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by W. K. Nandanie Silva (LL.B.), Attorney-at-Law

What we always dream of as consumers, is to buy our essential goods at a fair price, of good quality and in the right quantity. Isn't that dream shattered whenever we buy a product from the market? The prices of all essential goods are increasing daily.

While the increasing prices are unaffordable the quality of goods gets lower and lower. There are so many fake goods in the market and consumers can hardly recognise the real ones. Though, they seem identical to the original, they are of poor quality and not durable. At the same time traders are always on the look out to cheat on weight and measure.

We have seen on many occasions that prices and dates of expiry marked on products are changed and lots of goods in the market are not up to standard. Consumers are exploited by the adoption of unfair practices or restrictive trade practices. In recent times the whole country had to experience the painful effects of allowing monopolies in the sale of essential goods and services such as gas, flour.

The government of a country has an obligation to protect consumers against the aforesaid unfair situations. Laws relating to consumer affairs in Sri Lanka always fell short of the ideal. Traders have always held the upper hand in their dealings with Government authorities (on consumer affairs) due to the inadequacy of the law, and various legal and practical obstacles that arise in implementing laws and regulations. As a result the consumers have had to face hardships in the hands of unscrupulous traders almost every day.

It is in this background that a new Act is enacted by the Parliament in this connection. The new law is titled "Consumer Affairs Authority Act" and it repeals the Consumer Protection Act, the Fair Trading Commission Act and the Control of Price Act.

Effective competition and pricing

The objectives of this Act are to provide better protection for consumers and to protect traders and manufacturers against unfair trade practices and restrictive trade practices. Apart from these objectives, the Act also has another important object, which is to promote effective competition and competitive pricing.

Existing Commissions and other authorities will be annulled and the new Act will introduce two institutions to deal with consumer affairs in addition to the Minister of Commerce and Consumer Affairs.

These are the Consumer Affairs Authority and the Consumer Affairs Council. The Minister has the overall powers under the Act in connection with consumer affairs including the power to appoint officers for Consumer Affairs Authority and Consumer Affairs Council. Further the minister has the power to prescribe goods and services as specified goods or specified services if he is of the opinion that such goods or services are essential to the life of the community or part thereof. The traders cannot increase the prices of those specified goods or services thereafter without the prior written approval of the Authority. The minister can direct the Authority to examine any question relating to the price of any goods or the charge for any service.

The Consumer Affairs Authority is a body corporate with legal personality and its object is to protect consumers against all types of unfair trade practices. Among other functions, the Authority has to promote effective competition between persons supplying goods and services and promote competitive prices in markets where competition is not sufficiently effective.

This seems to be a corrective measure after tremendous suffering consumers went through recently due to monopolies in the gas trade and some other trades involving essential goods. For the achievement of this objective the Authority has the power to carry out investigations into anti-competitive practices. The Authority can commence an investigation on its own motion or on a complaint or request made to it by any person or an association of traders. If the Authority is vigilant and acts honestly there is now a possibility to abolish the monopoly of trades within the legal framework.

Consumer awareness

While promoting and protecting consumers' rights the Authority has to keep consumers informed about the quality, quantity, potency, purity, standards and price of goods and services made available for purchase.

This is very important because the majority of consumers are unaware of the real price of goods. The same item is priced differently at different places.

Without knowing the correct price consumers are at the mercy of traders. If the price is high a consumer gets the impression that the particular trader is charging more, and at the same time if the price is low the suspicion arises that the particular item is a fake. To take a very common example, it is common to see kelawalla fish being sold for about Rs. 120 per 500g in one place and in another place in the same market for about Rs. 80 per 500 g on the same day. But the fish sold for the low price is not Kelawalla but Balaya. Most of the consumers are unaware that they are being misled by the seller.

This situation can be seen in the market in various trades for various products even on a large scale. Therefore consumer awareness is a must in respect of all types of consumer products.Further the Authority undertake studies, publish reports and provide information to the public relating to market conditions, consumer affairs and undertake public sector and private sector efficiency studies. The Authority also has been entrusted with the function of promoting consumer education with regard to good health, safety and security of consumers. The Authority has the power to carry out investigations and inquiries in relation to any matter specified in the act.

Consumer societies

Promoting, assisting and encouraging the establishment of consumer organisations is one of the functions of the Authority. In the opinion of this writer a consumer organisation if it functions well, is more powerful than authorities, officers, ministers or traders. This is because any trade or industry totally depends on consumers and if consumers collectively reject any product it would spell the end of such product. If any product or any service does not conform to the standards and specifications or does not conform to the warranty or guarantee given by implication or otherwise, there are many things that can be done by the consumers without silently bearing the loss. Consumers can claim damages or compensation or a refund of the amount paid or provision of the service or supply of material as the case may be. In such a situation consumer societies are more powerful and more effective than an individual. If the consumers and consumer societies in the country are strong and powerful the traders would not be able to increase prices arbitrarily.

Consumer Affairs Council

The Consumer Affairs Council is established to hear and determine all applications and reference made to it under the Act.

The Council shall determine matters referred by the Authority regarding anti-competitive practice and if anti-competitive practice exists and it operates against public interest the Council can make orders to terminate such anti-competitive practice or take any other action as the Council may consider necessary. The Director General of the Authority can refer any matter to the Council regarding excessive price or any market manipulation or other market imperfection and the Authority on the recommendation of the Council can fix the maximum price above which goods shall not be sold or the services shall not be provided.

Whatever the Authorities or Councils there are, consumers' protection exists only if those are functioning efficiently.

The efficacy of those institutions depends on the qualifications, quality and integrity of the members constituting those institutions. If the members act according to the whims and fancies of the politicians and traders the whole purpose of the Act will be lost. Therefore it is the Minister's responsibility to appoint highly qualified, strong and quality people for the authority and the Council if he is serious about safeguarding consumers' rights.

Rights and remedies

The consumers should be aware of the rights and remedies available to them when aggrieved by misleading or deceptive conduct or false representations or unfair trade practices or restrictive trade practices or anti-competitive practices. Consumers can complain to the Authority if the production, manufacture, supply, storage, transportation or sale of any goods and the supply of any services which does not conform to the standards and specifications determined by law and if 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.

Such application should be submitted in writing within three months of the sale of such goods or the provision of such service.

After an inquiry into such a complaint, if the Authority is of the 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 deem 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.

This remedy was available under the previous Act too. But there is an improvement this time, that is, where any manufacturer or trader fails or refuses to comply with an order made by the Authority, an application can be made in that behalf by the Authority to the Magistrate's Court and the amount can 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.

If goods are being sold or services are being provided at an excessive price, any member of the public or any association of persons or any organisation can request the Director General to refer such matter to the Council for investigation.

There is another opportunity to consumers to make complaint to the Authority against any breach of implied warranty provided by this Act. Such complaint can be made in writing within one month of the supply of such goods or the provision of such services.

If any breach of an implied warranty has taken place, the Authority can order the trader or other person to pay compensation to the aggrieved party or refund the amount paid for the supply of such goods or provision of such services and for the supply of any materials in connection with the provision of those services.

Misleading or deceptive conduct or false representations are prohibited and constitute offences under the Act.

Therefore in the event of a consumer being mislead or given false representations, the relevant person can be prosecuted and be punished by way of a fine or imprisonment or both. Misleading or false representations encouraging consumers to buy goods or services is a very common occurrence in our country. In the opinion of this writer these provisions can be used to prohibit or correct misleading advertisements.

Comprehensive definitions

The other important feature in this Act is the enlargement of definitions of some expressions to ensure better protection of consumers. The expression "consumer" has been elaborated to include "potential users" as well.

Under this Act a consumer means "any actual or potential user of goods or services made available for a consideration by any trader or manufacturer".

The words "manufacturer", "trader" and "service" also have been widely defined to cover every possible area. "Service" means service of any description which is made available to actual or potential users, and includes -

(a) banking, finance, insurance, shipping and entertainment;

(b) the construction, production, manufacture, supply, storage, maintenance, repair, treatment, cleaning, processing or alteration of goods;

(c) services in connection with the import, export or distribution of goods;

(d) the transportation of goods and passengers;

(e) the cleaning of building and building premises;

(f) the sale and supply of any utility services including electricity, water, gas and telecommunication;

(g) the provision of information technology and communication;

(h) professional services such as accounting, auditing, legal, medical and health, surveying, architecture and engineering.

In these circumstances the providers of the above services have to be very careful in providing such services. If there is a deficiency in rendering of services any consumer can complain to the Authority. Considering the manner in which such services are provided in our country, we may see a plethora of litigation against traders, banks, insurance companies, hospitals and the medical profession.

Implementation of Laws

Enacting laws alone is not sufficient, the most important thing is the proper implementation of such laws. If all responsible persons are determined to implement these laws impartially without any irregularities consumers will get some sort of relict. It is our duty as consumers to make use of all these opportunities to protect our rights. In other countries such as India there are so many occasions where banks, hospitals, transport authorities and many other institutions have been held liable for deficiency in service.

Compensation awarded to consumers for breach of warranty or guarantee and where any goods or service does not conform to the standards and specification.

The new legal regime provides the Sri Lankan consumer with the necessary infrastructure to obtain these benefits if they are vigilant and active enough.

Apart from the officials of consumer authorities, consumers also have a major role to play on getting rid of unpleasant market situations and in protecting their rights. Therefore whenever one is subjected to unfair treatment at the hands of a trader one should come forward and take action against unscrupulous exploitation of consumers. Thus if the dream of the consumer is to come true the officials who will take over the responsibilities of the envisaged Authority and the Council should be honest, fearless and have an understanding of the requirements of the ordinary consumer. In its efforts to achieve the objectives of the new law one of the foremost tasks the Authority should undertake is the taking of action to bring down the prices of essential goods through promotion of healthy competition among traders. If they succeed in achieving this it will be a great relief for the consumers as well as to those who worked hard to bring this new law into being.

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