The Effectiveness of Consumer Courts in the Age of Hyperconsumerism
I’m not a legal expert or an advocate. I’m a User Experience Principal Consultant. We often spend our time documenting observations to improve the ‘World System’ like social anthropologists.
This article is an attempt to surface the obsolete legal system in the age of hyperconsumerism and the rising risk of discrimination (caste, race, class) by implanting man-made and inherent algorithmic bias in the system. I’d explain the different facades using a collection of incidents around the health insurance sector, IRDAI Bima Bharosa Grievance System, Insurance Ombudsman, National Consumer Helpline, and the Consumer Dispute Redressal Forum.
I have filed a lawsuit in the Consumer Dispute Redressal Forum, in my personal capacity, as a layman, which imparts me to observe a lot of activities in due course of time that I’m listing down best to my knowledge and experience. Consumer Dispute Redressal Forum is a Quasi-Judicial body under the Ministry of Consumer Affairs, Government of India, also known as Consumer Court in colloquial language. Consumer Commission overviews National, State, and District level Consumer Dispute Redressal Forums. The National Consumer Helpline and Consumer Dispute Redressal Forums are two different entities. You are expected to call the National Consumer Helpline to find a resolution and then move to the Consumer Dispute Redressal Forum if the issue persists. I’ve interchangeably used Consumer Courts and Consumer Dispute Redressal Forums in the article.
The Dynamics between Hyperconsumerism and the Legal System.
We are living in a tech-savvy society in the age of hyper-consumerism. Hyperconsumerism could be made possible by technological advancement which automates and simplifies a lot of manual tasks along with bringing people closer to one another from different parts of the world through innovation in the field of Information technology. Tech companies are innovating at the scale of 10 million users at a steadfast pace, so they also have the scope to instill minuscule vices to exploit at scale at a steadfast pace. Today every multinational company is a Tech company. Tech companies operate in a very different manner from the mom & pop stores. The age-old lengthy procedures of consumer courts are suitable to correct the course of direction of the mom-and-pop stores in silos. However, the consumer court’s lengthy procedures are not suitable for checking the steadfast pace and scale of innovation and exploitations at which the Tech companies operate. Consumer courts require at-scale class action lawsuits and steadfast turnaround time, to serve natural justice at scale.
This is to put things into perspective, Here is a comparison between the drastically reduced time to reach fifty million users by different sectors and companies over the ages. (Link)
Institutionally Exploiting Consumers by Applied Statistics.
It isn’t surprising if various sectors co-ordinately exploit the consumers by applied statistics. I’ve been the victim of non-reimbursement of Insurance claims falsely. Pondering on my situation, I came up with some speculations. I’ll share those speculations with you referring to the insurance sector. Although, the attributes of these speculations may prevail in other sectors as well.
We need to learn about the life cycle of the complaints made in the insurance sector to understand the many ways various latent facades could be manipulated statistically to exploit the customer.
Life Cycle of a Dispute in Retail Insurance.
Generally, insurance companies have three levels of grievance redressal escalation hierarchy. By the time the discussion concludes with these three levels, one after the other, a mountain of calls and emails emerges.
The grievance is then moved to the first of the four levels of conflict resolution in this order, IRDAI Bima Bharosa Grievance System, Insurance Ombudsman also known as Bimalokpal, National Consumer Helpline, and Consumer Dispute Redressal Forums (District, State, and National).
A complaint made to the IRDAI Bima Bharosa Grievance System would circle back to the Grievance Redressal Office of the Insurance Company. The expected time to resolve is 15 days.
The next in the escalation hierarchy is the Insurance Ombudsman which takes about a couple of months to find a resolution to the matter. The complaint made to the National Consumer Helpline must be addressed within the stipulated time of 15 days by the Insurance Company. Although the lawsuit filed in the Consumer Dispute Redressal Forum is a systematized formal process that takes a longer time.
Generic Lawsuit’s Life Cycle in Consumer Dispute Redressal Forum.
The procedures in the consumer court are time-consuming, tiring, and obsolete. Someone willing to file a lawsuit in the consumer court for the first time must be prepared to face a sequence of difficulties.
Everything needs to be printed and submitted in the form of a hard copy to the consumer court. The same documents need to be printed and sent by registered post to the service provider. Most of the litigations drag over 3 years. Some white and black lawsuits settle in just over one year. Often the complainant follows a hierarchy to finally reach the consumer court. The consumer first tries to solve the dispute by negotiating it with the Grievance Redressal Office of the service provider which is the highest level of the Customer Care Department of the Company. Then the complainant escalates the matter to the Ombudsman. Then the complainant escalated the matter to the National Consumer Helpline. Then the complainant reaches the National Consumer Dispute Redressal Commission to file the complaint with the District Consumer Dispute Redressal Forum also known as Consumer Court. Therefore, the actual journey made by the complainant passing through various statutory and regulatory bodies is much longer than the duration taken by the Consumer Dispute Redressal Forum. The complainant has to visit the court 7–8 times over the course of one year. Every time the complainant visits the court, he is expected to submit the hard copy of successive documents in the court and send the same copy of documents by registered post to the service provider. The complainant needs to visit the District Court a few times to get some of the documents notarized like the petition and the evidence-related documents. Visiting court, waiting for your turn, and returning take up the whole day. Once in a while, we come across very positive news on Consumer Court about a plaintiff receiving a handsome reward with sted fast justice, which seems nothing more than a PR activity concerning the actual reality personally observed.
Exhausting IRDAI Bima Bharosa Grievance System, Insurance Ombudsman, National Consumer Helpline, and Consumer Dispute Redressal Forums provide favorable opportunities for Insurance Companies.
I am assuming, that moving the smallest of matters to the IRDAI Bima Bharosa Grevience System, Insurance Ombudsman, National Consumer Helpline, & Consumer Court in this chronological order, on purpose might be an effective customer service cost-cutting tactic incorporated by the companies. This will save a lot on hiring, training, and remuneration to on-par efficient customer executives. This is one way of soaring revenue in the account books. It seems to me that companies are deliberately passing minuscule & micro conflicts of thrifty amounts to burden and exhaust the Ombudsman System and Consumer Court. A system that is exhausted will result in a delay of the proceeding that will discourage the consumers from lodging micro complaints of thrifty amounts with the Ombudsman & Consumer Court in the future. The consumers will also advertise their situation with other consumers through word of mouth and social media. This will create a chain reaction to further discourage consumers from lodging the micro complaint of thrifty amounts with the Ombudsman and Consumer Court by passive methods which is another way of soaring the revenue of the companies on account books. Deliberately burdening the legal system will require the Government to allocate additional resources that result in overspending public funds beyond estimation passing the weight onto the shoulders of the public in the form of additional taxes and surcharges.
Tossing and Tiring the Complainant Between Various Statutory and Regulatory Bodies to Sweep the Matter Under the Rug.
Though the IRDAI Bima Bharosa, Insurance Ombudsman, Consumer Court, and Appellate are positioned under different ministries in the government of India, even though the complainants’ expectation and sole objective from these Regulatory, Quasi-Judicial, and Judicial bodies are to receive justice within the stipulated time. So these departments shouldn’t be made a tool of tossing, tiring, and discouraging the complainant to sweep matters under the rug. One regulatory or legal entity’s failure should be seen as the failure of the legal system. The legal system should therefore collectively take appropriate corrective actions to restore the faith of the People of India in the legal system.
The article, ‘How effective is complaining to the Insurance Ombudsman and the Insurance Regulatory and Development Authority of India (IRDAI)?’ discusses the first-person account of one such scenario in detail. (Link)
Fraction of the Plaintiffs Making it to the End of the Journey.
Visiting the court for a thrifty amount dispute is a hassle because of lengthy procedures, followed by submitting a heap of hard copies, followed by multiple appearances. The huge number of thrifty amount disputes w.r.t. the few complaints have been made in consumer court w.r.t. the fewer complainants, actually following through till the end to receive relief from the court, decreases considerably in each step. Currently, the situation is such that, even if the consumer court pronounces a verdict in favor of the plaintiff after year-long litigation, the service provider ends up making a lot of money in this one-year duration by exploiting the consumers only to reimburse a fraction of that earning as penalty to one of the plaintiffs that won the lawsuit. Likely, the companies have already statistically calculated to take advantage and exploit the loophole.
Companies Taking Undue Advantage of Capped Maximum Relief.
The number of plaintiffs who made it to the end of the journey, in my opinion, has been statistically calculated by the companies. The capping on the maximum relief amount that could be disbursed by the district consumer court is working like protection by the Government of India for the companies by applied statistics. It means the companies are booking huge profits by deliberately committing thrifty amount disputes in a very large volume only to reimburse the district consumer court capped relief amount to the very few complainants, that could make it to the end. Let’s take the example of a Healthcare Insurance company, the 20–30 times relief disbursed by consumer forums on a thrifty amount like 500, 2000, and 10k lawsuit, to the fraction of policyholders (quasi-judicial patients) that could make it to the end of litigation and win the lawsuit, in most cases equates to less than a daycare procedure or 24-hour hospitalization that isn’t a matter of concern for Healthcare Insurance companies. Unlike a disease or accident that is contingent, the thrifty amount’s financial exploitation on policyholders is intentionally committed by insurance companies.
Reforming Insurance Companies by Restructuring the Incentive Model.
What incentives do the insurance companies get for settling claims quickly and effortlessly?
One may argue that the claim settlement ratio will drop. How many people scrutinize the intricacies of claim settlement before taking insurance? However, there is another trick being played behind the curtain to refresh the claim settlement ratio every few years that I’ve discussed in detail in the section Board Members and Stakeholder Cycle.
Could it be an outcome of Lobbying and Monopoly by a Selected Few Insurance Companies?
A brand grows by the trust of people. Marketing can only take a brand so far. Gradually people come to know the truth. Yes, if the communication between people in digital media is rigged, then the news about the wrongdoing in the company will not be able to spread from one person to another through word of mouth. This strategy indirectly by shadow-ban is already being implemented by social media companies. The Dead Internet Theory documentary discussed the idea of ‘echo chambers’ to wonderfully explain this phenomenon. (Link)
The Insurance Companies will not hesitate to exploit the weakest link in the equation which is the vulnerable retail consumers if a selected few insurance companies with the largest market share in the insurance sector develop collusion among themselves. In such a scenario the insurance companies will not be concerned about retaining the trust in their brand among the users. Even if the consumer leaves one insurance company and ports to another due to non-reimbursement of claims, it will not make much difference to anyone. In other companies too, there will be only a little possibility of the Insured person’s claim being settled. In such a situation, an insured person of one company will port to the second company, an insured person of the second company will port to the third company, and the insured person of the third company will port back to the first company in due time and therefore, the coordinated business will go on as usual.
Business Standards has published a piece of news, The Association of Healthcare Providers India AHPI, which is a collective of hospitals and other healthcare providers, contended that private insurance companies have formed an “alarming cartel”. Dr Girdhar Gyani, Director General of AHPI, said, “Consequently, we are now considering legal action and approaching the Competition Commission of India to draw attention to these concerning practices.” (Link)
Hopefully, intervention by the Competition Commission of India for conciliation would attain a complementary relationship between the donor insurance company and the recipient hospital to work together to provide better health outcomes and financial protection for insured retail consumers.
Board Members and Stakeholder Cycle.
There is an undercurrent of Board Members’ (Stakeholder) lifecycle over the Management team’s life cycle that is responsible for the perceived priorities and decisions that are taken in due time. The next in the hierarchy of Management’s lifecycle is the Program lifecycle and Product lifecycle successively. The Company’s products and services were first marketed with drums and barrels. The company with hyper-acceleration focuses on customer acquisition. A lot of money is spent on innovation, process improvement, and marketing during this phase. Product Consultants, Analysts, and Research Activities are expensive. The company rises steeply in first few years. The mission is streamlined with the vision of the Organization.
Then the stagnant phase arrives. Over time, product consultants are replaced by operation and sales. This is mainly because of two reasons. Sometimes after the product is launched the requests for radical innovation slow down and the focus shifts to maintaining the routine tasks by operations and sales. At this point, the company also tries to recover the hefty budget spent during the research phase which leads to cost-cutting activities. This is when the company’s priorities shift towards resource management in an attempt to achieve a break-even point. The people in the operations apply all types of cost-saving measures to sustain the bleeding expenditures. The innovation, processes, resources, and employees were crippled during this phase. The product and service innovation bloat out of proportion administered by operations and sales head honchos in an attempt to find ways to the break-even point. The spreading portfolio of products and services further adds worries to the woes. The change management consultants have been called in at the wee hours to suggest a fresh roadmap to rescue the debt-strapped company. But this is a gimmick. The actual job of these consultants is to rescue the board members, and stakeholders and replace them with scapegoats.
Then the decline phase arrives. The clever board members and stakeholders slowly move out of the board. The change management consultants identify Scapegoats in different facades of the company. They are promoted to pass the blame conveniently. The company has been declared fund-deprived, dysfunctional, and a victim of dynamic market consequences to gain the pity of the public, government, and regulators.
The merger and acquisition refresh the claim settlement ratio of the insurance companies and similarly, the obsoletion of the older products’ customers assimilated into the newly launched platter of product line refreshes the claim settlement ratio of the earlier series of products.
Meanwhile, the wealthy stakeholders who had already departed from the board invested in another company from the same sector. The cycle of promoting the new company with bells and whistles begins. We can describe all of it in a one-liner.
Eventually, every Innovation Consultant will be replaced by a Lean Operation Manager in every Department of the Company till CEO. This will continue until the company burns down to ashes only to regenerate as the Phoenix somewhere else in the same sector.
Steve Jobs explained in one of his interviews the occasion in the board members’ and stakeholders’ lifecycle, where the sales and operations head honchos seize the opportunity to lead the company. Steve Jobs on the role of product and marketing people.
The observation adequately conveys that in the age of hyperconsumerism, quick turnaround time, and rapid Stakeholders’ lifecycle, Consumer Courts are expected to be convenient to contest litigation from the comfort of our homes with steadfast justice delivery mechanisms to serve justice to an instant delivery generation. Therefore, Consumer Courts shouldn’t replicate the processes brick by brick from moderately slow-paced Civil Courts and need ground-up innovation.
How can the Ministry of Statistics and Programme Implementation, Government of India forecast Consumer Dispute Redressal Forum (Consumer Court) expansion to adequately address growing hyperconsumerism in a tech-savvy society?
I’m hopeful that my observations will be cherished by the Government and Public Sector Organizations to join hands with the Tech and Statistical Analysis Companies to transform the different aspects of the Consumer Courts turning them into a practical and viable legal option for the public living in the most populated country of the World, that is India, surviving in a hyper-consumerism, tech-savvy society.
Some of the new age policies recently sketched for governing Data, AI, Deceptive Algorithms, and UX Dark Patterns are listed here.
The government of India enacted the Digital Personal Data Protection Act in August 2023. The Government passed the Mediation Bill 2023 in August 2023 which is expected to provide immense UX job opportunities for UX Design Professionals by digitally innovating legal processes. The government issues a list of Dark Patterns in December 2023.
The above passages stem from a case in the Consumer Dispute Redressal Forum that has been elaborated by touching upon many different perspectives in the article ‘Judicial Investigation Friendly Digital Systems, Judibility.’ (Link)
The Cavity in Lok Adalat.
Once in a while, a Lok Adalat is arranged by the consumer court to solve piling up pending cases at once. The regular bench is replaced with a special bench for Lok Adalat (best to my knowledge). Some cases are more complex than others. The gravity that the complainant has built brick by brick over a considerable period in front of the regular bench can’t be acknowledged by the new bench with the same intensity. This approach tilts the advantage toward the service provider.
Consumer Courts Failing in Restraining the Exploitation.
We often witness thrifty complaints of a similar nature as the relief amount is not checking the wrongdoing of the companies once and for all. Prevention is better than cure, similarly, relief should be an occasionally grieved measure, and rather the primary objective should be to provide protection to the consumers and citizens. Such institutional exploitation by companies in unanimity with the quasi-judicial consumer forums puts every policyholder at risk. Thus we all should request the Government of India to bring in the provision of a class action lawsuit and amend the capping on maximum relief, in the hope of sending a positive message loud and clear to the retail consumer sector.
I’ve discussed it in detail in one of my articles, ‘Quasi Judicial Patients, & Victims of Insurance Companies Institutional Exploitation.’ (Link)
Societal Impact of Consumer Forum’s Obsolete Practices.
In the age of hyper-consumerism, every day an individual makes a lot of transactions with plenty of businesses. If one consumer dispute takes one year to resolve and requires the discussed lengthy procedures, then visiting the consumer court seems impractical unless the disputed amount is significantly high. In the case of thrifty amount disputes, the people would sway to settle the dispute in the streets by fighting among themselves instead of visiting impractical consumer court. If in case the transaction has been carried out online and the business establishment is in another city. People could be easily duped by those who have been already discouraged by the consumer court’s time-consuming, inconvenient, irritating, complex procedures. This cavity will be taken advantage of by the businesses. Actually, such a cavity encourages businesses to deliberately exploit consumers.
I’ve touched upon this aspect in another article, ‘Grocery E-Commerce, Micro Dispute, Social Capital & State of Law in Developing Countries.’ (Link)
Everyone is at Risk.
Say, in the case of health insurance, every health insurance policyholder is at risk of becoming the next victim of institutional exploitation by insurance companies in unanimity with the quasi-judicial consumer dispute redressal forums in India.
Splitsvilla fame Subuhi Joshi recounts the ordeal with a health insurance company; with tearful eyes she alerts fans. (Link)
Dexterous Advocates Drawn by the Handsom Remuneration Associated with Class Action Lawsuits.
Class action lawsuits involve a significant amount of money. The amount of money involved will motivate quality advocates on behalf of both the parties, the complainant, and the respondent to show interest in cases of the institutional exploitation of thrifty amounts by service providers.
I’ll leave you with these pressing questions to ponder on that I’ll explain in upcoming posts.
Sociologists, statisticians, data analysts, data scientists, and cyber security professionals might find the questions intriguing. It is because the Citizenship Amendment Act, the National Population Register, and the National Register of Citizens would likely require race and caste census to identify hereditary of people to adequately enforce the law. The data once collected would leak into the dark web as any other set of data, therefore retail sectors like the health insurance sector will make an unanticipated participation in the Tech Savvy Geo Politics.
- How can we investigate caste (racism) discrimination in insurance claim reimbursement?
- How may we run semantic analysis on the insurance sector to investigate race and caste discrimination in claim reimbursement?
- How can we investigate caste (racism) discrimination by maximum refund, in the form of discounts, cashback, and claim reimbursement in the insurance sector to a particular stratification?
- How can we investigate caste (racism) discrimination in reimbursing the maximum amount in each insurance claim for one stratification compared to reimbursing the bare minimum necessary amount for another stratification for claims of a similar nature?
Last edited on 05 Feb 2024.
I’ll conclude the sincere article on a lighter note to get rid of the steam with an Indian meme reel filmed in Silchar, Assam. (Link 1) (Link 2)
Don’t forget to check the comments and show your appreciation to the writer if you liked the article.
The article, ‘Judicial Investigation Friendly Digital Systems, Judibility’ discusses the complexities of digital systems and the lack of capability of comprehending Technology-related matters in the right context by a layman, his peer group, and the advocates, living in a tech-savvy society. (Link)
