Advocating Consumer Protection in Nigeria

Introduction

A consumer is an individual who buys products or services for personal use and not for manufacture or resale. Consumer protection can be viewed as the totality of efforts geared at preventing consumer exploitation. Through consumer protection, the government ensures that consumers derive maximum satisfaction from the services available in the market.[1]

Developed countries in America and Europe foster “consumerism” – the efforts of individual consumers to protect themselves from exploitation. This movement forces suppliers to adopt better ways of delivering goods and services without abusing the fundamental human rights of consumers. However, in developing countries like Nigeria, there are no organized consumer movements, leaving the responsibility of consumer protection to the government.[2]

The Nigerian government has promulgated several laws[3] and set up several agencies to protect the rights of consumers – NAFDAC (National Agency for Food and Drug Administration and Control), SON (Standards Organization of Nigeria), NDLEA (National Drug Law Enforcement Agency) and the FCCPC (Federal Competition and Consumer Protection Council). This article dwells on the FCCPC as a beacon for consumer protection in Nigeria.

The Federal Competition and Consumer Protection Act

On 5th February 2019, the President assented to the Federal Competition and Consumer Protection Act (FCCPA). In summary, the purpose of the Act is to remove monopolies and market dominance, alongside protecting the rights of Nigerian consumers. Importantly, the FCCPA repeals the Consumer Protection Council Act.[4] It establishes the FCCPC (Federal Competition and Consumer Protection Commission) which administers the provisions of the Act. It also establishes the Consumer Protection Tribunal to adjudicate over offences and disputes.[5]

The focus of this article is consumer rights under the this Act. There is a lot of writing about the FCCPA, but they are grossly focused on competition – mergers and acquisitions. Perhaps the following exposition will shed needed light. Reference is repeatedly made to the consumer (the person who buys a good or procures a service), the undertaking (the person who supplies the good or service) and the commission.

Consumer Rights under the FCCPA

Information

A consumer has a right to information in plain language.[6] Information is in plain language if an ordinary consumer with average literacy skills can understand the content. Accordingly, an undertaking that displays goods or services for sale must display the price of these goods/services.[7] The implication of this is interesting, especially for online retailers. For example, retailers on Instagram typically display goods on their page and ask willing buyers to send them direct messages to confirm prices.

The Act further provides that an undertaking cannot require a consumer to pay a price for any goods or services higher than the price on display.

Trade descriptions

An undertaking must not mislead consumers as to a trade description.[8] That is, they may not claim that goods have a particular feature when they do not. A supplier even has the responsibility to correct a misunderstanding on the part of a consumer.[9] Importantly, where a consumer agreed to purchase goods because of a description or sample, the goods delivered by the undertaking must correspond to that description or sample.[10]

When an undertaking supplies second-hand goods, they must notify consumers that the goods are second-hand.[11] An undertaking is mandated to provide a receipt[12] to every consumer that is supplied goods/services.[13]

Cancellation and refunds

A consumer has the right to cancel any booking, reservation or order, subject to the payment of a reasonable charge.[14] A consumer has a right to return goods (within a reasonable time after delivery) and receive a full refund in two scenarios[15] – first, when goods are purchased for a particular purpose and it turns out that they are unsuitable. Second, when the consumer did not have an opportunity to examine the goods before delivery and it happens that the delivered goods do not correspond with the description, sample, type and quality that was agreed. The consumer may return goods within three months of delivery.[16]

The same rules apply to services. A consumer has the right to timely and qualitative performance of services.[17] Where an undertaking fails to meet required standards, the consumer is entitled to a remedy or a part refund.

Examination

A consumer has the right to select or reject from the goods on display before paying. A consumer is not responsible for any damage to goods on display unless the damage is a result of carelessness, malice or crime.[18]

Disclaimers

An undertaking is barred from entering into a transaction with prices or terms that are unfair, unreasonable or unjust. An undertaking cannot limit or transfer its risks through a notice to the consumer. That is, an undertaking cannot claim to not be responsible/liable. Ultimately, an undertaking cannot enter into an agreement with terms that defeat the purpose of the Act.[19]

Duties of manufacturers, importers, distributors and suppliers of goods and services

Under the Act, these players have a duty to label goods properly so it can be easily traceable.[20] They have a duty to notify the public of risk as well an obligation to withdraw hazardous goods.[21] Where damage is caused to a consumer by defective goods/services, the undertaking that supplied the goods/services is strictly liable for the damage. A person affected by the defective goods/services has the right to sue.[22]

Enforcing rights

When a consumer seeks to enforce a right under the Act, it may refer the matter to the (defaulting) undertaking, to an industry sector regulator or to the Commission. A consumer may also approach a Court directly.[23]

Where a matter is referred to the Commission, it may issue a notice of non-referral if the matter is groundless. If it has grounds, the Commission may refer the complaint to the industry sector regulator or may direct an inspector to investigate immediately. After receiving the report of the investigator, the Commission may issue a notice of non-referral, make an order[24] or issue a compliance notice.[25]

Ultimately, a wronged consumer has a right of civil action for compensation in a court.[26] Anybody who contravenes any consumer rights is liable to imprisonment for five years or N10,000,000 or both. In the case of a body corporate, it is liable to N100,000,000 or 10% of its turnover whichever is higher. Also, each director is personally liable.[27]

Challenges

Odujirin & Adefulu notes that the FCCPA has many advantages but is not without problems. For instance, some of the powers of the FCCPC are similar to the powers accorded to SON and NAFDAC causing an overlap of function and authority.[28]

Furthermore, Section 3 (2) of the FCCPA states that the Commission shall be an independent body; however the appointment of the Chairman and the Board of Commission is done by the President, subject to confirmation by the Senate.[29] The President also has the power to renew the term of each commissioner[30], and the power to suspend or remove a commissioner where he contravenes the provisions of Section 8 of the Act. The funding of the Commission and the Tribunal also comes from the budgetary allocation and the government of the Federation. There is therefore the tendency for the Commission to be indirectly influenced in carrying out its functions and powers.

Best Practice

In spite of the above, Nigeria seems to have to have gotten it right with regards to our banking sector. The Central Bank of Nigeria (CBN) constitutes a local best practice. The supervisory function of CBN is structured into four departments[31], one of which is the Consumer Protection Department.

The CBN explicitly recognizes that the customer is the most important person in the economy and every business succeeds only when the customer is happy. In Nigeria, customers of banks have certain rights and duties guaranteed by law, regulation and conventions. The CBN website articulates some of these rights and duties. They include the right to be informed,[32] the right to choose,[33] the right to safety,[34] the right to privacy and confidentiality,[35] the right to redress,[36] the right to good service,[37] the right to equality[38] and the right to free monthly statement of account.[39]

The CBN accommodates a Complaints Management System that enables consumers to lodge complaints against regulated financial institutions.[40] In 2011, the CBN issued a circular that directed all banks to expand their existing ATM Help Desk to handle all types of consumer complaints. Subsequently, consumers who have complaints against banks must first report the complaint at the bank/branch where the issue originated and then allow two weeks for the issue to be resolved.

If the bank fails to resolve the complaint within two weeks, the consumer may escalate their complaint to the Consumer Protection Department (CPD). Consumers may contact the CPD via email: [email protected]

Conclusion

The Nigerian lawyer's experience with Consumer Production is often limited to its enshrinement in the Tort of Negligence. The law creates the principle that a manufacturer of a product or service who derives 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. Therefore, a manufacturer in the decided case of Osemebor v. Nigerian Biscuit was held liable for injuries resulting from the presence of a decayed tooth in a biscuit bought by the plaintiff.

This principle of law, like many others, only deals with consumer protection indirectly. It involves a heavy burden of proof that extends to establishing the duty of care as well as the damage suffered. It also includes requirements that shift the focus from consumer rights strictly. Consumer rights are entirely about consumers and their rights to enjoy the best product standards - right to value for money, right to safety, right to information, right to choose, right to redress, right to consumer education and right to representation.

According to the FCCPC website, the commission is the apex consumer protection agency and has been in physical existence since 1999. Perhaps it is time for some maturity.

[1] Omenazu P. (2010) "Consumer Protection in Nigeria" Trifter Online. Date Posted: 30 December 2010. See also, Amzat S.A. (2012) "Impact of Consumer Protection Agencies in Nigeria: A Study of CPC, CAFON and CEON" https://www.bartleby.com/essay/Impact-of-Consumer-Protection-Agencie-in-Nigeria-PKNC8Y43RZYS Date Posted: 27 August 2012.

[2] Olalade Jacob-Obi The Efficacy Of Consumer Protection Laws In The Nigerian Telecommunications Industry (Part One) https://www.mondaq.com/Nigeria/x/709896/Telecommunications+Mobile+Cable+Communications/The+Efficacy+Of+Consumer+Protection+Laws+In+The+Nigerian+Telecommunications+Industry+Part+One

[3] The Standard Organization of Nigeria (SON) Act 1971, The Price Control Act 1977, The Nigerian Communications Commission (NCC) Act, The Nigerian Communications Act (NCA) 2003, The Utilities Charges Commission (UCC) Act, Post and Telecoms Proceedings Act, The Quality of Service Regulation, The Consumer Code Of Practice Regulations, The Nigerian Communications Commission Dispute Resolution Guidelines 2004, National Agency For Food Drugs Administration And Control (NAFDAC) Act, Counterfeit and Fake Drugs and Unwholesome Processed Foods (Miscellaneous Provisions) Act, amongst many others.

[4] Section 165 FCCPA 2019

[5] Section 39(2) FCCPA 2019

[6] Section 114

[7] Section 115. A price is adequately displayed if it is a written indication, expressed in naira, that accompanies the goods or services. It could be published in relation to the goods or services in a catalogue, brochure, newspaper, circular or similar publication available to the consumer, or to the public generally.

[8] Section 116

[9] Section 125

[10] Section 121

[11] Section 117

[12] A written record of each transaction to include address, date, description of goods/services, unit price, quantity, total price, applicable taxes and total price.

[13] Section 118

[14] Section 120

[15] Section 122

[16] Section 132

[17] Section 130

[18] Section 121

[19] Section 129

[20] Section 134

[21] Section 135

[22] Section 136

[23] Section 146

[24] The Commission and the respondent may agree on the terms of the appropriate consent order that may include an awards of damages.

[25] A compliance notice is issued if an undertaking has engaged in prohibited conduct. This notice will contain steps that are required to be taken and the timeframe. Where an undertaking fails to comply with a compliance notice, the Commission may shut down premises, impose fines or refer the matter to a Court.

[26] Section 152

[27] Section 155

[28] For instance, the Act gives the Commission the power to cause quality tests to be conducted on consumer goods, it also has the power to compel manufactures, suppliers, dealers, importers, wholesalers, retailers etc. to certify that all standards are met in their goods and services and give public notice of any health hazards associated with their goods and services.[28]

[29] Section 5(1) FCCPA 2019

[30] Section 5(3) FCCPA 2019

[31] Banking Supervision Department, Financial Policy and Regulation, Other Financial Institutions Supervision Department

[32] As a bank customer, you have a right to disclosure of information from your bank on goods and services the bank offers.

[33] You have a right to select from the range of products and services made available by your bank at competitive prices.

[34] This right requires a bank to guarantee all its customers a secure and conducive banking environment devoid of threats to their safety and health.

[35] As a bank customer, you have the right to freedom from disclosure of your account details by the bank as well as intrusion into your account by third party.

[36] A bank must provide its customers a redress mechanism to express their displeasure or grievance.

[37] All customers have a right to value for their money which involves the right to be treated with respect and dignity by banks and their representatives.

[38] This right requires that a customer is treated equally as other customers regardless of differences in financial standing/deposit balance, physical ability, age, gender, ethnicity, or creed.

[39] The provision of the Revised Guide to Bank Charges is that banks are required to provide their customers free statement of account on a monthly basis.

[40] Including commercial banks, microfinance banks, primary mortgage institutions and discount houses