CONSUMER PROTECTION

UNIVERSITY OF THE COMMONWEALTH CARIBBEAN

N. BARNES
IMPORTANCE OF CONSUMER PROTECTION

 Importance of consumer protection is to safeguard the consumer from

exploitation.
 In the absence of consumer protection, consumers were exploited in many
ways, for example sale of unsafe products, adulteration and hoarding of
goods, using wrong weights and measures, charging excessive prices and
sale of inferior quality goods, etc.
 Through various Consumer Protection Acts; business organizations are
under pressure to keep away from exploiting consumers.
CONSUMER AFFAIRS COMMISSON

 The Consumer Affairs Commission (CAC), an agency of the Government of

Jamaica, is dedicated to protecting the interests of consumers. A task that
it accomplishes through:

• Consumer education programmes

• A complaints resolution service
• Corporate services and affiliations
IMPORTANCE, NEEDS OF CONSUMER PROTECTION

Protection
Consumer Redressal of Bulletins and
from
Education Complaints Periodicals
Exploitation

Encouraging
Connecting Quality life for
Honest Unity
Link Consumers
Businessmen

To discourage
Getting public To awaken the
antisocial
support government
activities
CONSUMER AFFIARS COMMISSION

 The CAC is dedicated to leading change in society towards a population of

knowledgeable, vigilant, assertive and discriminating consumers.
 The CAC’s mission is aimed at enlightening the Jamaican consumer through
education so that he/she can cope in a changing global environment.
 Consumer education and outreach is fundamental to the CAC's strategy. In this
regard, the Commission disseminates information on consumer issues to the
public, policymakers and other public interest advocates about itself, its services
and other pressing issues via the print and electronic media and through new
and emerging technologies.
 The CAC in its outreach programmes tries to participate in all forms of activities
and events, namely expositions, group presentations, workshops and seminars. It
endeavours to reach individuals at all levels and age groups, and to this end
has an active school programme.
 The Agency also continues to provide complaints resolution services to its clients
through a complaints bureau, with the focus on difficulties being experienced
such as refusal or delays in repairing or replacing defective goods and breach
of contract.
CONSUMER PROTECTION ACT, 2005

 An Act to provide for the promotion and protection of consumer

interest, in relation to the supply of goods and the provision of
services in order to ensure protection of life, health and safety of
consumers and others, the establishment of a Consumer Affairs
Commission and for connected purposes.
FRAMEWORK FOR CONSUMER PROTECTION

The following is a shortlist of the laws and institutions which fit squarely under the
heading of Consumer Protection.

A. PHYSICAL SAFETY
 The Food and Drugs Act
 The Food Storage and Prevention of Infestation Act
 The Standards Act
 The Public Health Act
 The Processed Food Act
B. PROMOTION AND PROTECTION OF CONSUMERS' ECONOMIC INTERESTS
 The Sale of Goods Act
 The Hire Purchase Act
 The Trade Act
 The Fair Trading Act
FRAMEWORK FOR CONSUMER PROTECTION

C. STANDARDS FOR SAFETY AND QUALITY OF CONSUMER GOODS AND SERVICES

 The Weights and Measures Act
 The Standards Act
 The Processed Food Act
D. DISTRIBUTION FACILITIES FOR ESSENTIAL GOODS AND SERVICES
 The Trade Act
E. MEASURES ENABLING CONSUMERS TO OBTAIN REDRESS
 The Ombudsman Act
 The Trade Act
 The Hire Purchase Act
 The Standards Act
 The Rent Restriction Act
 The Fair Trading Act
FRAMEWORK FOR CONSUMER PROTECTION
E. MEASURES ENABLING CONSUMERS TO OBTAIN REDRESS
 The Ombudsman Act
 The Trade Act
 The Hire Purchase Act
 The Standards Act
 The Rent Restriction Act
 The Fair Trading Act
F. MEASURES RELATING TO SPECIFIC AREAS
 The Pharmacy Act
 The Underground Water Control Act
 The National Water Commission Act
 The Parishes Water Supply Act
 The Natural Resources Conservation Act
G. INSTITUTIONS WHICH OFFER CONSUMER EDUCATION AND INFORMATION
 The Consumer Affairs Commission
 The National Consumers' League
 The Fair Trading Commission
 Individual Ministries, Statutory Bodies and Government Depts
CONSUMER PROTECTION (AMENDMENT) ACT, 2012

 The legislature has clarified certain provisions of the CPA, increased or instituted
higher fines, included additional remedies for consumers and established a
Consumer Protection Tribunal.
 Interestingly enough, for an Act dealing with consumer rights, the CPA
previously defined "goods", but it did not specifically define "services". A fairly
expansive definition of "services" has now been inserted: "the supply to a
consumer of anything for a consideration which is not a supply of goods, other
than the rendering of any service under a contract of personal services or
employment services.
 The definition of a "provider" has also been amended to state that a person will
be considered to be a "provider" whether or not they supply the relevant goods
or services on a regular basis or as a single transaction. The effect of this
amendment is that if you enter into a one off sale, for example of your motor
vehicle or even some household items in a yard sale, you will be subject to the
provisions of
the CPA.
CONSUMER PROTECTION (AMENDMENT) ACT, 2012

 An example of the addition of more "bite" to the CPA is seen in the

amendments to section 21, which deals with warranties. This section
stipulated among other things, that providers must issue explicit warranties
in relation to goods or services and that warranties given by manufacturers
(whether local or foreign) are deemed to extend to providers in Jamaica
who are in turn liable to consumers in relation to such warranties.
 It now also stipulates that where a provider is in breach of a contract with a
consumer, the consumer may recover damages for any loss suffered as a
result of the breach that was reasonably foreseeable at the time of
contract.
 Further, where a provider fails to issue a warranty or extend a
manufacturer's warranty (whether or not the manufacturer operates within
Jamaica), the provider commits an offence. The provider will be liable on
conviction to a fine not exceeding $2 million, or to imprisonment for a term
not exceeding two years, or to both fine and imprisonment.
CONSUMER PROTECTION (AMENDMENT) ACT, 2012

 The CPA also contains provisions that deal with advertising. The CPA prohibits
people from advertising goods and services that he/she does not intend to offer
or supply.
 It also requires people to supply the goods or services at the advertised price for
a reasonable period of time having regard to the nature of the market and the
advertisement. Breach of these provisions constitutes an offence punishable by
a fine of $100,000 or imprisonment for a term not exceeding 30 days.
 The CPA also now states that every contract of sale and advertisement must be
conspicuous, legible and in simple and easily understood language. The
contract of sale or advertisement must set out the applicable terms and
conditions and the provider is required to take reasonable steps to bring such
terms and conditions to the attention
of consumers.
 More important, the CPA now specifically provides that where there is doubt as
to the meaning of a term or condition of a contract, the interpretation that is
most favourable to the consumer will prevail. As such, providers may wish to pay
more attention to the wording of their advertisements, offers and contracts as
the law is clearly on the side of the consumer.
CONSUMER PROTECTION (AMENDMENT) ACT, 2012

 The amendments have also provided for the establishment of a Consumer

Protection Tribunal (the "Tribunal"). Section 44 of the CPA states that parties
may attempt to settle disagreements through mediation by
the Consumer Affairs Commission, before taking matters to court.
 Parties may now refer any matter not settled through mediation to the
Tribunal. The Tribunal has the power to make a number of orders, including
declaring transactions to be in breach of the CPA; prohibiting the
withholding of supplies or the threat of withholding; suspending or
modifying the terms or conditions of an agreement which are manifestly
unfair to a consumer or which are in contravention of the CPA; requiring
the publication of a price list; requiring payment of refunds with interest or
the delivery of goods and services; or protecting the confidentiality of a
party's trade secrets or other confidential information.
 The Tribunal may also make an order in relation to any matter or measure it
deems appropriate or necessary for the furtherance of the objects of the
CPA.
CONSUMER PROTECTION (AMENDMENT) ACT, 2012

 Persons who fail to appear before the Tribunal when summoned or who fail
to produce any requested document without reasonable excuse, commit
an offence. Such offenders will be liable on conviction to a fine not
exceeding $500,000 or to imprisonment for a term not exceeding six
months, or to both.
 Persons who appear before the Tribunal who: (a) without reasonable
excuse, fail or refuse to answer questions; (b) give false or misleading
information; or (c) commit an act which if the Tribunal were a court would
constitute contempt of court, commit an offence and will be liable on
conviction to a fine not exceeding $2 million or to a term not exceeding
two years, or to both.
 Finally, any person who fails to comply with an order of the Tribunal will also
be guilty of an offence punishable by a fine not exceeding $2 million or to
a term not exceeding two years, or to both.
CONSUMER PROTECTION (AMENDMENT) ACT, 2012
The Consumer Protection Tribunal

Individuals with unresolved issues relating to transactions with goods and

service providers can utilise the services established by the Consumer
Protection Tribunal (CPT) to reach settlements, particularly through mediation
facilitated by the Consumer Affairs Commission (CAC).

Other CPT's provisions under the amended CPA include:

 empowering the CAC to keep proper records of all complaints and actions
taken and initiate investigations of breaches, where deemed necessary;
 levying applicable criminal sanctions; and
 sanctioning mandatory refunding of payments with applicable interest to
consumers where purchasers elect not to accept goods not delivered
within specified timelines advertised by providers.
NO REFUND POLICY IS ILLEGAL

 Merchants operate in breach of the law by forcing consumers to exchange items instead of
providing them with a refund, as is provided for under the Consumer Protection Act.

 Consumers should utilise their right of choice and go to another entity because if you purchase a
good from a store or supplier and something is wrong with it, its either, repair, replace or refund –
for faulty products.
 If there is absolutely nothing wrong with the product, the law does not factor in you changing
your mind.

 In many instances customers are only offered the option of a refund, and usually within a
specified period, but the CAC’s position on that practice is that exchange is up to the discretion
of the supplier.

 If you haven’t gone out of the store with the product, the CAC advocates that the consumer’s
money is returned. If the consumer leaves the store, that will be an issue.
 Consumers should ask questions about refunds, warranty and anything related to the product.
THE FAIR COMPETITION ACT

 The Fair Competition Act is an act to provide for the maintenance

and encouragement of competition in the conduct of trade,
business and in the supply of services in Jamaica with competitive
prices and product choice. This act also governs any purchases or
sales made, all advertisements and how a business will operate.
 Consumers have the benefit of adequate and relevant information
and are afforded meaningful choices. Accordingly, the FCA covers
economic activities in all sectors.
THE FAIR COMPETITION ACT

 Under the FCA, the Commission is empowered to obtain information as it

considers necessary to assist in its investigations. Further, any person who
give to the commission information which he/she knows to be false can be
found guilty of an offence and liable on conviction in a circuit court.
 The FCA allows for a fine of up to $5 million in the case of an enterprise and
up to $1 million in the case of an individual, where the court determines
that the FCA has been breached.
THE FAIR COMPETITION ACT

 The FCA contains two broad categories of prohibitions those dealing with
competition protection and those dealing with consumer protection.
 COMPETITION PROTECTION
 Fix Pricing – when a business or individual seeks to influence the price of
goods or services.
 Exclusive Dealing – The practice whereby a supplier seeks to induce a
customer to deal with that supplier only.
 Market Restriction – The practice whereby a supplier seeks to force a dealer
to make goods available only in specified areas rather than any area that
the dealer may choose.
THE FAIR COMPETITION ACT

 Bid Rigging – An agreement between two or more persons to distort the

bidding process for a work or commodities contract.
 Abuse dominance – some of the ways in which a dominant enterprise may
abuse its dominant position are by: Restricting the entry of any business or
person into the market, imposing unfair buying or selling prices, and
granting pereferential treatment to some business partners or clients.
CONSUMER PROTECTION

 Sale above advertised price – The practice by which a product is

advertised at a certain price and then sold at a higher price.
 Misleading advertisement – Any Advertisement erroneous representation
made to the public about the value or nature of a product and includes
guarantees and warranties.
PURPOSE OF THE FAIR TRADING
COMMISSION
 The Fair Trading Commission (FTC) was established 1993 to administer the
Fair Competition Act (FCZ), which provides for the maintenance and
encouragement of competition in the conduct of trade, business and in
the supply of services in Jamaica.
 The FCA was established to ensure that benefits of the competition process
in Jamaica are not hindered by anti-competitive activities; and its
objectives are to:
 Encourage competition in the conduct of trade and business in Jamaica
 Ensure consumers with better products and services, a wide range of
choices at competitive prices.
FUNCTIONS OF THE FTC

 Investigating the conduct of businesses regarding matters falling withing

the FCA
 Advising the minister on matters relating to the operation of the FCA
 Making available to businesses and consumers, general information
regarding their obligation under the FCA
 Undertaking studies and publish information regarding matters affecting
the interests of consumers
 Cooperating with and assist any association in developing and promoting
the observance of standards of conduct for the purpose of ensuring
compliance with the FCA
Double
Ticketing
Double ticketIng
Scenario 2
DOUBLE TICKETING
 Double ticketing is a sales strategy in which a vendor puts two price tags on
a product to lure the consumer till he/she is asked to pay the higher of the
two ticketed prices.

 Double ticketing occurs when a seller represents two or more prices on a

product or service and the consumer is not charged the lowest price.

This is an illegal tactic therefore the lowest price should be charged. This tactic
benefits retailers but not consumers.
DOUBLE TICKETING

Jamaica: The Fair Competition Act PART VII. Offences against Competition #39

“A person shall not supply any article at a price that exceeds the lowest of two
or more prices clearly expressed by him or on his behalf, in respect of the
article in the quantity in which it is so supplied at the time at which it is so
supplied—
(a) on the article, its wrapper or container;
(b) on anything attached to, inserted in or accompanying the article, its
wrapper or container or anything on which the article is mounted for display or
sale; or
(c) on a display or advertisement at the place at which the article is
purchased.”
Misleading Advertising
Scenario 1
MISLEADING ADVERTISEMENT

Under the Consumer Protection Act 2007, advertising is seen as

misleading if it involves false, misleading or deceptive information that
is likely to cause the average consumer to act in a way they might
otherwise not. Advertising may also be considered misleading if
important information that the average consumer needs to make an
informed decision is left out.
Colgate-Palmolive (India) Limited v Anchor
Health & Beauty Care Private Ltd

 Colgate-Palmolive approached the court aggrieved

by the use of the words “ONLY” and “FIRST” in the
advertisement of the Anchor Health. The objection
regarding the advertisement was the claim by Anchor
that they were the “ONLY” toothpaste containing all
the 3 ingredients, calcium, Fluoride, Triclosan.
 The Second objection was the use of the word “FIRST”
all round protection toothpaste. The applicants
contented that even their products contained all these
products.
 Colgate-Palmolive (India) Limited v Anchor Health & Beauty
Care Private Ltd

 The claims made by Anchor were contented to be

misleading.
 The court after detailed analysis of various case laws
and provisions came to the final conclusion that the
reasons behind the use of the words “ONLY” and
“FIRST” were not satisfactory.
EXAMPLES OF MISLEADING ADVERTISING

 A false claim about the characteristics of the goods or

service.
 The price or way the price is calculated is
misrepresented.
 The way the goods or service are supplied is
misrepresented.
 Any aspect about the advertiser is misrepresented.
 The advertisement creates a false impression about a
product or service, even if the information given is
correct.
FORMS OF MISLEADING ADVERTISING

Remember that advertisements may take many different forms,

such as:
 Press advertisements in newspapers or magazines
 Television or radio commercials
 Posters telling the public about an event or concert
 Digital advertisements on websites or mobile phones
 Websites
 Shop signs (giving information unique to a particular shop)
TIPS TO AVOID MISLEADING ADVERTISING

 Don’t omit key information

All relevant information, including significant conditions to an offer,
should be made clear in the ad itself. These should be stated close, or
clearly linked, to the main claim.
 Make sure your pricing is clear
Pricing should relate to the product advertised, and include all non-
optional charges (such as VAT and booking fees).
 Don't exaggerate the capability or performance of a product
Advertising is all about presenting a product in the best possible light,
but don’t over-claim in a way that’s likely to mislead.
TIPS TO AVOID MISLEADING ADVERTISING

 Make sure any qualifications are clear

Qualifying text (small print or footnotes) can be used to clarify a claim
in an ad, but don’t use it to hide important information or in a way that
contradicts the headline claim.
 Have the evidence to back up your claims
Remember that before you run an ad, you should hold adequate
evidence to support all objective claims or those that are capable of
objective substantiation, bearing in mind the impression consumers
are likely to take from the ad.
 Be careful of claims in product names
Remember that all ad content, including your company or product
names can count as potential claims. If your product name implies an
unproven effect or benefit, this could be problematic – even if it
appears in a pack shot.
TIED
SELLING
Tied selling

 Tied selling is the illegal practice of a company providing a product

or service on the condition that a customer purchases some other
product or service.

Breaking it down?
 Tying really occurs when a manufacturer or distributor or service
provider sells a product or services on the condition that the
purchaser also purchase another product, or at least agree not to
purchase that same product or service from any other supplier.
 In Jamaica people often refer to this practice as ‘marrying’ the
product which has become a common practice that has helped
businesses sell products that are in less demand.
EXAMPLE OF TIED SELLING & WHY IT IS USED

 An illegal example of tied selling would be when your bank's mortgage

specialist tells you that you qualify for a home mortgage but the bank
will approve it only if you transfer your investments to the bank or its affiliates.
You want the mortgage, but you don't want to move your investments.
 Tied selling may be used as a means of price discrimination in that it may help
banks (or other companies) consolidate a customer's business within a single
provider.

 It can also stymie competition by giving larger, full-service companies an edge

over smaller, single-service providers or those with more limited product lineups,
such as with startup companies.

Bundling: The legal form of tying

 Tied selling differs from bundling, which combines products and can afford
consumers lower prices that if items were purchased
individually, and preferential pricing, which is better pricing if a customer uses
more of a company's goods or services. The distinction between tying (illegal)
and bundling (legal within limits) is an important one for businesses to
understand.