Thursday, March 18, 2010

How Care-free Attitude is Source of Consumer Woes

Speak no evil, How unquestioning attitude of Tanzania consumers is source of shoddy services
By Sharifa Kalokola

When Nicodemus Masanji, 50, discovered that he had bought a fake pesticide for his crops, he felt hopeless. For weeks, he watched helplessly as his once fertile three-acre cotton field in Geita District was reduced to worthless grassland.

“I don’t understand what really happened because it was the same pesticide that I have been using for years, except that this time it worked against me,” says Masanji. A month before he bought the pesticide at a local dealership last year, he had a promising cotton yield.

But all was gone in a flash. “The pesticide was fake, but there was nothing I could do about it,” notes the former farmer, who is now selling second hand clothes and Chinese sandals he orders from Kariakoo.

Masanji is disillusioned with the process of seeking recourse against the trader for the losses he incurred. Like the majority of Tanzanian consumers, he sees his case as something “that happens”. He argues: “Even if I were to complain, who would listen to me? Going to court will waste your time and money.”

A recent study conducted by the Tanzania Consumer Advocacy society (TCAS) shows that over 90 per cent of Tanzanians are not aware of their consumer rights.

The majority of the victims cited in the study did not know they had the legal right to demand compensation for market abuses.

And according to the study that was conducted in five regions - Kilimanjaro, Dar es Salaam, Coast, Arusha and Mwanza – most of the affected are women.

“Many people do not know when their consumer rights are violated, and the few who seem to understand do not file complaints against their service providers with relevant authorities,” Bernard Kihiyo the Executive Director of TCAS says.

The study is part of a baseline survey aimed at assessing the extent of the problem, he adds, noting that there are plans to establish a non-governmental organisation to protect consumers from shoddy services, as well as fake and risky products.

Uncritical “We have a lot of work to do to convince local consumers to know their rights, and seek recourse with relevant authorities when their rights have been violated,” he says.

Generally, the idea of complaining against shoddy services or when one discovers that they have bought a fake or dangerous product is not common among local consumers.

“A lot of people tend to be uncritical when it comes to what kind of service or product they get from a supplier,” says Kihiyo. The problem is rampant in the hospitality sector, where most hotels tend to take advantage of ‘uncomplaining customers’ to get away with shoddy services.

“It begins with the belief among too many people that they are at the mercy of providers of services – ironically, here the supplier is given the status of benefactor, or a boss who is supposed to be feared,” observes Andrew Chove, a Dar es Salaam hotel manager.

Several cases of people who are hospitalised after consuming toxic foods or buying fake or expired drugs remain with the victims.

In January this year, over 40 people from two families were admitted to Maweni hospital in Kigoma Region after eating poisoned food. They told the police that they started feeling unwell after having ‘ugali’ for lunch.

Both families had earlier bought maize flour from the same shop. The incident brought back memories of the tragedy that struck Kagunga Village in the same region 10 years ago when 10 people died after eating ugali prepared from poisonous cassava flour. ‘Talking to deaf ears’

There are more similar cases that go unreported. Ms Blandina Ilas, a chef with a Dar es Salaam hotel, says she is still recovering from the side effects of a prescribed malaria drug she bought from a local hospital pharmacy but was not told it contained sulphur, which she is allergic to.

“What I fail to understand is that I bought this from a pharmacy in the same hospital that I had been admitted, and these people could not read the prescription or medical report to see what allergies I have,” says the 32-year-old.

However, she didn’t report the case or file a complaint, even after she was readmitted to the same institution and paid extra costs.

“I don’t believe complaining would have changed much because in most cases you will be talking to deaf ears, and they usually do nothing,” she says.

But consumer rights group, TCAS, says the problem is not simply with providers of services. “When a case is presented to us we fight for the consumer, but we have noted that people don’t complain even in worst-case situations,” notes Mr Kihiyo.

In addition, the TCAS boss blames widespread complacency among Tanzanian consumers on socialism.

According to him, nobody would dare complain against shoddy services during the era of socialism because the government was the sole supplier and distributors of most goods and services.

“Everything was under state control, and it was inconceivable for an ordinary person to complain against a government service provider; apparently, the majority Tanzanians are yet to shed this culture in this free market economy.”

But Dr Semboja Haji, an economic researcher at the University of Dar es Salaam, does not see it that way. He blames the complacency on lack of competition in several sectors. “The problem of consumers fearing to speak out and demanding their rights is not just in Tanzania, but also in many poor nations,” he says, adding:

“We still have fewer service providers in many areas compared to the high number of consumers, who are mostly uneducated.” Corroborating, Dr Fortunatus Sunghwa, a laboratory scientist who lived in Japan for two years, says in the developed world where competition is high “the consumer’s voice is heard.”

“The services there are almost perfect, except that sometimes you encounter long queues on two open counters instead of, say, five available.” A programme officer with TCAS, Jehovaness Zacharia, attributes the “see no evil, say no evil” attitude among most local consumers to their “quest for cheap products and services.”

“Most people want to buy the cheapest thing they can lay their hands on, and at the end it doesn’t come that cheap,” she notes. However, she says the consumer body will use this year’s World Consumer Rights Day tomorrow (March 15), to highlight the rights of consumers; lobby support for those rights to be respected and protected and provides a forum for exposing the market abuses and social
injustices, which undermine those rights.

“This year, our theme is: 'Our Money, Our Rights', and the message we want people to get is that they have both the right to go for cheaper items and to bring up any form of market abuse that undermines their rights,” she says.

Consumer Rights Directive might not feature UK right to reject, says Reding

OUT-LAW News, 15/03/2010
The European Commissioner's consumer law chief has promised a 'breakthrough' on plans for a new Europe-wide consumer law but has said that existing UK rights cannot be safeguarded.

The Commission's proposed Consumer Rights Directive faced opposition in the UK because the process of harmonising law across the EU actually reduced UK consumers' rights to reject goods.

Vivian Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship, who is responsible for consumer law, said that she plans to resurrect the Directive.

"This legislation needs to be the cornerstone for consumer protection in the Single Market in the coming years," she said. "It is therefore my priority to work with the European Parliament and Member State governments to make a breakthrough on this important legislation. The proposed law must balance businesses' need for legal certainty with a guarantee for the highest level of consumer protection."

eding said that while she would address the problem of an erosion of consumer rights in some countries, such as the UK, it may not be possible to protect existing rights, and that the remedies for defective goods that UK consumers are guaranteed might not form a part of an eventual EU-wide law.

"The relationship between the consumer remedies and the national contract law remedies is not always clear," she said. "In the UK, there is a right to reject a product. In France, consumers can have a guarantee for hidden defects in a product. These are typical examples. I do not yet know whether the prospect of achieving full harmonisation of all the remedies for defective products is realistic."

"Full harmonisation of these cross-border rights means that EU countries may have to adjust some national rules that go further than the proposal," she said. "This has led to concerns among Member States, consumer organisations and European Parliament members that the level of protection would decline and that consumers would be worse off. There are also concerns that full harmonisation makes consumer protection inflexible and curtails the national legislators' ability to react quickly and appropriately to new market developments."

"These are legitimate concerns, and I will address them. In my view, consistently basing the proposal on the most stringent rules that already exist in the 27 Member States is not necessarily the most proportionate way to help consumers," she said.
Reding said that one way to address the complex issues would be to introduce two-tier regulation, differentiating between different kinds of consumer sales.

"I am … going to look at whether the harmonisation in the Commission's 2008 proposal is sufficiently targeted towards those issues that have the most benefit from a Single Market point of view," she said. "A possibility could be to go for fully harmonised rules on distance contracts and allow diverging national rules for face-to-face contracts. Workable fully harmonised rules for the online world could then pave the way for more harmonisation for off-line contracts at a later stage."

The Directive which Reding wants to put back on the political negotiating table was controversial in the UK and is still opposed by UK consumer rights body Consumer Focus.

"Hopefully it won’t progress in anything like its current form," Lola Bello, senior policy advocate at Consumer Focus, said last month. "Along with other nations with strong consumer rights, the UK has been lobbying hard for changes to this Directive."

Government legal reform bodies the Law Commission and the Scottish Law Commission were asked to examine the issue last year and advised the Government to oppose the abolition of the right to reject.

UK Market Abuse “Unacceptably High”, Says Financial Watchdog Chief

Jennifer Thompson
Hector Sants, chief executive of the Financial Services Authority (FSA), has said that market abuse in the financial services sector is at an “unacceptably high level.”

Although he said that there was no evidence abuse was worse in the UK than in other major financial centres, he called for more action in tackling the problems of insider dealing and other examples of malpractice.

"Our benchmark should seek to have a market that participants really believe to be clean and fair," Mr Sants told the Sunday Telegraph. "I think that if you were to ask the market participants, they would share my view that there is too much market abuse," the former investment banker added.

The FSA is set to increase its workforce with an extra 460 members of staff, taking the total number to 3,700. The increase in employees, whose roles are expected to be elaborated on in an FSA strategy paper later this week, underlines the more proactive role the organization wishes to play in regulating the UK financial services industry.

Last week it announced the successful prosecution of a former employee at stockbroker Cazenove who was found guilty of insider dealing. An investment banker and his wife were today charged with insider dealing with the FSA currently seeking the extradition of a third suspect in the French overseas territory of Mayotte.

Source; - - United Kingdom

Thursday, March 11, 2010

Know Your Consumer Rights: 10 Top Tips

Posted by Ally Seleman Goronya
The following are 10 top tips when shopping
1. Not my style: You might be surprised to learn that, if you buy something in a shop, you do not have the right to a refund if you later decide you do not like it.

2. Six month rule: It’s worth being aware that if you make a claim for the repair or replacement of faulty goods within six months of purchasing them, it is actually up to the retailer to prove the item was not faulty when it was originally sold to you.

3. No receipt required: Contrary to popular belief, you do not actually need a receipt to obtain a refund for faulty goods. What you are likely to need is proof of purchase – but a bank statement, cheque stub or credit card slip should be sufficient.

4. Online is fine: If you buy goods over the internet, you have the right to a seven-day ‘cooling off period’ from the date they are received. You can send your items back in return for a full refund, no matter why you have rejected them – and even if it’s because you have simply changed your mind.

5. Returning items to a retailer: When you buy something, your ‘contract’ is always with the retailer, not the manufacturer. Therefore, you should always take a faulty item back to the shop where you originally purchased it.

6. Fit for purpose: Any goods you buy from a retailer should be fit for purpose and of satisfactory quality. If they are not, you are legally entitled to claim for a refund, repair or replacement.
7. Act quickly: If your goods are faulty and you wish to claim a full refund, you must return them to the retailer within a reasonable period of time.

8. Smarter sales shopping: You are not entitled to a refund on sale goods if you were made aware by the retailer that the goods were faulty or if the fault you are concerned about was obvious at the time of purchase. Also, if you decide you no longer like the goods, you are not entitled to a refund.

9. Nearly new: If you buy ‘nearly new’ second hand items, your rights to a refund, repair or replacement are similar to those you would have for new goods. However, the law will not expect second hand goods to be of the same quality as brand new ones.

10. Stick up for your rights: If a retailer is failing to acknowledge or respond to your consumer rights and you live in England or Wales, you can file a claim against with the small claims court (provided your claim is for under £5,000).

Source; rights guides

It's National Consumer Protection Week in USA

March 7-13 is National Consumer Protection Week (NCPW) 2010. It's a week the government will devote to providing free resources and information to better inform consumers how and where to spend their money.

President Obama's "Presidential Proclamation" in a March 5 White House Press Release explained that NCPW "gives all Americans an opportunity to become better-informed consumers."

From the president's proclamation:
"I call upon government officials, industry leaders, and consumer advocates across our Nation to share information about consumer protection; and I encourage all Americans to learn more about marketing and business, whether they are shopping at their local store or in the global online marketplace."

Obama said his administration is committed to protecting American consumers. Because of that, he signed into law the CARD Act, which went into effect last month, and he also recently established the President's Advisory Council on Financial Capability, "which is looking for new ways to help individuals make informed financial decisions," according to the press release.


Despite online purchases accounting for 10% of total retail sales, UK consumers are unaware of their right to return goods, a government survey shows. Consumers are unaware of additional online shopping rights.
UK consumers may be the biggest online shoppers in Europe, but we are less inclined to return goods bought via the internet than those purchased on the high street, research reveals today.

A survey for the government found that more than 60% of shoppers were less likely to take back goods purchased online, compared with items purchased direct from shops.

Tellingly, consumers also showed their ignorance and confusion about their legal rights for both types of purchase when it comes to refunds. Many did not realise, for example, that those buying online had the extra right of a seven-day cooling-off period.

UK consumers are ranked as Europe's biggest online shoppers, having spent £38bn last year, which accounts for 10% of total UK retail sales.
The research was carried out by the Department for Business, Innovation and Skills for a Know Your Rights campaign run by the government-funded Consumer Direct.

It found that three-quarters (77%) of UK consumers did not know there were differences between online and high street consumer rights, while more than one in 10 (13%) admitted to not being sure of their consumer rights when making online purchases.

The consumer minister, Kevin Brennan, said: "It is important we all know that most online goods can be returned with no questions asked within seven days. We want confident consumers who can assert their rights and get a good deal."

The survey revealed that consumers were just as confused when shopping on the high street. Two-fifths thought that retailers always had a right to refuse a refund if they didn't have a receipt, and one in 10 believed goods could not be returned once they have left the store.

Michele Shambrook, operations manager for Consumer Direct, said: "We want consumers to be more confident when shopping on the high street or online. People who are knowledgeable about their rights are more likely to get a fair deal, save money and resolve problems when things go wrong."

Consumer rights: top tips
1. If you buy goods on the internet you have the same rights as if you were shopping on the high street. In addition, you have the right to a seven-day cooling-off period from the date you receive the goods, with the right to a full refund regardless of the reason for return. However, this doesn't apply in some situations, for example if the goods were personalised for you, were perishable, or are not in the same condition as when they were delivered.

2. When you buy goods your contract is with the retailer not the manufacturer, and you should always go back to the retailer in the first instance to request an exchange or refund. If you have a manufacturer's warranty you can contact them as well as the retailer. And don't delay – act as soon as you discover the fault.

3. You do not need a receipt to obtain a refund for faulty goods. However, you may be required to show proof of purchase with a credit card slip or bank or credit card statement.

4. Although you do not have the legal right to take back goods bought on the high street just because you have changed your mind, many stores do offer a "no questions asked" refund or exchange policy. Check the store policy when you buy.



By Harry Wallop, Consumer Affairs Editor
Published: 7:30AM GMT 10 Mar 2010
Online banking fraud has doubled in the last two years, with customers losing £60 million from criminals last year. Official figures from the trade body UK Payments Association indicated that online banking fraud increased to £59.7 million last year. This was an 18 per cent increase on the year before and more than a doubling since 2007 when there were £22.6 million of losses.

As more and more consumers are persuaded to go online by their banks, criminals have followed them. Most of the fraud has happened by criminals – usually based overseas – attacking consumers' computers without their knowledge.

The most common technique is for criminals to install malware into a consumers' computer – a piece of software that can sense a users' keystrokes. This means that a criminal, despite sitting on the other side of the world, can tell the password and account number of an online bank account that a customer is typing in.

Malware is installed invariably without the consumers' knowledge when they click on a link to a website or an attachment to an email.
Graham Cluley, a leading expert on internet fraud at Sophos, a security firm, said: "Every day we see 50,000 new pieces of malware from around the world coming into our labs. The criminals are always creating new, ever more sophisticated ways of attacking people's computers."

The figures were published alongside data indicating that credit card fraud fell significantly last year, thanks to chip and pin technology and more secure retail websites. The padlock system and "verified by Visa" scheme, which requires shoppers to tap in a password when paying for items on a website, helped overall card fraud fall from £610 million to £440 million.

Despite the fall, this still equates to £10 for every adult in the country. The UK Payments Association said it remained concerned about the increase in online banking fraud. As bank branches close, banks are persuading consumers to opt for online banking, which costs less for the banks to operate. The number of customers that use online bank accounts has increased from 15 million in 2005 to 22 million last year.

David Cooper, chairman of the fraud control steering group, the payment industry’s leading fraud prevention group, said: "The industry remains committed to containing and reducing all areas of fraud. To this end, we will continue our partnership approach – working with law enforcement, retailers, consumers and the Home Office – to tackle fraud head-on.”