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Saturday, January 23, 2010

Edition 8: consumer case study

Students are always apprehensive about whether they will get a job after completing their studies. Being educated but employed is a legitimate fear.
Unscrupulous institutions exploit this fear to cash in by advertising courses and offering suitable placements on completion of the course. The consumer must always be careful, as can be seen from the recent judgement of a consumer forum.
Case Study: Amit Kudale a resident of Thane came across an advertisement in a newspaper about various courses being conducted by a so called International Academy, one of which was called 'Diploma in International Shipping Management'. A counsellor informed Amrut and his father that the course was recognised by the government of India and the Director General of Shipping, that it would be for a duration of 18 months and would cost them Rs 4.61 lakh. Institute offered to help secure an educational loan from financial institutions, and gave a 100% job guarantee.
Kudale paid the registration fees, but the receipt was issued stating that the amount had been received for 'General Purpose Rating' (GPR). Institute asked for further payments which were paid from time to time, totalling Rs 61,000. Kudale started attending the classes while his father tried to arrange for an educational loan on the basis of a recommendation letter issued by Institute. But financial institutions refused to advance a loan as the course was not recognised by a university or the government.
When Kudale informed the Institute about this, he was given a copy of a letter issued by International Maritime Academy. The letter only authorised Institute to market the course on its behalf and did not grant affiliation or recognition to Institute to conduct the course. Kudale enquired with the Director General of Shipping who asked him to visit its website for the relevant information. He was surprised to find the GPR course to be six months long costing Rs 1.3 lakh. Kudale wrote to Institute asking for a refund, but was ignored. He filed a complaint before the Consumer Forum for the Central Mumbai District.
Kudale, who argued his own case, stated that the jurisdiction clause printed on the receipts that any dispute would have to filed in Aurangabad would not debar the Central Mumbai Forum from deciding the complaint since the classes were being conducted at Dadar. The Forum upheld this contention. Institute did not bother to file their reply or contest the complaint, and it was decided ex-parte. The forum held that imparting of education for consideration amounted to a service, and the complaint was maintainable under the Consumer Protection Act. The forum indicted Institute of misrepresentation on several counts. Their advertisement did not disclose information regarding affiliation and recognition of the course, yet guaranteed a job. There was no such course as 'Diploma in International Shipping Management'. In order to pocket higher fees, Institute had misrepresented the duration of the course as 18 months instead of six.
The forum held that Institute had indulged in unfair trade practices and deficiency in service resulting in the loss of an academic year, causing considerable mental agony. It directed Institute to stop publishing misleading advertisements, and give Kudale a refund of Rs 61,000 along with 6% interest, compensation of Rs 1 lakh and Rs3,000.

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