Consumer Protection

CONTENT

1.         Consumerism/ consumer protection

2.         Reason for consumer protection

3.         Methods of consumer protection

4.         Consumer protection by legislation

A consumer is an individual who make the final use of goods and services provided by a firm.

Consumerism refers to organized efforts or actions of consumers or individuals to protect themselves against the unfair practices of businessmen.

Consumer protection is a process whereby the government or its agents and also private organizations try by various ways such as legislation, standards, price control etc to ensure that consumers derive maximum satisfaction from commodities they purchase and to reduce their exploitation by manufacturers, wholesalers and retailers.

NEED/REASONS FOR CONSUMER PROTECTION

1.         To ensure that consumers derive maximum satisfaction from commodities they purchase.

2.         To reduce exploitation of the consumer by the manufacturers and middlemen

3.         To protect consumers from misleading claims and false advertisements.

4.         To protect consumers against the adverse effects of consuming harmful and dangerous goods e.g. drugs, foods etc.

5.         To ensure that producers adhere to standard quality of goods and to prevent consumers from consuming substandard and inferior goods

6.         To prevent consumers from being cheated by the use of false, incorrect and deceptive weights and measures.

7.         To stamp out profiteering and exploitation of consumers by businessmen fixing artificial and arbitrary high prices.

8.         To ensure regular supply of essential goods and services

9.         To assist consumers in making right choices

METHODS OF CONSUMER PROTECTION

or

WAYS BY WHICH CONSUMERS CAN BE PROTECTED

1.         By legislations

2.         Through government agencies/organizations

3.         By independent organizations

A.         By Legislations: Many laws have been enacted by the government to protect consumers against unsatisfactory goods and unfair practices by producers and sellers.

The following are some of such laws:

1.         Sale of Goods Act 1893

2.         Food and Drugs Act 1974

3.         Hire Purchase Act 1975

4.         Trade Description Act 1968

5.         Misrepresentation Act 1968

6.         Consumer Credit Act 1974

7.         Price control Act 1970/Price Control Edicts

8.         Supply of Goods (Implied Items) Act 1973

9.         Fair Trading Act 1973

10.       Weights and Measures Act 1963

11.       Usury Laws

12.       Rent Tribunal Act

EVALUATION QUESTIONS

1.         What is Consumerism?

2.         Give five reasons why consumers need protection

1.         Sale of Goods Act 1893: This law protects the consumer from buying defective goods and goods that do not conform with the description and sample advertised. It makes it possible for the cash price to be reclaimed by the buyer if goods are found to be faulty

2.         Food and Drugs Act 1974: This law protects the consumer from buying goods (Foods, Drinks, Drugs) not fit for human consumption

3.         Hire Purchase Act 1975: This law is designed to protect the consumer who buys goods on hire purchase basis from being cheated or exploited by the seller

4.         Trade Description Act 1968: This law safeguards consumers against

a.         False claims about description of goods with regard to quantity, size, composition method place and date of manufacture, strength, behaviour and fitness

b.         False comparison between the price currently being charged and the price charged previously

5.         Misrepresentation Act 1968: This law protects the consumer from

misleading advertisement, sales handbills, posters etc

6.         Consumer Credit Act 1974: This law protect consumers from being exploited in hire purchase deferred payment and other credit transactions.

7.         Price Control Act (Decree): This law pegs the selling prices of some goods. It is aimed at checking arbitrary increase by manufacturers and middlemen. It also protects the consumer from paying very high or exorbitant prices for certain products.

8.         Supply of Goods (Implied Items) Acts 1973: This Acts puts an end to misleading guarantees. By the law, this responsibility for the condition of goods rests on the retailer. The buyer can therefore look for immediate redress if the goods are unsatisfactory or develop early faults. The law also protect the consumer against failure to honour guarantee and warranties/satisfaction.

9.         Fair Trading Act 1973: This law protects the consumer against unfair business practices by helping consumers to know their rights through the publication of leaflets, sanctioning (punishing) traders who commit offences or ignore their obligations to customers

10.       Weights and Measures Act: This law requires  that

a.         Suppliers of goods should state the weight or volume of their items

b.         There should be no shortages in both weight and measure of goods sold as claimed by the producer

c.          The seller (producer should inform the buyer of the unit of measures used i.e. whether it is the metric system (e.g. gm) or the imperial system (e. g. pounds)

11.       Usury Laws: This law tends to peg the rate of interest that may be charged on loans and advances. For example there is a limit on the interest rate that banks can charge on overdrafts or loans given to their customers

EVALUATION QUESTIONS

1.         List five legislations aimed at consumer protection

2.         State three provisions of each of the following Acts

            a.         Food and Drugs Act (1974)

            b.         Hire Purchase Act (1975)

GENERAL EVALUATION/REVISION QUESTIONS

 1      State five features of a partnership business

 2      List five uses of land as a factor of production

•   Explain five means by which consumers can be protected
•   State three provisions of the Weight and Measures Act

 5      Explain five benefits that would be derived and five losses that would be suffered

         when a sole trader admits other partners

READING ASSIGNMENT

Essential Commerce for SSS by O. A. Longe Page 127 – 131

WEEKEND ASSIGNMENT

1.         Which of the laws of consumer protection fixes the rate of interest that may be charged on loans (a) Food and Drugs Act (b) Price Control Decree (c) Usury Law (d) Sale of Goods Act

2.         Which of the following protects consumers from being mislead by unclear advertisement (a) Food and Drugs Act (B) Trade Description Act (c) Price Control Act (d) Weights and Measures Act

3.         Which is the law that protects consumers (a) Companies Act (b) Partnership Deed (c) Rent Tribunals (d) Sale of Goods Act

4.         Which is not a legislation aimed at protecting the consumer (a) Food and Drugs Act (b) Consumer Association Act (c) Hire Purchase Act (d) Sale of Goods Act

5.         Which of the following makes it an offence for a trader to make untrue statements about his goods (a) Consumerism (b) Consumer Credit (c) Trade Description Act (d) Price Control Act

THEORY

1.         State three means by which consumers can be protected

2.         State five laws aimed at protecting consumers

CONTENT

• Organs of consumer protection
  • Government agencies
  • Independent organizations
• Rights of the consumers
• Consumer Associations

GOVERNMENT AGENCIES/ORGANS

This comprises agencies that protect and educate consumers. They include:

1.         Standard Organization of Nigeria (SON): This is an agency set up by the Federal Government to ensure that goods produced at home or imported goods meet certain standards in terms of quality, safety, reliability etc.

2.         National Agency for food and Drugs Administration and Control (NAFDAC): This agency was also set up by the Federal Government to ensure that foods and drugs meet safety hygiene requirements.

3.         Price Control Boards: These boards were established by the government to control the prices of goods. They ensure that certain goods are sold at government controlled prices (PPMB)

4.         Rent Tribunals: These are set up by some state government to regulate the rents charged by landlords; prevent unnecessary exploitation of the tenants and to settle disputes regarding to rent between landlords and their tenants.

5.         Environmental Protection Agencies e.g. FEPA; LASEPA, KAI etc: These are government task force on environmental sanitation and they regulate the supply of water, refuse disposal, industrial wastes, issues etc.

INDEPENDENT ORGANIZATIONS:

There are a number of private independent organizations (non government organizations) which seek to protect consumers. These organizations therefore complement government efforts in this regard. They include:

            1.         Trade Associations

            2.         Manufacturers/Producers Associations

            3.         Consumers Associations

            4.         The Mass Media

            5.         Educational Institutions

            6.         Consumer Co-operative Societies

            7.         Pressure groups

EVALUATION

1.         Mention four government agencies whose activities are related to consumer protection.

2.         Give five examples of independent organizations involved with consumer protection.

RIGHTS OF THE CONSUMER

The consumer has the right to:

a.         Buy the right quality of goods

b.         Inspect the goods before buying

c.          Insists on getting values for money spent

d.         Choose the good he like

e.         Insist on correct measures

f.          Insist on correct balances (change) whenever he pays for goods

g.         Be informed

h.         Be heard

i.          Safety of goods bought

j.          Seek redress to correct any injustice

k.         Healthy environment

CONSUMER ASSOCIATIONS

These are non-profit associations formed by consumers to protect their rights and interests. Examples are Tenants

Associations, Retails Co-operative Societies etc.

AIMS AND OBJECTIVES OF CONSUMER ASSOCIATIONS

1.         To act as a check against exploitation of consumers

2.         To educate consumers about their rights

3.         To check arbitrary increases in prices of goods

4.         To promote and protect the interest of consumers

5.         To pressurize the producers to produce high quality goods and services

6.         To ensure regular supply of goods

FUNCTIONS OF CONSUMER  ASSOCIATIONS

1.         They advise the consumer on the best brands of goods to buy

2.         They are involved in setting standards of products and services that are acceptable to consumers

3.         They act as pressure groups to influence government policies/company policies

4.         They organize tests to prove the quality of different goods available in the market

5.         They protect the interest of their members

EVALUATION QUESTIONS

1.         List three right of the consumer

2.         What is a consumer association

GENERAL EVALUATION/REVISION QUESTIONS

1         Explain five functions of the Customs Authority.

2         List and explain six new trends in retailing.

3         Expain four advantages and three disadvantages of air transportation.

4         State five functions of consumer associations.

5         Explain five factors affecting the choice of transport of frozen products.

READING ASSIGNMENT

Essential Commerce by O. A . Longe Page 127 – 135

WEEKEND ASSIGNMENT

1.         Which of the following is not the right of the consumer according to the Consumer Education and Protection Council. The right to (a) Be informed (b) Choose (c) Healthy environment (d) Save money on food and drugs

2.         The greatest weapon of the buyer against the activities of false advertisers is (a) Consumer education (b) Manufacturer’s education (c) Marketing education (d) Producer’s education

3.         The body charged with the responsibility of monitoring the quality of goods supplied is the (a) Consumer’s association (b) Manufacturer’s association (c) Ministry of Health (d) Nigerian Standards Organization

4.         Standard Organization Act and Factory Ships and Offices Act are meant to give protection to (a) Wholesalers and retailers (b) Manufacturers only (c) Consumers and employees (d) Employees  only

5.         Which is the law that protects consumers? (a) Manufacturers’ Association (b) Partnership Deed (c) Rent Tribunal (d) Sale of Goods Act

THEORY

1.         List two objectives of forming consumers’ associations.

2.         List three rights of the consumer