Be consumer friendly

This is a warning and a reminder to the traders, manufacturers and industrialists who are not complying with the Act No. 9 of 2003 and the directions of the Consumer Affairs Authority.

Section 26 of the CAA Act No. 9 of 2003 reads as follows:

1. Every trader shall exhibit conspicuously in his place of business, a notice specifying the maximum retail or wholesale price, as the case may be of goods available for sale in his place of business other than the price of any goods, the price of which is marked on the goods itself or on the wrapper or pack containing it or marked in any other manner as may be required by any law.

2. A complete list of the price of goods available for sale shall be kept within the place of business at all times for inspection whenever required.

It is the duty of every trader to exhibit the price irrespective of what the consumer item is which includes services which comes under the ambit of the Authority.

We have twice warned car sales and the importers to exhibit the prices on the windscreen. Few have complied with and we have prosecuted many. From next week our officers will visit all the car sales and the importers to check whether the price of the vehicle is affixed on the windscreen or in a consequence place.

It is the duty of the seller to sell the consumer items of proper standard and more importantly proper documents. There is a practice of selling vehicles on “open papers” and a power of attorneys which are illegal and unacceptable. It is morally and legally wrong and not a good trade practice.

We also remind the finance companies and leasing companies to be more consumer friendly and to comply with the Act. Details on directions and the procedure of the CAA in the implementation and the presentation by a very senior officer who is heading the most important institution in regulatory powers and maintains standards will appear in the next issue.

We invite the public to respond to us and our contact details appear elsewhere in this page.

Sarath Wijesinghe,
Chairman

Competition Law implementation

The Consumer Affairs Authority (CAA) was established by repealing the previous two legislations which were functioning for the benefit of consumers. The Fair Trading Commission (FTC) was implementing the competition policy in Sri Lanka since 1987.

We were the first to introduce a comprehensive competition policy in the region and unfortunately the major portions of the competition policy viz. Control of Monopolies and Mergers have been omitted leaving with only Anti Competitive Practices under the present legislation. Therefore, as of today we are not having a comprehensive competition policy.

In terms of establishing the competition agency a phased approach may be appropriate to the design and implementation of a competition law.

Given its limited resources and novelty, the agency should start with actions which will most likely benefit the market and build its own acceptability. Gradually, it would introduce measures which require more sophisticated cost analysis.

Merger review comes often conduct control due to the fact that the welfare effect of merger might be less clear than that of price fixing or collusion, the later being positively welfare diminishing and easily identifiable by the polity and public.

Development is continuum, and the stages will never be all this clear and in some cases different priorities will be appropriate. In some economies specially those that have a legacy of state owned or other dominant firms, abuse of dominance might also require a priority similar to that give to horizontal restraints.

However, in exercising its powers to tame public sector monopolies, the agency has to do it slowly rather that follow the rule book. This is because while people as consumers would like some restraint on public sector’s anti-competitive and anti-consumer behaviour, the establishment feels subconsciously threatened what action is taken against them. This is often reflected in public support, often compose by politicians and trade unions, that it is people who are being penalized when public sector firms are upbraided.

The stages suggested are organised according to the degree of difficulty authority’s face in doing cost benefit analysis of the impact of competition measures on social welfare. However, it might well be argued that legally sound prosecution of price collusion turns out to be more difficult than a merger review.

In fact it is generally easy to establish the ill-effect of a collusive behaviour but often difficult to prove in a court of law, due to lack of legally-sound and solid evidence.

Therefore, the actual plan should take into account the damages caused to the economy and consumers of a particular Anti-Competitive act, but also the chances of success and the expected return on the money spent in pursuing the case, given the relative probabilities of success through other lines of action or public policies. This is commonly accepted in many developed countries.

Need of the hour

With respect to building the competition agency, some key steps will include securing appropriate financial resources to:

Acquire physical premises and equipment.

Recruit and train staff.

Develop databases and information channels.

Develop internal procedures for investigation and prosecution of cases.

Develop and implement compliance education programmes.

Conduct public education activities.

Activities engaged in by the competition agency should aim at creating a “competition culture” by the effective implementation of the competition law. Public education is vital to facilitate the acceptance of competition policy principles as important elements of the national economic and development policy, both with the polity and public.

- Executive Director, Consumer Affairs Authority.

Direction on price marking on imported items

According to the Government Notification No. 1505/15 of 11 July,2007, the Consumer Affairs Authority acting under the powers versed in it by Section 10(1) of the CAA Act No 9 of 2003, has directed that all importers, suppliers, agents, distributors and sellers of pre-packeted goods, articles and products listed hereunder shall have the “Maximum Retial Price” , the name and the registered address of the manufacturer, supplier, importer or distributor clearly denoted on the pack or container of each product or article in the English Language at the point of entry to the island:

Schedule of goods - Confectionery

(including Chewing Gum),- HS Code No 1704,Chocolates - HS Code No 1806,Biscuits - HS Code No 1905

Cakes - HS Code No 1905

Toilet Soap - HS Code No 3401

This Direction (No 12) shall come into effect from 01 October, 2007. Further the Consumer Affairs Authority, acting under the powers vested in it by Section 10(1) of the Consumer Affairs Authority Act No. 9 of 2003 under Direction No. 11, has rescinded Direction No. 8 published in Gazette Extraordinary No. 1466/25 of 13 October, 2006 read with Gazette Extraordinary No. 1475/12 of 13 December, 2006.

Key concepts of consumer education - (Part 3)

This article reviews the following concept:

Role of the consumer as a member of society

Consumers are individuals who are linked to the society. Therefore the actions taken by these individuals have an effect on the society as a whole.

1. The consumer must become fully aware of his actions on others and society. This awareness will lay the foundation on his decision making with regard to purchasing of goods and services. Buying behaviour of individual consumers will affect the economic, social, cultural, environmental and political system of the country.

2. Consumer must be responsible on his decisions on purchasing of products and services. Always as consumers we have to analyze the advantages/ disadvantages of the products/ service before making the decisions to purchase.

3. Consumers must become more human in their decisions and actions. “The act of buying is a vote for an economic and social model for a particular way of producing goods”.

4. The consumers must ensure that our act of buying contributes towards a fair, just and equitable economic and social model. Individual consumer’s choices on the products and the brands will contribute to make the macro-economic environment of the country. Before selecting a particular brand of a products as consumers we must critically assess the beneficial/ potential harmful nature of that product.

We must not be the passive followers of the appealing advertisements the companies put forward to promote their products. As consumers we must communicate a strong message that the consumers cannot be cheated with misleading advertisements.

Values of a rational consumer

We as consumers can promote some important values in the society. Once this value system is established in the society, this will contribute the promotion of a fair and equitable economic and social system within the country.

(1) Must recognise the “Value for money”

Consumers earn money often through hard work. This precious income must give them reasonable purchasing power. Consumers must spend the money very carefully. Before taking the decision to purchase they must ensure that they get the right value for the money they spend. Wasteful spending habits can contribute to price increases and inflation. Price increase and inflation have an impact on reducing the value for money.

(2) Must stand for the rights

As consumers always we must know our rights as consumers and must try to implement those within the society. Consumers must be alert on their rights and once the rights are not fulfilled must be actively involved to obtain the rights. They must help others and act as a team in order to fan-out solutions for common consumer problems in the area.

(3) Must be genuine and fair

Consumers must be fair in all dealings with regard to purchase of products and services. When they face a problem in the market place as the first step, they can discuss with the trader/ company to find out an amicable solution to the problem. If this becomes a failure then they can request the assistance of a regulatory body who deals with the consumer complaints.

They must be fair in their request on the damage/ claim from the company. The amount of compensation must actually reflect the damage/harm caused to the consumer by the defective productive/ deficient service.

(4) Recognise the value of natural environment/ resources

In the production process of goods and services inputs are taken from the environment and affluent/ wastes are disposed to the natural environment. In this process, depletion of natural resources occurs and pollution of the natural eco system is also happens.

Even though there is lot of efforts taken to minimise the damage to the natural eco system with the rapid industrialisation process this has not achieved a considerable success. Even thought there are several mechanisms introduced to promote environmentally friendly manufacturing systems lot of industries focus on short-term profits and do not pay attention to invest on environmentally healthy manufacturing systems.

Therefore as consumers we must pay attention to the fact that whether the product has come through an environmentally friendly process and whether the product is environmental friendly.

Role of the consumer organisations

Individual consumer’s voice is some times not strong enough to recognise his rights by the traders. Therefore, it is of vital importance that consumers organise in to groups where they can raise a strong voice on behalf of the interests of the consumers as a whole. Consumers need to join and support the consumer organisations because these organisations have an important role to play in the civil society.

The contributions expected from these consumer organisations can be described as follows:

Act as a community development centre

Consumer organisations can do a major role in the community development activities which involves consumer interests. They can provide community development services ensuring that goods, services and natural resources of the area is utilised to improve the living standard of the people.

They also educate and create awareness among consumers to play their role as a responsible consumer.

Act as a community advisory and support centre

Consumer organisations play an important role in providing advice to consumers and helping them in time of need to seek redress and a fair deal in the market place. They act as a watch dog in order to control the malpractices of the traders.

Act as a community information centre

Another role of the consumer organisations is to conduct surveys, gather market information and disseminate that information to the consumers.

This enables the consumers to make informed choices, right decisions and protect from the unscrupulous trade practices.

Act as a consumer education centre

Consumer organisations can organise awareness sessions for the consumers with the assistance of other relevant government/ non governmental organisations. The best consumer protection is self protection.

Consumers require updating their knowledge with the current affairs on consumer matters in order to protect themselves in the market place.

Act as a centre for consumer protection

One of the most important roles of the consumer organisations is to advocate on consumer protection. Consumer organisations must be always vigilant and be proactive. They must act particularly in ensuring that the consumer laws and regulations are enforced in the market place.

- Chandrika Thilakaratne
Director, Consumer Affairs and Information, CAA

Prices of milk powder and canned fish

The Consumer Affairs Authority publishes below the maximum retial price of milk powder.

400gm - Rs. 195

1 Kg - Rs. 460

400gm Welfare Pack - Rs. 152/ - distributed through Co-operative Stories, CWE and Laksathosa outlets.

These prices are applicable during the period 01 August, 2007 to 30 September, 2007. Consumers are advised to pay the amount what has been marked on the pack, which shall be equal to or less than the above mentioned prices.

With regard to canned fish, the CAA wish to inform the public that the maximum retial price of a 425gm tin of canned fish is Rs. 100/- from 01 August, 2007 to 31 October, 2007.

Questions and answers

1. Q: One customer has paid an advance keeping an order to purchase furniture which is made of jak wood. But the company has used inferior quality wood for this purpose.

A: The customer can either refuse taking over the said furniture or request for a refund of the payment made in this regard. If there is a problem, the customer can contact the CAA.

2. Q: When a customer is unable to utilise an uninterruptible service of a phone sold by the company ‘X’ and at the same time, if the company ‘X’ continuously issues incorrect bills, what can the customer do?

A: I. the customer can get the matte rectified by the company or

II. the matter can be referred to Telecommunication Regulatory Commission of Sri Lanka which act as the regulatory body on the matter.

3. Q: Today, many business institutions tend to give the customer a free issue with their products as a device to promote their business among the people. Does the customer have the right to obtain such free issues?

A: It is the duty of the business community to comply with what has been promised at the time of enter into contract.

4. Q: Who holds the responsibility regarding the payment for supply of electricity for a house situated beyond the main road?

A: All expenses pertaining to the supply of electricity from the main line should be borne by the owner of the house.

5. Q: What is the assurance that a consumer can get regarding the balance of a scale, i.e. its correctness and accuracy?

A: The trader or the shop keeper should get them verified in every 12 months from the Department of Measurement Units, Standard and Services. If not, the errant traders will be sued for not complying with the relevant law.

6. Q: Is the Consumer Affairs Authority the only place to make a complaint regarding any consumer redress?

A: No, there are several regulatory bodies and institutions which are authorised to handle the matters pertaining to their assigned subjects.

e.g. * Telecommunication Regulatory Commission of Sri Lanka

* Road Passenger Transport Authority

* Transport Commission of Sri Lanka

* Ombudsman - Insurance, Financial, Parliamentary Affairs (Administration).

7. Q: When there is an increase of prices of essential goods, can the trader/manufacture sell items over the price marked on the packet?

A: Prices approved for the increase are usually advertised by the government through media and other publications for the attention of the general public. e.g. Gas: No trader can sell or offer to sell items above prices approved by the government and no trader is liable to alter/erase the price marked earlier.

8. Q: Is the owner of any business liable for any offence made by the agent/servant?

A: Yes, where any offence under the Consumer Affairs Authority Act is committed by an agent or servant of any trader, such offence shall deemed to have been committed by such trader, unless the prove that such offence was committed due to his ignorance.

9. Q: Once I had my lunch at a certain hotel in Colombo. While I was serving myself one curry spilt on my dress. Though, I tried hard to wash out the stain with soap powder it didn’t work. I understand that some curry powder or saffron used in the curry is the matter for causing the trouble. Can I have redress regarding this matter.

A: Yes. When you come across such problems you’ll have to make a complaint to the CA Authority.

It has power to investigate into the matter to see whether the hotel has used spices which are poor in quality.