Business Consumer Affairs

Citizens Advice Bureau

This is a concept which is successfully operated in the United Kingdom and Europe in order to help the public in any area that they need assistance for. The society has so complicated that its citizens cannot decide where to go and what to do when they are faced with complicated issues.

We must learn to import and accept good things from the West. This is one of the best systems to help the public in most areas. The CAB in the UK is assisted and mooted by councils, voluntary organisations and societies. There is a head office which gives directions to the CABs which are completely backed by the government and also the European Union.

The model envisages in Sri Lanka will be situated in the CAA premises assisted by the Legal Aid Commission, Legal Aid Foundation, the Government Call Centre (1919), Quality organisation and the public. Anybody who needs assistance can walk in, telephone or write to the CAB.

There are plans to obtain the services of volunteers, retired senior government servants, academics and professionals. This will be managed and run by minimum expenditure and by using available resources.

His Excellency the High Commissioner of the United Kingdom was briefed on the project and is prepared to be present as the Chief Guest and extend full co-operation to launch the project which is prevalent in the United Kingdom.

Apart from this project there are many on the pipe line. Cost of Living, healthy living and simple life mooted on previous pages is a concept to be promoted in order to educate the citizens a simple healthy life and also to give guidelines as to what to buy, what not to buy, where to buy and how to buy, healthy consumer items of highest quality for reasonable price.

The CAA has also mooted and commended the national agricultural policy put forward by the government which is a need of the hour. It is also necessary for the CAA to strictly adhere to and to implement Section 26 of the CAA Act which requires all the traders to exhibit the prices of consumer items.

The CAA has mooted the vision and the aim for a “Just Trader and Alert Consumer”. To achieve this end the authority has identified one hundred good traders to whom trophies and certificates were presented in recognising their services to the society, by being acting reasonably and professionally, especially during the festive season.

The CAA has taken steps to be environmental friendly and to live with the nature. We have published the full speech of Honourable Ladyship Justice Shirani Tilakawardena’s presentation on 31 July 2007, at the Workshop on Compliance with Judicial Orders through Greater Citizen participation organised by the Public Interest Law Foundation and the Centre for Environmental Justice.

It is time for professionals and activists to be active in order to help the public and to bring down the price of consumer items, especially and mainly the life ordinary consumer who consumes essential items.

The CAA has looked into the problems of consumer in depth that are at the mercy of banks and lending organisations. CAA being the regulator has played a major role in acting as a buffer. In this sense CAA has taken steps to organise a number of seminars on New Companies Act.

The other main conceptual proposal is the Home Grown Consumer Courts based on Courts in India and other parts of the world. There is a proposition to make use of the Mediation Board which has spread all over the country to share the burden to the CAA, in order to harmonise the duplicity and for effectual and fast remedies.

It is the duty of the CAA to improve and assist healthy competition and also be cautious on large scale mergers in order to prevent carting. Carting is a process where the trader is benefited but not the consumer. Proposals have been suggested by the CAA during the process of the amendment to the CAA.

Unethical Promotion of Drug and was the main theme of the Consumer Day. It is time for the Ministry of Health to work hand in hand with the CAA, SLSI in order to bring strict regulations in the drug trade which is as lucrative as oil or any other major trade in the world.

As a result of the magnitude of drug trade, the victims are the consumers who are being exploited by drug traders and professions. It is alleged that the doctors are in the pay roll of these drug people.

It is time for the consumers to get themselves organised. As in other parts of the world consumer is always right and consumer is the king. Unfortunately it is not necessary the case here to achieve this.

Authority has a target of setting up Consumer societies in every village. We have to achieve this soon based on our activism and hard work of the staff.

The CAA works hard to achieve the end results and exercising the balancing of proposals. CAA is obliged to carry on the government policy, Mahinda Chintana and the Act. It is not easy and it has to be done in the interest of the majority.

It is time for the public to work hand in hand with the CAA, the Government, traders, industrialists, manufacturers and organised consumerism at large. The CAA has acted as a catalyst in the promotion of rice based food.

An year ago CAA has activated it by conducting seminars at various places and organising the government and private sector such as ITI, SLSI, Government Research Institution and the private sector.

The rest was very successful and it is time that the public take part in activism. It is very pleased to hear that many other private political, government and non government organisations have taken steps on this direction.

The CAA has mooted for a consumer charter in Sri Lanka and World Charter. This is necessary to be as guidelines and also to take part in international affairs on this aspect.

The response we have received was very encouraging.

It is also time that the government to take measures to avoid duplicity in various organisations, for example ITI, SLSI, CAA and Health Department should work together hand in hand identifying the areas of work independently or jointly.

Popularization of local food consumer items and local industries were mooted by the CAA. It is time for us to promote our own milk. 20 years ago we were not importing any milk powder.

Unfortunately the government and semi government industries sold to private sector and we depend on foreign countries for milk powder. This is very sad that we spend billions and billions of our national economy on food items.

50% of food items are imported at a cost of Rs. 900 billion which can make our country one of the most economically powerful. It is time as His Excellency has mooted to grow our own food on all free available spaces. Only solution is to grow our own food which is cheap, healthy and free of poison.

What we import is not necessarily healthy and obviously not fresh. We could understand why we import apple which are stored for months and consume when we have our own fresh pairs, bananas, papaw which are very expensive in other parts of the world. Papaw which is sold in Sri Lanka at Rs. 40 on the market will be around GBP 2,000 in a Super Market in the United Kingdom.

We import this food from Australia, USA and other countries which have cold climates. The fruit in cold climates are not tasty and healthy.

We could not understand why Coca Cola which is poisonous in place of Thambili which is most nourishing. We do not understand why people eat bread of wheat flour which is harmful and less nourishing when we have our own local rice which is of highest nutritious values on which our ancestors lead healthy and long lives.

This shows that it is time for us to change our attitude on our living to live with nature and to live a simple life. This process will definitely bring down the cost of living.

Government has introduced legislation to control the essential items such as gas, flour and other other 14 items. The traders will have to seek permission from the CAA in the event of any increase of prices.

These are thoughts in the programme for the CAA for which the public has full endorsement and support.

The main and most important budget before us is the CAB which we will be inaugurated in the near future.

Therefore we urge the public to respond to our message and educate and help us in order to improve and carry on our project.

Consumer Affairs Authority

Facts to remember before purchasing

* Recognize the difference between needs and wants. Needs are

your basic requirements and wants are created by the marketers.

* Make the right choice based on

- Information

- Your needs

- Safety for you and for the environment

* Plan before you shop

- What to buy

- How to buy

- Where to buy

* Check details of products or services such as:

- Labels. Don’t just look for them. Read them carefully

* Check for safety and quality certification

* Do not pay more than the Maximum Retail Price (MRP)

and other important information printed on the label

* Do not buy unlabelled packaged goods

* Ask the store persons to explain the return or exchange policy

* Read and follow the instructions of the product

* Use the product only as recommended by the manufacturer

* Read warranties carefully

* Read the forms given for your signature carefully before you sign it

* Don’t believe every advertisement you see. In actual purchase,

conditions may differ.

* Do make a serious effort to resist sales pressures

* Carry your own environmentally friendly bag when you go shopping

* Keep all sales receipts, warranties and instructions

* Don’t believe the statement “Goods once sold will not be taken

back or exchanged”. This statement is illegal and holds no value.

- Chandrika Thilakaratne

Director Consumer Affairs and Information, CAA

Promotion of competition and consumer interest

The Consumer Affairs Authority may either of its own motion or on a complaint or request made to it by any person, any organization of consumers or an association of traders, carry out an investigation with respect to the prevalence of any anticompetitive practice.

An anti-competitive practice shall be deemed to prevail, where a person in the course of business, pursues a course of conduct which of itself or when taken together with a course of conduct pursued by persons associate with him, has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods in Sri Lanka or the supply or securing of services in Sri Lanka.

Determination of standards and specifications relating to goods and supply of goods

The Consumer Affairs Authority may for the purpose of protecting the consumer and ensuring the quality of goods sold or services provided, by Notification published in the Gazette, from time to time, determine such standards and specifications relating to the production, manufacture, supply, storage, transportation and sale of any goods, and to the supply of any services.

The Authority may by Notification published in the Gazette adopt such standards and specifications prescribed by the Sri Lanka Standards Institution established by the Sri Lanka Standards Institution Act No. 6 of 1984, relating to the production, manufacture, supply, storage, transportation and sale of any goods and to the supply of any services as standards and specifications to be determined.

The Authority may inquire into complaints regarding-

(a) the production, manufacture, supply, storage, transportation or sale of any goods and to the supply of any services which does not conform to the standards and specifications determined.

(b) the manufacture or sale of any goods which does not conform to the warranty or guarantee given by implication or otherwise, by the manufacturer or trader.

A complaint which relates to the sale of any goods or to the provision of any service shall be made to the Authority in writing within three months of the sale of such goods or the provisions of such service, as the case may be.

At any inquiry held into a complaint the Authority shall give the manufacturer or trader against whom such complaint is made an opportunity of being heard either in person or by an agent nominated in that behalf.

Where after an inquiry into a complaint, the Authority is of opinion that a manufacture or sale of any goods or the provision of any services has been made which does not conform to the standards or specifications determined or deemed to be determined by the Authority, or that a manufacture or sale has been made of any goods not conforming to any warranty or guarantee given by implication or otherwise by the manufacturer or trader, it shall order the manufacturer or trader to pay compensation to the aggrieved party or to replace such goods or to refund the amount paid for such goods or the provision of such service, as the case may be.

Where any manufacturer or trader fails or refuses to comply with an order such manufacturer or trader shall be guilty of an offence under the Act, and the sum of money due on the order as compensation or refund may, on application being made in that behalf by the Authority to the Magistrate’s Court having jurisdiction over the place of business or residence of such manufacturer or trader as the case may be, be recovered in like manner as a fine imposed by such court, notwithstanding that such sum may exceed the amount of a fine, which that court may, in the exercise of its ordinary jurisdiction, impose.

Globalisation, competition, competitiveness and consumer protection

The experiences of poorer countries in assessing the impact of globalisation on competition, competitiveness and consumer welfare, it is reported the during economic reforms in Uganda, extensive economic liberalisation, including the privatisation of State enterprises, had led to a number of anti-competitive practices by foreign firms which constituted abuse of dominance.

Such practices included buying off competitors, and dumping defective, hazardous and/or substandard goods on domestic markets. It has been reported that some firms had been accused of selling substandard lubricants to rural consumers, and marketing suspect dairy products, beef, cooking oil and other food items under the guise of food aid.

Other examples of unscrupulous business practices included the misuse of ISO 9000 as a product quality mark. Also, competition had been distorted by leading firms’ price-fixing and market-sharing arrangements, particularly in the beverages and petroleum industries.

It was reported that the trade associations formed by those two industries were an excuse for fixing prices and sharing markets.

It emerged from the discussions that many developing country Governments had largely been unable or reluctant to respond to complaints lodged by consumer protection associations and the general public for a number of reasons.

These included the absence of competition and consumer protection legislation or authorities, a lack of resources - both human and financial - to investigate complaints, impotence in the face of global mergers and acquisitions for fear of retaliatory action by some large firms’ home country, political interference, and fear of frightening away foreign direct investment.

Experts pointed out that in some cases, while looking for the benefits of globalisation many countries were grappling with anti-competitive practices arising from mergers and acquisitions by mega-firms as a result of trade liberalisation and privatisation. These mergers and acquisitions had been mainly in the banking and financial sectors, and in tourism.

Problems relating to various types of international fraud, such as pyramid schemes, had been uncovered by developing countries. An intensive education campaign in that connection had had little effect, particularly among consumers from the poorer sections of the population, and many had lost money as a result of such schemes.

While some of the abuses had been prosecuted in some countries under common or criminal law, there was an urgent need for specific legislation. Other problems, which Governments were trying to come to grips with, included jurisdictional issues relating to electronic commerce and cases of counterfeiting.

It was indicated that in countries whose competition law did not include provisions relating to mergers and acquisitions, there was some scope for examining mergers and acquisitions, under legal provisions covering anti-competitive practices and for recourse to common-law principles.

It emerged from the discussions that this issue should be revised and that competition laws should include specific provisions relating to mergers and acquisitions, with factors such as market thresholds, scales for competitiveness and the size of domestic markets in a global market being taken into consideration.

At the regional level several integration groupings, including the Caribbean Community (CARICOM), had formulated community competition policies that were expected to boost national laws. The harmonisation of national competition laws and issues concerning the extent to which sovereign rights might have to yield to regional concerns remained to be tackled.

Other issues, particularly for countries that had not yet introduced competition law, related to the availability of resources for implementation and the costs associated with it.

In addition, participants referred to the potential conflict with other agreements, including on trade and investment issues, and to implementing competition policies in smaller economies while giving specific consideration to the particular vulnerability of those economies.

If consumers were confused by the information given by the seller, it might be appropriate to require greater disclosure. Where there was an uneven basis of comparison, pro-competitive standardisation would be appropriate and standards bureau had an obvious role to play in this regard.

It was pointed out that information-sharing among competition and consumer protection authorities was vital for curbing international frauds such as pyramid schemes. A question raised in this context was how to protect consumers in a global economy.

It was reported that the United States International Consumer Database monitored such schemes, and that the database was available to any country that might wish to use it or contribute information to it.

Consumer education on a global basis, information-sharing and transparency were necessary in order to make consumers better able to protect themselves from unscrupulous business practices.

Countries needed to undertake joint action to safeguard themselves against cross-border fraud. Areas of particular concern to consumers in e-commerce were security issues related to payments on-line and consumer redress in the event of disputes.

It was stressed that competitive markets were the first line of defence, and Governments were urged not to compromise free-market principles in the quest for consumer protection.

- Executive Director, CAA

Questions and Answers

1.(Q) I bought a dress from a shop for Rs. 2250 to give it as a present for one of my friends. Having understood that it is not suited, I tried to get it changed after two weeks time. But they failed to do the needful although they promised at the point of selling.

(A) It is your duty/ responsibility to bring the matter to the attention of the shop keeper as soon as possible for the purpose of getting what you intend. However, you can lodge a complaint with the Authority in the first place to determine the facts of the case.

2.(Q) The sole of pair of shoes which was bought by me gave way and as a result it was, I returned to the company. They say that they can neither refund the money nor give a replacement but repair only.

(A) If the item purchased fails to satisfy the needs of the customer either a replacement or a refund should be given you may put up a complaint to the CAA.

3.(Q) When inquired about a Gas cooker of a certain brand which I preferred, I was forced to buy another brand which was said to be better. But it does not work properly.

(A) As per the provisions of the CAA Act No. 9 of 2003, cheating or deceiving a customer is an offence. You may make a written complaint to the Authority to proceed further.

4.(Q) I bought some medicine as a treatment for my sickness, but they are available at lower prices at the market place.

(A) As there is no control over prices of medicine, it is the duty of the customer to inquire into price of such medicine before purchasing. At the same time prices of medicines produced in various countries are different depending on cost of production and the raw materials.

5.(Q) I was charged a sum of Rs. 1,560 for a pair of shoes the price of which had been marked at Rs. 1,290. When inquired, I was told that the price has been increased now.

(A) No trader can sell or offer to sell items over the prices marked on the items.

The customer has the right for a refund of the money additionally charged from him. If the trader continues to commit the same offence, legal action can be initiated against him.

6.(Q) I bought a pair of gold ear studs from a jewellery shop. When I took them for pawning, I was told that it is not made of pure gold. What redress can I get?

(A) Jewellery made are valued in carat. There is 16,18,20,22 and 24 gold carot. Jewellery are inspected by the Gem and Jewellery Authority. Make your complaint to the CAA for representation.

7.(Q) There was a permanent sticker on a computer accessory stating “Life time warranty” when purchased. While using it went out of order. When it was taken for a replacement, the trader didn’t agree to replace it free of charge but giving other definition for the warranty. I “Life time warranty” meaningless?

(A) If such warranty is given, the trader should replace it free of charge. If he fails to do so, he can be charged for deceptive conduct under CAA Act.

8.(Q) Engine oil for three-wheelers is measured with empty Coca-Cola bottles at fuel pumping stations. Do we get the actual quantity?

(A) Each and every measurement is stamped yearly by the relevant officials. So this measuring cannot be correct as it is not yearly stamped. It cannot be used for business purposes. It is illegal.

9.(Q) I understood that the item purchased from the shop “X” is not in conformity with the required standard. As I was not issued a bill/ receipt, is it impossible for me to have redress?

(A) The Customer should be issued a bill to confirm the dealing, but it is not in any way, a barrier to make a complaint to the Authority.

10.(Q) The price of book published in India now has rapidly decreased. But I was charged Rs. 750 which is the price marked on the cover of the book.

(A) Based on the cost of production, manufacturer/ publisher of the book has marked the price of the book which you purchased. Even though the new editions of the same book are available at lower prices at the market old editions can not be sold at the new rate.