It is longer news that all over the world there will always be those classes of persons who thrive on cutting corners and cheating those they do business with, all in a bid to making great profits at the expense of others. Consumer protection, its attendant laws that provide protection and the numerous unfair business practices have today become common issues for discussion the world over. The competition to capture the customer’s attention to spend his or her income on a particular product or products, or to purchase a particular service is becoming more fervent with manufacturers and producers daily promoting bonanzas, sales shows and making bizarre product claims which most of the time are bogus and sometimes out rightly deceitful.
Consumer protection law is a group of laws designed to ensure the rights of consumers as well as fair trade competition and the free flow of honest information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair business practices from gaining an advantage over competitors. They may also provide additional protection for the frail and those unable to adequately take care of themselves. These laws are a form of government regulation, which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products – particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of “consumer rights” (that consumers have various rights as consumers), and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints. A consumer is a person to whom services are supplied for a consideration, one who acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing.
These protection laws may be federal and state statutes governing sales and credit practices involving mostly consumer goods. Such statutes prohibit and regulate deceptive or unconscionable advertising and sales practices, product quality, credit financing and reporting, debt collection, leases, and other aspects of consumer transactions. Consumer protection law or consumer law has been considered an area of law that regulates private law relationships between individual consumers and the businesses that sell those goods and services. Consumer protection covers a wide range of topics, including but not necessarily limited to product liability, privacy rights, unfair business practices, fraud, misrepresentation, and other consumer/business interactions.
Consumer rights and consumer protection law provides a way for individuals to fight back against abusive business practices. These laws are designed to hold sellers of goods and services accountable when they seek to profit by taking advantage of a consumer’s lack of information or bargaining power. Some conducts addressed by consumer rights laws are conducts deemed to be unfair business practices, while other conducts can be described as outright fraud.
The goal of consumer protection laws is to place consumers, who are average citizens engaging in business deals such as buying goods or borrowing money, on an even par with companies or citizens who regularly engage in business. Historically, consumer transactions-purchases of goods or services for personal, family, or household use were presumed fair because it was assumed that buyers and sellers bargained from equal positions.
The freedom to pursue a trade, operate a business, and otherwise compete in the marketplace is essential to any free enterprise system. Competition creates incentives for businesses to earn customer loyalty by offering quality goods at reasonable prices. At the same time, competition can also inflict harm. The freedom to compete gives businesses the right to lure customers away from each other. When one business entices enough customers away from competitors, those rival businesses may be forced to shut down or move.
The law of unfair competition will not penalize a business merely for being successful in the marketplace. Nor will the law impose liability simply because a business is aggressively marketing its products. The law assumes, however, that for every amount earned by one business, the same amount will be lost by a competitor. Accordingly, the law prohibits a business from unfairly profiting at a competitor’s expense. What constitutes unfair competition varies according to the cause of action asserted in each case. Unfair business practices encompass fraud, misrepresentation, and oppressive or unconscionable acts or practices by business, often against consumers and are prohibited by law in many countries. The law of unfair business practice includes several related doctrines. Nevertheless, some courts have attempted to simplify the law by defining unfair competition as any trade practice whose harm outweighs its benefits. The U.S. legal system for instance is a cornerstone of the free enterprise system; but the freedom to compete does not imply the right to engage in predatory, monopolistic, fraudulent, deceptive, misleading, or unfair competition. In regard to balance, competition becomes unfair when its effects on trade, consumers, and society as a whole are more detrimental than beneficial.
The average consumer in most developing countries mostly lack a formidable legal umbrella from which to ward off continuous importation of shoddy, dangerous and killer products most of which come from more developed countries; necessitating a proper regime like what is obtainable in developed countries as regarding the protection of consumers.
The need to protect the consumer is vastly growing and uncertain as the society deviates from one social value to the other. The inequality of bargaining power, protection of consumers against fraudulent, dangerous and negligent practices as well as the level of economic efficiency of these systems have severally or jointly justified the judicial, institutional and legislative interference in consumer transactions. Regardless of the regime of freedom of contract, legislations have today provided for a number of prohibitive provisions that must be excluded as contractual terms. In some other cases, the legislations have imposed certain obligations on producers of services before they can be deemed to be capable of providing same for public consumptions. The efforts of legislation to protect for instance the financial consumer are very robust in all respects. By mere legislative fiat, the consumer of financial services over the years have enjoyed adequate protection to the extent that has protected their investments and deposits in banks and other financial institutions and have largely guaranteed its requirement.
Over the years in Nigeria, lip service has been paid to the protection of the consumer or of his rights. The few attempts aimed at educating consumers on their rights are restricted to the regulatory powers of the Nigerian Consumer Protection Council (NCPC). The NCPC is a federal government parastatal supervised by the Federal Ministry of Trade and Investment, with a mandate to among others eliminate hazardous products from the market, provide speedy redress to consumer’s complaints, undertake campaigns as will lead to increased consumer awareness etc. The NCPC is however mostly perceived as a regulator that has no strong enforcement machinery and mechanism due mainly to lack of sufficient funding on the part of the government and also the lack of enlightenment on the part of the consumer about his or her rights. However the consumer has other protective reliefs in contract and or in tort whenever their consumer’s rights are infringed. Today a consumer who is also a purchaser for value can file a civil claim under the law of contract for breach of the express or implied terms of the contract of purchase of a product that turns out to be defective or incomplete in its value.
The law in Nigeria for instance recognises three situations that can be implied in contract and these are:
- Terms of contract implied by custom and usage.
- Terms of contract implied by statute.
- Terms of contract implied by case law, i.e. formulated by our Courts of Law.
You also have some common legal remedies which are made available to a consumer/buyer in the event of a breach of a contract of sale and these include:
- Specific performance of the contract.
- Repudiation of the entire contract where the seller is in breach of a fundamental term or condition of the contract.
- Damages for breach of warranty. In this situation, the consumer/buyer does not repudiate the contract in its entirety but in its stead files a civil suit for damages for the breach of a non fundamental condition or conditions of the contract.
The amount of damages that can be awarded by our law courts in any case of a breach of contract is the estimated amount of the loss directly and naturally resulting to the consumer/buyer as a result of the breach. In addition to this is also the remedy of suing under the law of torts. As is established by case law, it is a principle that a manufacturer of a product or service, for gain or profit, owes a duty to take care in the manufacture of the product or service that it delivers to members of the public. Take for instance, a manufacturer in the Nigerian case of Osemobor v. Niger Biscuit Ltd (1973) NCLR 382 was held liable for injuries resulting from the presence of a decayed tooth in a biscuit bought by the plaintiff.
Apart from the manufacturer or producer, other entities in the distribution chain of products and services like wholesalers, retailers, distributors, sub-dealers, etc could equally be held liable for negligence in the sale and or distribution of defective products. On negligence, a claimant must, in addition to establishing that a producer or manufacturer or any other party owes him a duty of care and that this duty of care was breached by the defendant not exercising reasonable care, provide evidence that the direct result of the breach of the duty of care is what resulted in his loss or injury and damage(s). Where there is no damage however, the court of law would not award compensation even if a duty of care and the breach of that duty of care are established by the claimant.
In general, consumers under the Nigerian consumer law are accorded numerous statutory rights and protection and they include:
- The right of the consumer to receive products and services that is safe.
- The right of the consumer to comprehensive information on the qualities, quantity and value of the product. False or misleading information on products that are likely to create a wrong impression as to quality, character, value, composition, merit or safety of the product are not tolerated under the law.
- The right of the consumer to be heard in time and obtain redress expeditiously.
- The right of the consumer to receive compensation in spite of a successful criminal prosecution of the offending manufacturer or distributor or retailer or wholesaler of the product.
Without proper product quality policing, the undermining of the rights of the consumer to risks of fraud and in some case grievous bodily harm will be amongst others the down side of globalisation. Governments on the one hand, consumers on the other and key industry players must enlighten themselves and the consumers on best product standards and practices, and where this falls, penalties and compensation should be imposed without protracted and or prolonged litigation or prosecution. Business owners must also contribute their quota in protecting consumers by engaging in fair and honest practices as making profits at whatever illegal means will do more harm to their businesses in the long run; securing the goodwill of their customers will turn out to be more profitable in the long run.
Consumer protection laws would also need to be amended and re-enforced to cater for consumer exposure to trade on the internet. The existence of an up to date data online legislation in Africa would also go a long way in remedying this lacuna. There is the need for case law to revisit the current practice of only awarding nominal damages for product liability cases that do not result in the death or fatal/permanent injury to the consumer. Exemplary damages are an alternative remedy that may serve as a deterrent and warning to all manufacturers to deliver only the best and safest products to members of the public.