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Regular-article-logo Saturday, 11 May 2024

Total Recall

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A Voluntary Product Recall Shows A Manufacturer’s Commitment To Quality And Enhances Its Brand Image. But In India, Few Companies Bother To Take That Step, Says Smitha Verma Published 01.08.11, 12:00 AM

When Raghav Sabharwal, a Delhi resident working at an Australian education firm, decided to switch from a hatchback to a sedan, he chose the Honda City. And ever since buying the car, he has been recommending the vehicle to everyone. “I have complete faith in this brand,” says Sabharwal. His faith was unshaken even when the Japanese auto major recalled 57,853 units of its mid-sized sedan, City, earlier this year.

“This was a very positive message, for here was a company which had the courage to accept that there was a flaw in its product and was ready to get it fixed,” says Sabharwal. The company, which runs its operations in India through a joint venture with the New Delhi-based Siel Group — Honda Siel Cars India — issued a recall notification to replace a faulty engine part.

A similar move by Philips Electronics India has also been welcomed by consumers. Last week, the Dutch electronics company announced the recall of its hair dryers owing to a glitch in the electrical circuit, which poses a potential risk to users. “As a precautionary measure Philips Electronics India is voluntarily recalling and replacing two foldable hair dryer models sold in India between September 2008 and February 2011,” the company said in a statement. It even put out advertisements in national dailies to make consumers aware of the recall.

“This is a commendable step taken by the company,” says Delhi-based consumer activist Ashok Kanchan. “It shows that the company cares for its customers,” he adds.

But not every manufacturer believes in a product recall policy. Not in India, at least. “In our country, there are hardly any concrete consumer laws for product recalls,” says R. Desikan, founder trustee of the Chennai-based Consumer Association of India.

Usually, companies recall products when they have defects that pose safety concerns and affect a large number of customers. Many Western nations have an explicit policy on safety-linked recalls. And instances of product recalls — from medicines to food products to automobiles to household gadgets — are quite common. “Recalls are preventive steps to save the company from costly litigation and goodwill loss,” says Bejon Misra, former chairman, Consumer Coordination Council, a Delhi-based advocacy group.

However, here in India, product recall policy is still at a nascent stage. In the past few years, only a handful of companies such as Maruti Suzuki, Tata Motors, Nokia and Mattel have recalled their products from the Indian market because of some manufacturing defect.

Experts say that the Indian government exercises little or no oversight in this regard and hence rarely presses for a product recall. “So far not a single case has ever been filed by any state or the central government against any manufacturer,” says Misra.

Thankfully, though, some big brands in India have started opting for voluntary recalls in case of defects in their products. Philips, for example, decided to take no chances after its hair dryers were found to have safety concerns. “The risk for consumers was very low, and no safety incidents have been reported in India. However, it has been found that in very rare cases the hairdryer can overheat when left plugged into the electrical connection. This poses a potential hazard, even when the appliance is switched off and not in use,” Philips Electronics said in the statement.

Some manufacturers believe that voluntary recall, when it is needed, actually enhances the brand image of a product. As Jnaneswar Sen, senior vice-president, sales and marketing, Honda Siel Cars India, points out, “We don’t think voluntary recall had any negative impact on our brand value. In fact, proactively replacing a faulty part further strengthened Honda’s image as a quality-conscious company in our customer’s minds.”

In India, most manufacturers seek to limit their liability in case of defect under such terms as “guarantee” and “warranty”. A guarantee refers to a formal promise made by the manufacturer that if the performance of the product is below par, it will be repaired or replaced or the money refunded. Warranty relates to the service of defective goods like the parts of a product. Both relate to performance but warranty is what most manufacturers dole out to consumers.

The Indian Consumer Protection Act, 1986, does not contain any provision for product recall, and consumer products in India are sold with a guarantee or warranty. This limits the extent of liability of the seller to just the replacement of the product or attending to the defects in the product.

Lata Bisht, a homemaker in Delhi, bought a split air conditioner two months ago, only to realise that there was a problem in its duct owing to which water was leaking into her room. Repeated calls to the manufacturer failed to elicit any response. “It was only when I threatened to take them to the consumer court that they rectified the problem,” she says. Bisht had wanted the entire AC unit replaced. “But they refused to replace it, saying they provide only a warranty,” she adds.

If the defect is a recurrent phenomenon in a multiple number of products, the manufacturer is duty-bound to recall it. But manufacturers in India often get away with not doing it because few consumers bother to take them to court as litigation can be expensive and long drawn out.

Lack of awareness is another reason why few consumers take manufacturers to court. “For example, how many people know that the government has formed a cell with the All India Institute of Medical Sciences where people can report adverse effects of drugs,” asks Misra.

Consumer activists believe there is now a need for a Consumer Protection Safety Authority, on the lines of organisations that exist in Western nations, to help resolve cases where manufacturers do not recall defective products voluntarily. “There should be a body in place which can pick up products, get it examined and if found defective get it withdrawn from the market,” says Desikan.

Until that happens, it would seem that consumers will just have to be inspired by the slogan “Jaago Grahak Jaago” and be more vigilant.

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