Buyers beware, you're in Indonesia

Buyers beware, you're in Indonesia

Although Indonesia finally passed the long-awaited Consumer
Protection Law in 1999, consumers' rights remain largely
neglected. While the law is still toothless, the public's
awareness of their rights as consumers has not improved either.
The Jakarta Post contributors Prapti Widinugraheni, I.
Christianto, Tri Hafiningsih and reporter Ida Indawati Khouw look
into the issue.

JAKARTA (JP): Inferior or dangerous goods and bad service
thrive here because of lousy law enforcement and little promotion
of consumers' rights. The state's failure means consumer
protection comes from companies' quality-control processes and
public-relations policies. If a company is not morally
responsible or commercially motivated to protect its reputation
or its brands, consumers suffer.

Agus Pambagyo, deputy chairman of the Indonesian Consumers
Foundation (YLKI), says that since the 1997 economic crisis,
public awareness of consumers' protection has dropped as low as
in the 1970s.

"People don't think about whether a product is good or bad in
terms of quality. They just buy something if they can afford it.
They don't think about guarantees, spare parts or after sales
service," he says.

Electronic goods, for instance, should come with warranties,
but not many consumers want to go to the trouble of ensuring that
they do, as long as they are inexpensive.

Agus blames the situation on ignorance. "People just don't
care, except when there are problems. We can, and actually should
be, well-informed about the products or services we purchase," he
says.

Another issue is poor law enforcement and the lack of legal
awareness, not only on the part of the consumer, but also law
enforcers. "When we filed a particular case at the Central
Jakarta District Court, the judges didn't know what a class
action was. We (YLKI) had to educate them," he says.

"We file court cases based on the Consumer Protection Law
(CPL). If we never use it, it'll end up like other laws, such as
the traffic law, or the law on broadcasting ... We want to
encourage the authorities to issue necessary rules and
regulations based on the CPL," he says.

Despite all this, there is an encouraging trend, he insists.
"Judging from the increasing number of consumers' complaints
filed through YLKI, I would say they may have better awareness
now than before."

And there is no shortage of tales from unsatisfied customers.

In early 1997, Tatang Setianto and his wife Helly decided to
buy two houses in Bumi Indah, a housing complex in Tangerang,
about 40 km west of Jakarta. After paying a Rp 20 million down
payment, they were to pay the balance in installments with loans
from Bank Harapan Sentosa, which is now defunct. The houses had
not yet been built.

"At the time, we were promised that we could occupy the
houses by July 1998, but several months before that date, the
creditor bank was liquidated. We banded together with several
other customers who wanted to cancel the transaction and ask for
their money back, but the developer wouldn't comply. A
representative of the company even convinced us that construction
would resume as soon as the money was available," he says.

Sure enough, the developer built about 200 houses, located in
four of the eight sectors planned for the complex. But facilities
were poor: the roads were damaged and building materials were
low-grade, according to Tatang.

"All I can do now is wait for the project to be completed. I
once thought of taking legal action but I doubt it would help
much because it would be too time-consuming and costly," he says.

Then there are state-owned companies, with perhaps the most
frequent target of criticism being telecommunications provider PT
Telkom. Not surprisingly, the company's "meet-the-customer"
session last Thursday at the Bentara Budaya building in Central
Jakarta drew an enthusiastic audience. About 300 people attended
the event that was held by Telkom's Jakarta branch office.

One customer from the audience, Tuti, chided Telkom for
continuously billing her even though none of her three phone
numbers worked after her shop-house in Villa Tanah Mas complex in
East Jakarta was damaged during the May 1998 riots.

"Now I've been told I have to pay an accumulated amount of Rp
359,000 in phone bills. I reported the case to PT Telkom last
December, but there has been no concrete action so far," she
says.

Another customer, Jalaludin from Kalideres in West Jakarta,
says his telephone line goes dead every time it rains.

Checkout counters at supermarkets are another place where
customers need to be wary. They should double-check that the
amount charged for items is the same as the price displayed.
Fitri W. Rinasari from South Jakarta says she often sees people
paying more than the price displayed on shelves or in advertising
flyers.

"I had an experience like that last year when I bought cheese
at Carrefour in Cempaka Putih (East Jakarta). The brochure said
the price was Rp 8,700, but I had to pay Rp 9,100," she says. She
reported the case to YLKI.

Registering complaints with YLKI is a good way to let off
steam, but may not necessarily result in customer satisfaction.
According to Diah Indriantari, a lawyer with YLKI, the agency
last year received 1,301 complaints filed through its hotline
service and 892 through letters.

Agus Pambagyo admits that it is difficult and complicated for
consumers to file their cases in court and while YLKI can assist
in negotiations, applying public pressure and helping out with
legal action, it can not act as a law firm.

No law firm

For example, in the case of consumers who are against
electricity rate increases, YLKI is able to assist in
negotiations with the authorities. If that fails, YLKI can
influence the public to apply pressure on the offending company,
such as by encouraging people to boycott the product. But how
many people would be prepared to stop using electricity?

"Not many consumers want, or can, do this. If this also fails,
we take it a step further and go to court. But we seldom go this
far. Most consumers are reluctant to go along with court rules.
They have to attend every court hearing. Yes, it takes money and
is time-consuming. But these are the right steps," he says.

In most cases, customers want YLKI to go all the way to court,
but many would claim they cannot afford it.

"YLKI is not a law firm. If they (consumers) want to go to
court, we can facilitate that. But we can't go alone. They have
to be there with us. When it comes to this, most of them give up.
The better-educated consumers would say they don't want to waste
their time, while the less educated ones are reluctant because
they are too afraid. Their rights have been repressed for so
long. They've lost all the initiative, creativity, ability and
knowledge as consumers. They don't know they have rights," Agus
says.

Which is why YLKI puts emphasis on educating people about
consumer protection through seminars, lectures and discussions
with various consumer groups such as students, youths and women.
Public service ads placed on television, radio and in print
media, he says, are also effective but are very expensive: "We
don't have the budget for that. Anyway that's not our job. That's
the government's job."

He points out that the Consumer Protection Law promotes the
formation of grassroots Consumer Protection Agencies (Lembaga
Perlindungan Konsumen Swadaya Masyarakat/LPKS).

"It's good for public control. But it also has excesses. Many
such agencies have had to blackmail retailers and business
associations because they don't have enough financial support to
survive. They have had to sacrifice their independence. As an NGO
we have to be independent. We can't have anything to do with
traders or any business organizations," he says.

Complaints in media

In the end, unsatisfied customers who are aware of their
rights yet understand the lack of law enforcement in the country
opt for a well-known and highly-proven method to get the
attention of retailers or service providers: they write their
complaints in the media. And who can blame them since in most
cases, it is easier for customers to get hold of the contact
numbers of newspapers and magazines than that of goods and
service providers.

Anton Situmeang from PT Unilever's media relations division
admits this. But he adds that Unilever, which produces household
items like soap and toothpaste, has plans to add a customer
hotline number on the packages of its products. Still, he does
not know when it will happen: "We are going in that direction,
but everything needs preparation."

At the moment, the company handles complaints through its
distribution network, which he claims is well-established
throughout Indonesia.

"People from our representative offices meet directly with the
customers and will then establish whether a product is faulty
from our factory or whether it has been tampered with -- this
includes determining that a product is indeed ours and not an
imitation. If the product is defective from the factory, then we
will replace it. This is common practice," he says.

Some companies, mostly multinational service retailers, can
handle complaints through a customer relations department of some
sort and give customers the appropriate response.

Ditta Amahorseya, a public relations officer at Citibank, says
the bank tries to resolve each complaint on the day it is lodged.
If more time is needed, it is passed on to the division concerned
or a special "Total Quality" division that regularly monitors
customer satisfaction and reports to the bank's Asia Pacific
headquarters.

"It is not true that consumer complaints are only dealt with
after they are written in the media," she insists.

Riko Abdurrahman, also from Citibank, claims that the fine
print on banking products -- such as the writing on credit card
application forms which state the legal implications of owning
the product and the customer's rights and obligations -- was not
intended to dupe would-be customers or take advantage of their
lack of knowledge.

"It is only a matter of available space. In the case of
Citibank's credit cards ... customers whose applications have
been approved will receive the credit card and a directory book
explaining in detail about ownership benefits and obligations,"
he says.

State-owned Merpati Nusantara Airlines is more aware of the
bad image with which fine print is related. Merpati's general
manager of corporate affairs, Imam Turidy, says: "We reprinted
the terms and conditions usually found on tickets into a far
clearer format as only a few passengers previously read it
because the print was too small. We now offer and promote
everything carefully as we have to make sure that we can really
deliver."

Since the introduction of the Consumer Protection Law in 1999,
Merpati has held programs to familiarize the staff with it. But
he insists that customers must do their part as well.

"For example, passengers who arrive late at check-in counters
should understand that their baggage might not arrive at the same
time as them. Late passengers can still get on board, but not
their baggage because of different handling (by another
company)," he says, adding that most passengers do not care about
this and would be quick to blame the airline when their baggage
is late, or considered lost.