Byju’s is facing a range of complaints on social media platforms and consumer websites from customers who say they were exploited and deceived
Rakesh Kumar was playing with his daughter at a park in northern India one evening in September when two smartly dressed salesmen approached the carpenter and father-of-three.
The men said they worked for Byju’s, an Indian education technology company that offers online classes, and pitched a 36,000-rupee ($435) tuition course for Kumar’s 11-year-old daughter, saying it would be her golden ticket to success.
Initially intrigued, Kumar allowed the men into his home, where they quizzed his child for two hours, and said she was academically “weak”, and pressured him into buy the course.
At first, he refused as the cost seemed unaffordable with his monthly salary of about 20,000 rupees working at a woodshop.
“But then they said things like ‘Your daughter will end up poor like you’ and ‘You should be ashamed for trying to stop her from succeeding in life’,” the 41-year-old said at his workplace in the city of Faridabad, located on the outskirts of Delhi.
“I finally caved and … made the worst decision of my life,” Kumar told Context.
“We are in a financial mess,” he said, adding that he had borrowed money from his brother-in-law in October and was not sure when or how he would be able to pay him back.
Kumar’s experience with Bjyu’s is not unique – scores of Indian consumers have been airing similar grievances online.
Byju’s, the most valuable startup in India and a household name, is facing a range of complaints on social media platforms and consumer websites from customers who say they were exploited and deceived, putting their savings and futures in jeopardy.
Twenty-two Byju’s customers, several from low-income homes, told Context how they had been aggressively targeted by salespeople, with some coerced into paying for courses, tricked into taking out loans and ultimately left out of pocket.
Most were parents who said Byju’s staff took advantage of a desire to provide the best education for their children, and encroached on their privacy by ambushing them in public, pressuring them at home, or secretly collecting their data.
Complaints to Byju’s and requests for refunds were generally ignored – leaving customers with little recourse, they said.
Context also interviewed 26 Byju’s workers – 18 current and eight former – who described exploitative work conditions in which they are routinely mistreated by managers, and actively encouraged to profile and deceive clients to meet strict sales targets.
In response to a list of emailed questions from Context, Byju’s denied any wrongdoing, saying that its operations were “centred around customer respect and satisfaction”.
“We have never encouraged, ordered or incentivised our sales persons and managers to pursue customers who are either uninterested in or unable to pay for our products. We uphold the highest ethical standards in our sales,” a spokesperson said.
Regarding the criticism from workers, the spokesperson said that those who spoke to Context represented an “infinitesimal percentage” of its nearly 50,000 staff, and that the workplace was the “healthiest and most welcoming” in corporate India.
In Kumar’s case, one of the Bjyu’s salesmen told him he could get a refund of his 7,000-rupee down payment within the 15-day trial period.
The other salesman took his phone and identity cards to sign him up for a loan without his consent – which he only realised later when he started receiving reminder text messages from a third-party finance firm about an upcoming monthly installment.
Kumar said he thought he was only signing up for Byju’s course, not a loan.
“The next day I changed my mind,” he said.
“I knew I didn’t have that kind of money. I’m just a labourer, with four people to feed at home … I called the (salesmen) to get my refund. But they disappeared.”
Since early October, 4,000 rupees have been deducted from Kumar’s bank account in monthly payments to Byju’s. He has visited a Byju’s centre a dozen times to try to cancel his course, but said he is still being charged despite being told by various employees that the cancellation process was underway.
Kumar said his brother-in-law has filed a police complaint against Byju’s but that no action had been taken so far.
“It is just loss after loss with no help in sight,” he said.
Byju’s did not reply to requests for comment on his case.
Staff at Byju’s, consumer rights experts, industry watchers and digital rights campaigners say Kumar’s experience highlights an unscrupulous business model that preys on vulnerable people.
Those targeted are often from poor backgrounds, have little education, and are not tech-savvy – with experts warning they are less likely to understand the possible fallouts of Byju’s offerings, or know their rights or avenues of redress.
Amid increasing criticism of Bjyu’s and its peers, calls have been growing not only for proper government regulation of the sector – which does not function under any specific law or policy – but also for investors to perform more due diligence.
Ashok R. Patil, head of consumer law and practice at the Consumer Affairs Ministry, told Context it had been examining complaints against edtech firms, while the education minister has said a policy to regulate the sector is underway.
The Education Ministry has advised consumers to be cautious about claims made and services offered by edtech companies – such as being “lured” into opting for auto-debit payments on some courses – and warned the firms to act in a transparent way.
Byju’s told Context it strongly refuted customers’ complaints of mis-selling and false advertising, among other criticisms.
Its spokesperson said every sale made was verified by an internal audit team, and pointed to a recent audit carried out by global consultancy Bain & Company – at the behest of an investor – which found that Byju’s did not mis-sell “at all”.
Byju’s has more than 7.5 million paid customers, the representative said, adding that of more than 150,000 products sold each month, they only got about 1,500 demands for a refund, which are given without question if within the trial period.
For Bengaluru-based Byju’s – which was founded in 2011 and launched its now-ubiquitous learning app in 2015 – the COVID-19 pandemic proved a boon as schools shut and students turned to online learning, spurring it to go on a buyout spree of smaller companies and attract major investments from around the world.
But its success began to wane as children went back to their classrooms and the global economic outlook turned gloomy.
Last valued at $22 billion, Byju’s reported a loss of 45.64 billion rupees ($550.5 million) in September for the 2021 fiscal year, and revenue fell 3%.
As Bjyu’s deals with losses, it is also increasingly facing criticism from parents and students.
Many clients recounted how they had called Byju’s customer support to cancel their subscription during the trial period, only to later find their requests had never been registered and that the refund eligibility period had ultimately lapsed.
ConsumerComplaints.in, an independent website, has 3,759 complaints raised against Byju’s – with 1,397 resolved and 2,362 unresolved cases. These grievances include cancellation delays, issues with obtaining refunds, and aggressive marketing tactics.
By comparison, the website shows fewer than 350 complaints apiece against other major edtech firms including Simplilearn, Vedantu, Unacademy, and the now-bankrupt Lido Learning.
Customers such as Kumar – who have no knowledge of or access to social media platforms and complaint-resolution sites where they can air their grievances – are left with nowhere to turn.
Shaba Sheikh said she has lost more than 30,000 rupees since enrolling her son for Lido Learning’s classes last December in a year-long payment plan.
“I have never felt so stressed,” Sheikh said over the phone from Mumbai.
Even though the startup folded earlier this year due to a major cash crunch, about 2,100 rupees are auto-debited from her bank account every month, Sheikh said, adding that she had no way to stop it until the last installment was taken this month.
Sheikh said she had appealed to her bank to stop the monthly deductions, but was told that only the company could do so.
“We stopped eating meat to curb our expenses,” said the mother-of-three, whose husband makes about 20,000 rupees a month driving a taxi. “We are barely getting by.”
Lawmakers, digital rights activists and academics have demanded greater scrutiny and oversight of the edtech sector, which functions under a host of legislation and regulations such as the IT law and national e-commerce standards.
These advocates and critics say the absence of a specific edtech policy allows firms to effectively operate with impunity.
“(Edtechs) have been preying on people with very predatory practices … exploiting the psyche of Indian parents and the lacunae in our education system,” said lawmaker Karti Chidambaram, who has raised the issue in parliament.
“They have done completely buccaneering business here,” Chidambaram said, adding that there has not been “any kind of governmental intervention” to date.
However, in January, India’s Education Minister Dharmendra Pradhan said he was concerned about edtech companies exploiting students through loan-based courses, and that he was in talks with the IT and law ministries about a common policy to regulate the sector.
Soon after, all of the country’s leading edtech firms formed a self-regulatory body – the India Edtech Consortium (IEC).
The body allows consumers to file grievances on its website, and details its code of conduct that includes ethical sales practices, and transparent and clear communication of policies around loans, financing and refunds.
The IEC did not respond to repeated requests for comment about the number and nature of complaints received and resolved.
In July, the Consumer Affairs Ministry warned the IEC against unfair trade practices, including misleading advertisements and fake reviews.
For now, social media appears the best – or only – bet for disgruntled consumers desperate to get their money back.
Ranjana Sharma, who said she was “defrauded” by Byju’s and owed a refund of more than 60,000 rupees, said the firm got in touch after she complained on Twitter and returned her money.
“They mentally harassed me,” she said by phone from the northern city of Amritsar. “Not only did they humiliate and shame us, they surreptitiously put me on a loan scheme, and registered two fake students under my number.
“I went to the police, wrote to the government, the central bank … I did everything, but finally went on Twitter,” Sharma added. “That was the only thing that helped.”
Byju’s did not respond to requests for comment on her case.
‘We know almost everything’
Consumers and digital rights campaigners have also raised concerns about data privacy and the prospect of edtech companies’ apps profiling children for commercial purposes – such as through highly targeted content and advertisements.
When Moushumi Das answered a call from a Byju’s salesman in August, she was shocked by how much he already knew about her son – including his name, his grade and the school he attended.
“I felt scared. I felt like he had been stalked. So I kept asking how this (Byju’s) guy knew all this … but he hung up,” she said by phone from the eastern city of Kolkata.
A Human Rights Watch (HRW) report published in May found that many government-endorsed edtech apps, including in India, put children’s privacy at risk by harnessing their data. Byju’s was not one of the apps examined by the organisation.
Many parents, including Sheikh and Sharma, said companies such as Byju’s often partnered with local schools to offer tutoring services, making students fill out forms with all sorts of details – including mobile numbers, emails and addresses – which were then used by them to make marketing calls.
Several Byju’s employees told Context the company had access to information such as the kind of phone model being used, a child’s name, age and grade, among other things, to target potential leads and fine-tune pitches.
“We know almost everything before we call you,” a Byju’s salesman said, on condition of anonymity to protect his job.
In response, the Byju’s spokesperson told Context the company “does not track or store any data for which it does not explicitly seek permission from its users”.
Tech policy experts including Nivedita Krishna of the Bengaluru-based Wadhwani Foundation said that in the absence of a data protection law in India, there are few safeguards and no recourse if citizens’ digital rights are violated.
“We very quickly need a data protection or data privacy law that provides enough and more comfort to the average citizen of India, and when we do that, indirectly, we will also address children’s safety online,” said Krishna.
For Kumar, he said his sole focus is now to make ends meet.
He has closed his bank account to stop any more deductions by Byju’s, and taken on freelance carpentry work in nearby apartments on top of his regular job to recover his losses.
“I will do whatever I can for my children. I want them to study, get (degrees), work in proper air-conditioned offices,” said Kumar, who dropped out of school when he was 11.
“I do not want them to end up like me, because that would be my biggest failure.”