The Telegraph
Since 1st March, 1999
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When free is foul

Bholanath Kanodia is indignant. He thinks he has been conned and that isn’t something he can take lightly. Last year, Kanodia made a five-year subscription for a sum of Rs 10,015 for two publications, Dalal Street Investment Journal, a bi-monthly magazine, and Flash News, a weekly newsletter — both brought out by the Mumbai-based M/s Ramdeo Media Pvt. Ltd.

There were incentives galore. The first 750 subscribers were to each receive a Videocon VCD player and a wrist watch for free. That wasn’t all. A lottery was held in which Kanodia won a Reliance mobile phone.

But unfortunately, like many free gifts used as a bait to lure the gullible consumer, nothing came of these apparently lucrative deals. The Videocon VCD player without a guarantee card which Kanodia received was defective, the Reliance mobile phone that arrived after a year — and that too after innumerable letters sent by Kanodia — was useless, while the wrist watch never arrived.

M/s Ramdeo Media Pvt. Ltd is apologetic and has promised to look into the matter but Kanodia is far from being pacified. He claims he has been intentionally cheated and that he has suffered mentally and financially and would therefore like to take action against the company.

Kanodia is not alone in his suffering. Almost every other day several people fall into the same trap. Free gift schemes abound all through the year. “Buy two, get one free”, “book an SUV and get a branded air-conditioner free” are common refrains. Promotional contests and lucky draws that directly or indirectly promote a business interest have also gone up over the past three years. Gullible consumers are little aware that these often fall under the ambit of Unfair Trade Practice. And, very few of those conned are willing to resort to the law.

“Usually, such gift schemes are intended to promote the sales of a particular product. But such schemes provide opportunities for deception as often, the gift turns out to be defective. This means that an offer of a free gift or prize is being made without the intention of performing it (as offered),” says advocate Prabir Basu of the Consumer Unity and Guidance Forum.

Basu points out that at times, the free gift’s cost is recovered in whole or in part from the selling price charged in the transaction, though the consumer is under the illusion that it is free.

Both these instances may be deemed as Unfair Trade Practice and fall under the provisions of Section 36A(3)(a) of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969. “In such cases, a consumer can file a petition (see box below),” he says.

But while filing a petition, consumers need to remember the finer points. Not many are aware that if they file a case for being duped by the free gift scheme under the Consumer Protection Act (CPA), it would be unsustainable in a court of law. That was what happened to Pradipto Saha a couple of years ago. Saha bought an air-conditioner and was promised a mixer-grinder as a free gift. But unfortunately, the gift left him grinding his teeth. His case, filed under the CPA, was not tenable in a court of law.

That is because the Consumer Protection Act, 1986, defines a consumer as any person “who buys any goods for consideration which has been paid or promised or partly paid or partly promised.” This, in effect, means that in case of a free gift scheme, since there is no monetary transaction involved, the duped person is not considered a consumer and hence the CPA becomes inapplicable.

But it is important to remember that when a purchaser is told than an article is free as a gift if another article is purchased, the word ‘free’ indicates that he is paying nothing for the article and no more than the regular price for the other. In such instances, a seller has no right to recover in whole or part the cost of the free article by increasing the price of the article purchased or by compromising on quality.

“If the seller violates these clauses and the buyer realises he has been misled, he can term it as Unfair Trade Practice and file a petition that falls under the purview of the MRTP Act,” explains Basu. He, however, adds, “If a gift scheme does not cause any loss or injury to the consumers, it cannot be regarded as an unfair trade practice”.

Fair or unfair — that, then, is for the consumer to decide. Perhaps, the easier way out would be to realise that there is nothing called a free lunch.

Reading the fine print
In case of announcements of a free gift, prize or similar offers, the consumer should check that all the terms, conditions and obligations upon which receipt and retention of the ‘free’ item are contingent are set forth clearly and conspicuously at the outset of the offer without any scope for misunderstanding. The disclosure of the terms of an offer set forth in a footnote of an advertisement to which reference is made by an asterisk or other symbol placed next to the offer is not regarded as disclosure at the outset.

The petition of a complaint should contain

• The name, description and the address of the complainant
• The name, description and address of the opposite party or parties
• The facts relating to the complaint and when and where it arose
• Documents, if any, in support of the allegations contained in the complaint
• The relief which the complainant is seeking
• The complaint should be signed by the complainant or his authorised agent.

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