A District Consumer Commission directed FirstCry to compensate a customer after finding that it arbitrarily cancelled an order, withheld payment, and labelled the customer a “fraud user” without inquiry or due process. The Commission ordered refund with interest and compensation for mental distress.
Protecting consumer rights, a District Consumer Disputes Redressal Commission directed online baby products retailer FirstCry to compensate a customer after finding that the company had arbitrarily cancelled his order, withheld his payment and internally categorised him as a “fraud user” without any inquiry or due process. The Commission ordered the company to refund the amount paid by the customer along with interest and pay compensation for the mental distress caused by its actions.
Background of the Dispute
The case was initiated by complainant Shaik Altaf, who had placed an online order for a children’s tricycle through FirstCry on December 1, 2024. The product was purchased for Rs 2,130.06, and the payment was successfully made through PhonePe.
However, to Altaf’s surprise, the order was cancelled the very next day without any explanation. Despite the cancellation, the amount paid by him was not refunded. Seeking clarification, Altaf approached FirstCry’s customer support team regarding the status of his refund.
According to the company’s response, the amount had been adjusted against a previous transaction dating back to 2023. FirstCry alleged that in the earlier transaction, Altaf had returned incorrect products and had wrongfully obtained a refund while retaining the original goods.
Submissions of Parties
Altaf strongly disputed these allegations before the Commission. He maintained that the return process in the earlier transaction had been completed strictly in accordance with FirstCry’s policies. The returned items were collected by the company, verified at its warehouse and accepted after quality checks were conducted.
He further argued that at no point had the company informed him of any discrepancy regarding the earlier return. According to him, he never received any email, phone call, notice or communication suggesting that the products returned were incorrect or that any fraud had been committed.
The complainant contended that the company’s sudden reliance on an old transaction to deny refund for a completely separate order was arbitrary, unjustified and contrary to fair business practices.
Observations of the Commissions
During the proceedings, the Commission examined internal records produced by the company and found that the transaction had been marked as a “fraud user order cancel.”
The Commission noted that this effectively amounted to branding the complainant as a fraudster without conducting any investigation, issuing any notice or providing him an opportunity to respond to the allegations. Such action, the Commission observed, raised serious concerns regarding fairness and procedural propriety in dealing with customers.
The Commission found significant inconsistencies in the company’s defence. It noted that FirstCry had previously acknowledged before the National Consumer Helpline that refunds relating to the 2023 transaction had already been processed. However, during the consumer proceedings, the company relied upon alleged fraud in the same transaction to justify withholding the refund for the 2024 order.
Highlighting this contradiction, the Commission observed:
“Once refunds were issued after verification, it is not open to the opposite party to later allege that the returned products were incorrect and deny refund in a subsequent transaction. This contradictory stand is arbitrary.”
The Commission concluded that the company could not retrospectively raise allegations regarding a transaction that had already been processed and closed.
After examining the facts and evidence, the Commission held that the company’s conduct amounted to deficiency in service as well as an unfair trade practice under consumer protection law.
The Commission observed:
“The conduct of the opposite party in cancelling the order, withholding the refund, taking inconsistent stands, and marking the order as ‘Fraud Order’ without due process amounts to deficiency in service and unfair trade practice. Such action also affects the dignity and reputation of the complainant, causing mental agony.”
The Commission emphasised that businesses dealing with consumers must follow fair procedures and cannot make adverse findings against customers without proper verification and communication.
The Commission also took note of developments that occurred after the consumer complaint was filed. According to the record, FirstCry’s representative contacted Altaf on three separate occasions and proposed a settlement. The company reportedly offered a refund of Rs 2,190 along with compensation of Rs 15,000.
While the Commission clarified that the settlement proposal could not be treated as a direct admission of guilt, it observed that such an offer indicated that the company itself was conscious of the weaknesses in its position.
FirstCry also attempted to defend its actions by claiming that the order had actually been placed by another individual identified as Sameer Basha Bamri and not by the complainant.
The Commission, however, rejected this contention after scrutinising the payment records and order-related documents submitted by Altaf. It further noted that the document produced by the company in support of its claim was illegible and lacked evidentiary value. Consequently, the Commission found no merit in the company’s argument.
Relief Granted to the Consumer
Allowing the complaint, the Consumer Commission directed FirstCry to refund Rs 2,130.06 along with interest at the rate of 9 percent per annum from December 1, 2024 until the date of actual payment. In addition, the company was ordered to pay Rs 50,000 as compensation for the mental agony, inconvenience and reputational harm suffered by the complainant.
The Commission also awarded Rs 5,000 towards litigation expenses. All payments are required to be made within 45 days from the date of the order.
Apart from granting monetary relief, the Commission directed FirstCry to take corrective measures and ensure that similar incidents do not recur in future.
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