Consumer rights panel orders repayment of investment

The Ernakulam District Consumer Disputes Redressal Commission has ordered a financial institution to refund the investment made by a consumer in addition to paying him ₹1 lakh towards compensation and legal cost on charge of alleged investment fraud.

The Commission comprising president D.B. Binu and members V. Ramachandran and Sreevidhia T.N. issued the order on a petition filed by one Naushad of Ernakulam against the Thrissur-based URHDA Society.

The petitioner claimed to have invested ₹5.88 lakh and taken membership for ₹5,000. However, the opposite party allegedly failed to give the consumer the assured returns. The petitioner approached the Commission accusing the opposite party of deficiency of service and unethical trade practices.

The opposite party had guaranteed interest-free loan and housing scheme and allegedly convinced the petitioner that they were a cooperative society with the Reserve Bank of India (RBI) licence. Though the petitioner had lodged a complaint with the police, no action was forthcoming following which he approached the Commission.

“The opposite parties’ conduct reflects a clear violation of rights under the Consumer Protection Act, 2019. The opposite parties engaged in deceptive practices, withholding the complainant’s money even after its maturity and misrepresenting themselves as a legitimate financial institution. This not only caused financial losses to the complainant but also mental distress,” the Commission said.

The opposite parties falsely advertised themselves as a cooperative society and financial institution providing loans without interest misrepresenting their services, which constitutes an unfair trade practice under Section 2(47) of the Act. The evidence from the RBI and the Co-operative Registrar confirms that the opposite parties were not registered as claimed, and the brochure and website content indicate deceptive marketing, the Commission further observed.

Published - October 15, 2024 01:37 am IST