New Delhi: Stuck in endless loops with chatbots and automated grievance-redressal systems while trying to get a consumer complaint resolved? There may be help on way with the government looking to crack the whip.
The fixed options offered in the new customercare delivery are making it tough for consumers to explain their problem, while getting through to a human executive is difficult, or simply not an option. This frustrating experience is now commonplace across e-commerce platforms, banks, airlines, consumer durable companies and various service providers.
The department of consumer affairs is examining how companies are deploying such systems as the first layer of customer support, concerned that instead of being a solution-oriented tool, artificial intelligence (AI) has become a roadblock to effective grievance redressal, said two government officials in the know.
In light of these problems, government plans to direct companies to improve their customer grievance-handling mechanisms within a stipulated timeframe, failing which penalties will be imposed, said the first official cited above, who did not wish to be identified.
India's laws already have provisions to protect consumer rights in this respect. Under the Consumer Protection Act, 2019, the failure to provide an adequate service may fall within the ambit of “deficiency” under section 2(11), while section 39 empowers consumer commissions to direct companies to remove deficiencies, provide refund or compensation and discontinue the unfair trade practices, the officials said.
For e-commerce entities, the Consumer Protection (E-Commerce) Rules, 2020 require the appointment of a grievance officer and prescribe timelines for acknowledging and redressing consumer complaints. Failure to comply with a direction issued by the Central Consumer Protection Authority (CCPA) under the law can attract imprisonment of up to six months, a fine of up to ₹20 lakh, or both under Section 88, they added.
Under the Consumer Protection Act, businesses are the first point of contact for consumers, and not the consumer commission. Therefore, the rules specifically require entities to have a seamless grievance-redressal mechanism, with customer-care numbers displayed prominently and an easy mechanism for registering complaints. To flag their untended complaints to companies, consumers can flag their issues on National Consumer Helpline and Centralised Public Grievance Redress and Monitoring System.
“In the name of AI adoption, companies have created multiple layers of bots that are acting as barriers to effective grievance redressal, ultimately forcing consumers to turn to other consumer grievance portals,” said the second official.
“This amounts to a misuse of AI. AI should be deployed in a way that creates a win-win situation for both consumers and businesses, by making grievance redressal faster, simpler and more effective, rather than making it more difficult for consumers to access the system,” the official added.
The officials maintained that the consumer affairs department supported AI use, but the technology should be deployed such that consumers get their complaints resolved easily, and not make the process complicated and frustrating.
India is witnessing a wide range of complaints involving products purchased through e-commerce portals, different marketplace providers, company websites and directly from offline stores. Consumers have raised concerns that they are required to call customer-care numbers that are increasingly connected to AI-based agents operating through a predefined set of questions. In many cases, there is no option to directly connect with a human executive, and in many other cases consumers are kept on hold for so long that they eventually abandon the conversation without their grievance being addressed.
The officials declined to detail the consumer complaint numbers, and said the matter was under review. They also did not disclose the specific companies or platforms against which the number of complaints were the highest.
Data from the National Consumer Helpline shows that between 25 April 2025 and 31 January 2026, e-commerce accounted for 47,743 refund-related grievances, the highest among 31 sectors. These complaints resulted in refunds worth ₹36.79 crore. Overall, the helpline facilitated ₹52 crore in refunds across 79,521 refund-related grievances during the nine-month period.
Expert view
Experts agree that the problem is not with AI per se, but in the way companies are deploying it. AI has become relatively easy for companies to deploy, and it brings potential cost savings that includes headcount reduction. On the customer side, however, there are multiple issues since the technology is not properly integrated across the issue creation, solutions, feedback, analytics and closure.
“The issue arises when the technology becomes a barrier to the consumer’s access to an effective grievance-redressal mechanism," said Vijay Kumar, partner at Fox Mandal, a law firm. "Under the consumer protection framework, e-commerce entities are required to have a grievance officer and provide a mechanism for consumers to register and track their complaints. If a chatbot repeatedly confines a consumer to predefined options and does not provide an effective route for an unresolved complaint to be addressed, it could raise questions about whether the company is fulfilling its obligation to provide effective grievance redressal. The use of technology cannot dilute consumer rights.”
“AI voice agents need to be trained to understand the Indian dialect and vernacular; status and progress tracking has to be accurate and customers’ issues should not be closed without their affirmation. Companies need to adopt a hybrid approach where the AI and manual system need to work in tandem,” Pankaj Dikshit, executive director and chief AI and data officer at Cygnet.One, listing out the customercare asks.
Human intervention becomes crucial at some point. “This stage must include a handover to a human after a fixed set of iteration fails to get the customer’s confirmation on the interaction," Dikshit added. "This would enable AI bots to learn and the manual systems can be weaned off gradually. This would be a win-win and yield a higher satisfaction as well as customer retention rate.”
Queries emailed to the spokespersons of the department of consumer affairs and online platforms Amazon, Flipkart, Reliance Retail, Swiggy, Zomato, and MakeMyTrip remained unanswered until press time.
Responding to Mint's queries, fast moving consumer goods major Hindustan Unilever Ltd's spokesperson said, “Consumers can reach us for queries through multiple channels, including our toll-free helpline, email address, postal address, and WhatsApp. We remain committed to ensuring consumers can easily access support and have their concerns addressed in a timely manner.”