FirstCry ordered to pay Rs 50,000 compensation for cancelling order, labelling user 'fraud'

NEW DELHI: A District Consumer Disputes Redressal Commission has directed online baby products retailer FirstCry to pay Rs 50,000 as compensation along with a refund of Rs 2,130 with interest to a consumer after finding that the company cancelled his order without reason, withheld his money, and internally labelled him as a fraud user. The complainant Shaik Altaf placed an order on FirstCry on December 1, 2024 for a children's tricycle and paid Rs 2,130.06 through PhonePe. The very next day, the order was cancelled without any explanation, and the amount was not refunded. When he contacted the customer care, he was told that the amount had been adjusted against a previous order made in 2023 in which, according to FirstCry, he had allegedly returned wrong products to obtain a refund while retaining the original items. Altaf denied this allegation, pointing out that the earlier return had been duly accepted after pickup and warehouse quality verification as per FirstCry's own policy and that no email, call or written communication had ever been sent to him raising any such allegation. FirstCry had internally flagged his order as a "fraud user order cancel." Branding him as a fraudster in its system without conducting any inquiry or giving him any opportunity to respond.

What did the court's findings say? The commission found FirstCry's defence contradictory. FirstCry had itself admitted before the National Consumer Helpline that refunds for the 2023 transaction had already been processed but then turned around and alleged fraud to justify withholding the new payment. "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 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," it further noted.

The consumer commission also noted that FirstCry's own representative had called Altaf three times after the complaint was filed and offered him a settlement of Rs 2,190 as refund plus Rs 15,000 as compensation. The commission took this as a sign that the company knew it was in the wrong, even though it was not a direct admission. FirstCry's defence that the order was placed by a different person — one Sameer Basha Bamri — was rejected outright, as the complainant had produced payment proof and order details establishing his connection to the transaction. The document filed by FirstCry in support of this defence was found to be illegible and unreliable.

The commission directed FirstCry to pay Rs 2,130 with interest at 9 per cent per annum from December 1, 2024 until realization with Rs 50,000 as compensation for mental agony, and Rs 5,000 as litigation costs. All within 45 days. It also directed the company to "curb such unfair trade practices" in future.