While Mr Gupta has got away with minimal damage from a bad deal, this may not necessarily be the case with other products, which do not depreciate as rapidly or where technology improvements do not lead to better products being available a lower rates every years. 
 
Yet, most consumers who can afford it, happily pay up for an EW, which may often be hard-sold by an insurance company whose way of evaluating a claim is completely different from what should happen in a straight-forward EW purchase. 
 
Matters like these ought to be adjudicated upon by court or have clear rules prescribed by the ministry of consumer affairs. But that will be another battle for someone else to take up.
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COMMENTS

VIVEK SHAH

3 months ago

I just realised after reading this that even I have been issued a insurance policy camouflaged as a extended warranty when I bought a Philips TV from a dealer in Surat. This is truly an eye opener.

Airfares soar over 100% as airlines cancel flights
Air passengers face the grim prospects of high air fares and fewer flight choices as several airlines cancel operations due to a number of reasons including the grounding of 737-MAX aircraft.
 
According to industry insiders, some sectors have shown a rise of more than 100 per cent in last minute bookings. 
 
"With an unprecedented number of planes now grounded due to various factors, reduction in seat capacity has led to an increase in fares overnight. Last minute airfares on Wednesday increased to more than 100 per cent on some key routes like Delhi-Mumbai, Mumbai-Chennai, Mumbai-Kolkata and Mumbai-Bengaluru as compared to same time last year," said Aloke Bajapi, CEO and Co-founder, ixigo.
 
"Spot fares for Mumbai-Chennai are touching Rs 26,073 as opposed to Rs 5,369 the same time last year. High airfare patterns are expected to continue in the short term with Holi and summer school holidays round the corner, resulting in an increased demand."
 
Operations of airlines like SpiceJet and Jet Airways have been hit due to the government's Wednesday decision to join a global grounding of 737-MAX aircraft following a crash in Ethiopia.
 
In India, SpiceJet and Jet Airways operate 17 Boeing 737-800 MAX aircraft - Spice (12) and Jet (5). A part of Jet fleet has already been grounded due to other reasons.
 
The grounding led SpiceJet to cancel 14 flights on Wednesday. This number is expected to touch 32 on Thursday.
 
Apart from SpiceJet, Jet Airways, which faces financial challenges, has already grounded four more aircraft over non-repayment of dues to lessors, taking the total to 32. 
 
The company in BSE filings has said that its 19 aircraft were grounded in February over non-repayment of dues to lessors, while 13 aircraft were grounded this month, taking the total to 32. The Jet Airways Group operates a fle et of 123 aircraft. 
 
However, around 50 planes are said to be non-operational due to a host of reasons, including lack of spare parts.
 
IndiGo faces massive turbulence of pilot shortage, leading to truncated flight schedule
 
Earlier, the airline said that 30 of its flights which have been affected represent only 2 per cent of its network. It has decided to curtail its schedule till March 31, by about 30 flights a day. 
 
"As a proactive measure, IndiGo has decided to continue its curtailment until the end of March. This measure has already been implemented and passengers informed," the airline said in a statement.
 
"These medium term cancellations have been made to minimise the impact on passengers as alternative travel options have been offered well in advance. The operations will be normalised by the start of the summer schedule."
 
For sometime now, Air India has grounded 17 aircraft due to technical reasons.
 
On Wednesday, the government had advised domestic airlines not to go in for predatory air fare pricing as several 737-MAX aircraft were grounded due to safety reasons.
 
Civil Aviation Secretary Pradeep Singh Kharola said: "We have advised the airlines... that they should not use it (grounding) as a reason to jack up their fares." 
 
"They have promised they will go as per normal routine. DGCA has just said that it will be monitoring all the sectors very closely."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Indian Consumers: Ask Your MPs to Adapt the Consumer Protection Bill When Parliament Assembles
The Consumer Protection Bill (CPB) 2018 was passed by the Lok Sabha on 20 December 2018. Actually, this bill was tabled in 2015. However, Raja Sabha did not pass the bill and the new Parliament has to take this up after the election. 
 
CPB was not at all controversial. All political parties would have been interested to support the long suffering consumers if only they realized that their voters demand from them a robust act to protect their rights. After all, voters are consumers in one way or the other. But it did not happen. 
 
The new bill had several consumer friendly provisions. It would have established a Central Consumer Protection Authority to protect consumer rights and to look into misleading advertisements, had provisions to fine and ban on celebrities for endorsing misleading advertisements, would have encouraged alternate dispute litigation mechanisms etc.
 
Consumer Voice (CV), a well-known Delhi based consumer protection organisation has started a petition to urge all the political parties to pass the consumer protection bill (CPB 2018) when the new Parliament meets after the election. CV publishes a monthly magazine to inform the consumers of the comparative testing of products and services. Such information is invaluable for consumers and not to be misled by all kinds of ads. 
 
Unless we the citizens show interest, new parliament irrespective of which combination of parties come to rule is unlikely to take this bill on a priority basis. What a shame that even after passage of four long years, we have failed to have a progressive consumer protection act to replace the one of 1986. This is mostly because of consumer indifference. 
 
Some efforts have been made in the past to get signatures for petition like this, but none achieved the critical mass of at least one lakh signatures (even one lakh is not much to speak of in a society where crores are active on the social network). 
 
Some may argue what is the use of passing another law when the previous law has not really helped the consumers as expected. Consumer courts established  under previous law have adapted the dysfunctional culture of general courts giving never ending adjournments and has failed to uphold the spirit of giving judgements with no or minimum adjournment in 90 days. This is mostly because we the citizens have failed in our responsibility of putting pressure on the government to implement the law properly. Hopefully, the new consumer movement which is now being promoted by some NGOs to push the political parties to adapt a more progressive act may make a difference.  
 
  
 
We all talk of how social network plays an important role. Can anything be more important than helping the consumers who face problems every day while buying goods and services either from the public or private sectors? 
 
If we the citizens take interest, we should be able to get at least a million signatures to the petition. It will definitely make a difference. Our goal is to get millions to sign the petition to convince all the political leaders to put consumer protection on their manifesto. 
 
Link to sign to petition is at http://chng.it/LfD68DFn.  
 
Soon after reading the article, do not postpone to sign it. It takes less than a minute. 
 
Let us get inspired by Swami Vivekananda’s words, “Arise, awake and stop not till the goal is reached”. 
 
(Bhamy V Shenoy is a governing council member of Consumer Voice
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COMMENTS

BR

3 months ago

Only honest & brave people & governments will care to save Consumers. People get the government that they deserve.

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