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Fwd: Click to complain. Regulators get active

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  • Thiagarajan Arunachalam
    From: *karmayog - tanya* http://www.livemint.com/Money/F9o9RA6ynuIeDD4vMlO2kI/Click-to-complain-Regulators-get-active.html Click to complain. Regulators get
    Message 1 of 1 , Jun 17, 2013
      From: karmayog - tanya


      Click to complain. Regulators get active

      You should actively make use of these systems to get your complaints settled
      in a timely manner.

      Deepti Bhaskaran | Kayezad E. Adajania | Vivina Vishwanathan

      First Published: Fri, Jun 14 2013. 07 08 PM IST

      As you climb the stairs of Parisrama Bhavan in Basheer Bagh to reach the
      Insurance Regulatory and Development Authority (Irda) office in Hyderabad,
      you are greeted by a billboard in the stairwell that asks: Is your insurance
      company listening to you? If not, the billboard goes on, you can register
      your complaints online and track their status through Integrated Grievance
      Management System, IGMS, or call at 155255.

      This in fact is the first board you see before you enter the office. Its
      placement is indicative of the regulator's focus and its effort to reach out
      to aggrieved customers directly. And Irda is not alone in this regard.
      Capital markets regulator Securities and Exchange Board of India, Sebi, too
      has taken some institutional measures in the form of Sebi Complaints Redress
      System or SCORES to effect speedy disposal of complaints. In fact, SCORES is
      a step ahead because it also claims that it adjudicates on a case to case
      basis to ensure fair settlement. The mandate for IGMS, however, is to ensure
      speedy settlement of complaints and not adjudication. This is true even for
      the Standardised Public Grievance Redress System or SPGRS, that the ministry
      of finance has put in place only for the public sector banks (PSBs) for now.

      With regulators taking a keen interest, consumer grievance management seems
      to be getting institutionalized and companies are beginning to create
      dedicated departments to have a focused approach towards consumer
      complaints. But given the fact that it's still early days and the systems
      are yet to become popular, it maybe too early to judge their efficacy. But
      if the regulators are using the help of technology to reach out to you, you
      should also know how to reach out to them with your complaints. Read on to
      understand the processes of consumer grievance redressal set up recently in
      the financial sector.

      Capital markets and mutual funds

      Sebi set up SCORES in June 2011. So if you have a grievance with your
      investments that come under Sebi's jurisdiction, such as mutual funds (MF),
      equity shares, depository participants (DP) and brokers, you can complain
      directly to Sebi through SCORES.

      Visit Sebi's website (www.sebi.gov.in) or www.scores.gov.in, fill in your
      basic details like your name, address, email id, register your complaint,
      submit any documents that you may have as evidence and sit back. Sebi, then,
      forwards your complaint to the firm and keeps a track of it. You could,
      alternatively, send your complaint to Sebi by post.

      To ensure that the company against whom the complaint is filed actually
      receives the complaint, Sebi has made it mandatory for every listed company,
      MF, stock exchange, depository and so on, to nominate one person in charge
      of investor complaints. When Sebi gets a complaint, it sends an alert
      message to this official within seven days; he is then mandated to look into
      it. Though Sebi has not specified a fixed time limit within which the firm
      must respond, it mandates the company to send its first response within
      seven days of receiving the complaint and then about another 30 days
      generally to resolve the complaint. If the firm fails to respond, Sebi sends
      one to two reminders to the firm. If you have submitted the complaint online
      (on Sebi's website), your firm will email you the response and will also
      update Sebi. If you complain by post, the firm sends you its reply by post,
      and it is mandated to mark a copy to Sebi.

      If you are unhappy with the company's response, you can go back to Sebi and
      tell them to take a relook at it. Further, there have been instances where
      Sebi, on its part, is not particularly satisfied with the firm's response.
      In such cases, Sebi gets back to the company itself. "There was an instance
      where the investor did not get dividends for the shares he held of a bank.
      When the firm said that it sent duplicate dividend warrants, we got back to
      the company and told them to send this investor, two more reminders with a
      gap of seven days. We did this to ensure that if an investor misses one
      response from the company, the follow-up reminders should catch his
      attention," says a senior Sebi official who did not want to be named.

      Wait for about 30 days after you complain. If you don't hear anything, you
      can quote your Unique Complaint Registration Number (UCRN)-a number you get
      after you first lodge your complaint on Sebi's website-and send Sebi a
      reminder. Sebi penalizes those who fail to respond. The penalty varies and
      is subject to Sebi's decision. Such actions taken against firms are also
      periodically listed on Sebi's website here (http://tinyurl.com/mblgx3n).

      While Sebi claims that its process is robust, an investor association we
      spoke to, is not impressed. "Over all it is very unsatisfactory. There are
      areas of concern. Firstly, the communication between Sebi and the
      complainant, after the complaint has been filed, is absent. At best, the
      investor gets a response "in process" when he gets in touch with Sebi to
      check the progress, but that sort of reply is not enough. These are
      automated responses and don't mean much. Secondly, if grievances are just
      not resolved, despite Sebi's intervention, nobody knows what happens to such
      complaints. In such cases, where Sebi can't can't do anything, they still
      should be able to take some action. Which they don't do. I raised this query
      and asked them what they do in such cases. They didn't have any answer to
      that," says Virendra Jain, founder and president, Midas Touch Investors


      IGMS was set up by Irda in 2011. It works like a central repository of all
      the consumer complaints received by life insurance and non-life insurance
      firms. In that sense it's a handshake between Irda's grievance management
      system and the insurer's individual grievance management system. The way it
      works is like this. You can register a complaint either through mail, phone
      or even verbally with an insurance company and the insurer will register
      that complaint in its grievance management system. In fact it is mandated
      that every insurer must have a grievance redressal policy approved by Irda
      and a grievance cell that will be presided over by a nominated person from
      the board.

      Once your complaint gets registered, it will automatically flow in the IGMS
      which is monitored by Irda. Irda gives the insurer 15 days to settle the
      complaint. "Regardless of the nature of grievance, insurers have 15 days to
      settle the matter. However, 15 days start from the day of receiving all the
      necessary documents and proof," says Yateesh Srivastava, chief operating
      officer, Aegon Religare Life Insurance Co. Ltd. If your complaint is not
      settled within 15 days, the system will raise a red flag so that Irda can
      take note of the delay and direct the insurer to settle the complaint. You
      can also approach IGMS by logging into www.igms.irda.gov.in or calling up
      the toll free number 155255. However, Irda encourages you to approach the
      insurer first.

      The mandate of IGMS is restrictive because through it, Irda does not
      adjudicate on individual complaints. The basic idea of IGMS is to effect
      speedy disposal of complaints and have a repository that would help Irda
      track the nature of complaints in order to make systemic corrections. "We
      used to submit data on complaints even earlier but it was post-facto. So,
      the idea of IGMS was to track complaints and the effectiveness and
      timeliness of response on a real time basis. The regulator, however,
      depending upon the trends that complaints throw up, can always question the
      insurer," says T.R. Ramachandran, CEO and managing director, Aviva Life
      Insurance Co. India Ltd.

      In other words, Irda could go beyond the mandate. "Even as the regulator's
      role remains directive, it can track complaints and even penalize the
      insurer for a glaring mistake," says Srivastava. Irda also publishes data on
      complaints on its consumer awareness website www.policyholder.gov.in.
      According to this website, Irda in FY12 logged in about a lakh complaints on
      unfair business practice in the life insurance industry. This is 32% of all
      the complaints received. Irda on its website, www.irda.gov.in, also warns
      companies who violate regulations to fall in line. For instance in March,
      based on various compliants, Irda issued 15 warnings to Oriental General
      Insurance Co. Ltd and National Insurance Co. Ltd.

      The industry feels that IGMS has led to speedy disposal of complaints.
      However, some feel more needs to be done. "Customer complaints are
      definitely being taken more seriously since Irda has a constant watch but
      what action the insurer takes is still work in progress. Irda should also
      think about taking action on complaints because approaching the ombudsman is
      very time consuming and they are short staffed," says Kapil Mehta, founder,

      So if you want arbitration on the complaint, you will still need to go to
      the insurance ombudsman. Ombudsman are divided according to the regions and
      you will need to approach the one in your area. The verdict of the ombudsman
      is usually binding on the insurers and the ombudsman is supposed to issue a
      verdict within three months from the receipt of the complaint.

      Banking services

      Except for PSBs, the banking sector lacks a similar integrated redressal
      system. In case of the PSBs, the department of financial services under the
      ministry of finance has put in place an online complaint redressal facility
      and inked guidelines on SPGRS last year. This SPGRS forms needs to be
      uploaded on the website of the PSBs. For instance, in the Bank of Baroda
      website you can find the form at http://tinyurl.com/kda93kl.

      The idea was to meet the rising expectations of customers for prompt redress
      of their grievances. This system again works like a repository in the sense
      it integrates complaints received from multiple channels into a common
      digital platform. The bank in question is expected to solve grievances
      within three weeks or 21 days.

      The system has an inbuilt management information system for analysing
      performance. Says V.N. Kulkarni, chief counsellor, Abhay Credit Counselling
      Centre, "The SPGRS is one of the new ways to send complaints. However, the
      issue of resolving consumer complaints faster still remains. The move is in
      the right direction, but number of days to resolve the grievance should have
      been reduced further." He adds that, "Only banking related issues can be
      addressed through the existing system. For complaints related to third party
      products such as insurance and MFs sold through a bank, you will have to
      approach the respective industry and regulators. This is because banks only
      acts as an agent while selling the third party products." SPGRS is still
      being introduced in the banking system. We will have to wait and watch to
      see how it works out. You should remember that if the grievance is not
      solved via SPGRS, you can then approach the banking ombudsman.
      Banking ombudsman is one of the last recourses to address banking related
      complaints. The ombudsman will look into complaints against all banks. As a
      customer you can approach the ombudsman only after he has exhausted all the
      options of customer redressal services of his bank in 30 days. For
      approaching the banking ombudsman, you need to first check under which
      jurisdiction you fall (see http://tinyurl.com/aqkhmwc). Usually, the banking
      ombudsman gives ruling within 30 days. If you are not satisfied with the
      ruling of the banking ombudsman and you have been unable to get your money
      back, the next thing is to approach the appellate authority, who is Reserve
      Bank of India's deputy governor; currently, K.C. Chakrabarty.

      The second layer of consumer redress is being put in place, although with
      some restrictions, but it seems like it still has to cover some ground. You
      as a customer should, however, actively make use of these systems to get
      your complaints settled in a timely manner.

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