Printed in the "Business Monday" newspaper on May 18, 2009
Being competitive and treating consumers fairly is good
business sense. However, in the heat of
competition sometimes false claims may be made about goods and services. False
claims can hurt consumers and businesses alike. Consumers may be misled into
purchasing a product because of false claims made by a business and then later
discover that the product does not live up to the representations made. On the
other hand, ethical businesses may be hurt as false statements can give a dishonest
business an advantage in the marketplace over its competitors.
The Consumer Protection Act CAP 326D shields consumers
against misleading, deceptive and unfair trade practices by placing an
obligation on businesses not to engage in conduct that is, or is likely to
mislead or deceive consumers. It should be noted that it is not necessary for a
consumer to be misled for there to be a breach of the law. Part III Section 12
of the Act states that "A person shall not in trade or commerce as a
supplier engage in conduct that is, or is likely to be misleading or deceptive."
Therefore, if the conduct of a business is likely to mislead, then the
Consumer Protection Act is contravened. The pertinent question that we may want
answered is, "Who is misled?". Generally speaking, conduct will be perceived as
misleading if it has the capacity to mislead members of its targetted audience,
in other words, the section of the public to which the business is directing
It would be unfair to hold a business liable for an
advertisement that was plain and intelligible, provided the relevant
information and which did not mislead a reasonable person, but misled a person of
poor judgement. The Consumer Protection Act outlines a variety of misleading
representations in respect of goods and services. Below several examples to
illustrate misleading representations are listed. It is unlawful for a business
to falsely represent that:
A computer is new when in actual fact, the
computer has been used and has personal information belonging to someone else
stored on the hard drive.
A car is a 2006 model when the vehicle is a
A box of cereal is listed at $8.99 and at
the cash desk, the scanned price is shown as $11.99.
An item is made in Barbados and a tag
attached to the item shows that it was made elsewhere.
A specific artiste will be performing at a
show and the artiste does not perform.
A consumer will receive a free gift or
prize with the supply of goods and services when the supplier does not intend
to provide the item offered.
A consumer must purchase an extended warranty
to be entitled to redress should the item prove to be defective after purchase.
The law gives consumers statutory guarantees.
It should be noted that these guarantees go beyond the warranty. The statutory
guarantees are absolute and cannot be excluded by suppliers and manufacturers. The law provides express remedies to
consumers for breach of the guarantees through the refund of monies paid,
repair and replacement. Damages are also payable for consequential loss for
personal injury distress and inconvenience. It is important to note that the
statutory guarantees granted by the law, afford consumers fundamental rights to
those granted by warranties of individual businesses.
Businesses must ensure that they continue to keep
abreast of the requirements of the law, as a contravention of the Consumer Protection
Act may lead to stringent fines being imposed on conviction, in a court of law.
Where an individual (sole trader) is found guilty, the individual is liable to a
fine of $10, 000 or to imprisonment of two years or both. If it is a person (e.g.
a corporation) and not an individual, the fine is $100, 000.00. Where a corporation is found guilty any
director who has knowingly authorised or acquiesced in the act that caused the
offence is liable to a $25,000.00 fine or two years imprisonment or both.
therefore advised that it makes good business sense to implement compliance
programmes to ensure that their employees at all levels are carrying out
necessary checks to reduce the likelihood of breaches of the Consumer
Protection Act. Remember that the Commission's staff is available to assist you
on the requirement of the law.
Mr. John Davies, Senior Vice President of Compass Lexecon (Paris) delivers his presentation on Competition Policy and Economic Development – is there a link for Small Economies? to the audience at the FTC’s 13th Annual Lecture.