CCPA Initiates Class Action Against Ola Electric Amid Surge in Consumer Complaints

The Central Consumer Protection Authority (CCPA) has commenced a class action lawsuit against Ola Electric, India’s leading electric two-wheeler manufacturer, due to a massive influx of unresolved complaints. This decision marks a significant step by the authority in addressing consumer grievances, according to Nidhi Khare, secretary of the Department of Consumer Affairs, who shared details with Mint.

This legal action follows efforts by Ola Electric that were deemed insufficient in addressing complaints received between September 2023 and August 2024. A total of 9,948 grievances were recorded on the National Consumer Helpline (NCH), primarily focusing on delayed deliveries, defective products, and misleading advertisements. Ola Electric has been given a 15-day window to respond to these allegations, which include breaches of the Consumer Protection Act, 2019, concerning unfair trade practices and service deficiencies.

Nidhi Khare highlighted the rise in consumer complaints, describing the situation as grave, with issues remaining unresolved despite the substantial number lodged against Ola Electric. “When such a high volume of complaints is received, it necessitates class action,” Khare was quoted as saying, emphasizing the need to handle widespread consumer issues systematically.

The complaints forwarded to Ola Electric for resolution had reportedly reached over 10,000 by the CCPA, highlighting alleged practices such as charging consumers during periods promised to be free of service costs. Khare condemned these practices, stating, “Such actions are unacceptable, especially when customer services are supposed to be cost-free at certain times.”

The points of contention include delayed scooter deliveries, with 1,899 complaints, 3,364 instances of service delays, faulty vehicle build reports, and allegations of misleading advertisements about product performance. Khare stressed the importance of treating consumer feedback seriously, suggesting that ignoring such input is detrimental.

Ola Electric acknowledged the receipt of the notice and assured a detailed response to CCPA concerns, affirming that the issue would not disrupt its financial or operational activities. Efforts to rectify service-related issues include the reorganization of service teams and the expansion of service touchpoints.

In a broader context, the CCPA has previously addressed similar consumer complaints. Notable instances include cases against misleading claims by educational coaching institutions and efforts during the pandemic to secure refunds for consumers from airlines and travel agencies. These interventions underline the authority’s commitment to safeguarding consumer rights and ensuring adherence to the mandates set forth by consumer protection laws.

Furthermore, the investigation’s outcomes concerning Ola’s warranty practices remain uncertain regarding their impact on eligibility for government subsidies under the FAME-II scheme, which enforces a mandatory warranty period on electric two-wheelers.