Monday, 14 March 2011

World Consumer Rights Day: Thousands fall victim to fly-by-night firms

Syed Akbar
Hyderabad, March 14: As consumer rights activists the world over focus on "our money our rights" this World Consumer Rights Day on Monday, thousands of gullible people in Andhra Pradesh continue to fall victim to fly-by-night financial firms and chit fund companies.

According to official estimates, consumers have lost as much as Rs 10,000 crore in the last five years. Most of the victims belong to poor and middle class families and they had saved money to meet the marriage or educational expenses of their children.

On an average, two financial firms wind up business in the State. Incidentally, those who top the list of wanted by the CID are involved in financial irregularities including fraud.

With financial crimes going up in many parts of the world, this year's world consumer rights day has been dedicated to safeguarding the hard earned money of people, besides creating an awareness on safe banking and financial transactions.

Consumer bodies will focus on the "banking" rights of people as a large chunk of population in the country do not have access to formal banking. Because of lack of access to formal banking, many gullible consumers fall prey to the lure of high interest rates offered by so-called blade companies.

"In India only 48 per cent of people have access to the formal
banking sector. Despite this rural households had total cash flows
equal to 10 to 30 times their end-of-year asset values," says consumer rights activist M Venkatasubbaiah.

Consumer rights activists are concentrating on rural areas as the formal financial services sector is under-developed in the country.
As many as 18.5 crore potentially bankable villagers do not have bank accounts. Only 20 per cent of people living in villages have access to formal banking.

According to Asian Development Bank studies, about 80 per cent of people in rural areas do not have insurance while 73 per cent of 89 million farmer households do not have access to formal sources of credit.

"Unless we succeed in providing access to all people to formal banking and credit systems, fraudsters will continue to play havoc with the lives of gullible investors. No amount of legislation will help. People should be educated on safe banking," argues consumer advocate S Ramgopal.

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