CCPA Action Against Eureka Forbes for Misleading AMC Advertisements: Key Findings & Directions

Background: Why CCPA Stepped In

The Central Consumer Protection Authority (CCPA), exercising its powers under Section 10 and Section 18(1) of the Consumer Protection Act, 2019, initiated suo-motu proceedings against Eureka Forbes Ltd. after an alarming volume of complaints surfaced regarding its water purifier after-sales service and Annual Maintenance Contract (AMC) schemes.

Between 1 April 2023 and 27 June 2024, 508 grievances specifically linked to Eureka Forbes were lodged on the National Consumer Helpline (NCH). However, the aggregated complaint set examined by CCPA covered 5,008 grievances, spanning multiple categories including delay in service, denial of warranty repairs, defective products, misleading advertisements and overcharging.

The Authority, comprising Chief Commissioner Smt. Nidhi Khare and Commissioner Shri Anupam Mishra, proceeded to examine whether Eureka Forbes’ advertisements and AMC practices amounted to:

  • Misleading advertisement within the meaning of Section 2(28) of the Consumer Protection Act, 2019; and
  • Unfair trade practice under Section 2(47) of the same Act.

Nature of Consumer Grievances Considered

The NCH data revealed widespread dissatisfaction with the company’s after-sales conduct. The complaints, as summarised by CCPA, covered:

  • Delayed services – prolonged waiting time for technician visits
  • Complete non-provision of after-sales support
  • Repairs wrongly charged or not honoured during warranty
  • Defective products with no replacement or refund
  • Recurring defects even after purported repair
  • Non-delivery or wrong delivery of products
  • Damage or loss of products during service
  • Alleged sale of fake/duplicate products
  • Overcharging
  • Misleading advertisements around AMC, free services and guarantees
  • Promised gifts not supplied

Based on a preliminary screening of these grievances, CCPA suspected that Eureka Forbes was using its AMC offerings and associated advertisements as a vehicle for misleading and unfair trade practices.

CCPA Notice and Company’s Initial Response

Issues Raised in CCPA’s Notice

By notice dated 05.07.2024, CCPA called upon Eureka Forbes to explain, among other things:

  • Detailed terms and conditions of the AMC
  • Steps taken against service personnel or franchisees who allegedly cheated consumers
  • The typical lifespan of key components (candles, filters, RO membrane, UV lamp, taste enhancer etc.) in different regions and water conditions
  • Clarification on complaints relating to:
    • Delayed or non-provided services
    • Denial of repairs within warranty
    • Lack of replacement/refund for defective products
    • Misleading promotional claims

The notice annexed a broad set of actual consumer grievances, affording Eureka Forbes an opportunity to respond with facts and supporting documentation.

Eureka Forbes’ Written Reply Dated 22.07.2024

In its email response, the company broadly contended that:

  • It is a leading direct-to-home appliances company with a large, loyal consumer base.
  • It does not engage in unfair trade practices.
  • It has already provided appropriate clarifications and responses to consumers via the NCH portal.
  • Terms and conditions of products and AMCs are fully disclosed on its website https://www.eurekaforbes.com/terms-and-conditions and at the time of purchase.
  • Its manufacturing units are ISO 9001:2015 certified and operate with a robust Quality Assurance System.
  • Its water purifiers are validated by third-party testing agencies, such as Aquadiagnostics Water Research & Technology Centre Ltd., and are aligned with IS 16240:2023 for RO-based systems.
  • Optional attachments (like pre-filters and iron-removal units) are offered to tackle local water quality issues.

CCPA’s Assessment of the Initial Reply

CCPA found this reply largely unsatisfactory, noting that:

  1. No clear evidence of grievance redressal:
    The company did not demonstrate with records whether complaints had been actually and satisfactorily resolved, nor did it answer specific queries related to promises made during AMC sale and contradictory limitations later imposed at the claim stage.

  2. Discrepancy between asserted disclosure and ground reality:
    While Eureka Forbes insisted that all vital terms (e.g., “free repair visits”, “1 hour service and complaint resolution”, “one time free replacement of consumables”, “Get Free Lifetime Re-installation and Uninstallation”) were clearly explained, the volume and pattern of consumer complaints pointed to consumers not being properly informed of limitations, exclusions and conditions attached to the AMC.