O Level Revision : Commerce - Consumer Protection

Consumer Protection                                         

The government intervenes in the economy to ensure that there is fairness and justice in trade.  Legislation is enacted to protect the traders and consumers from unfair business practices.

Reasons for consumer protection

My wife and I deposited

$100 for a 4-plate stove with a local shop. The stove was to be delivered within seven days. However, this was not done. My wife went back to check and was given a date on which a refund was to be made, only to be told later that there would be no refund, and instead  we  would  have to choose something else worth $100. We did not want anything else but the stove. Please help. Harare

I  deposited  a  bed  on lay-by with the balance stretching over three months. The suite was then  put  aside  for  me and it had my name tag on it. When I went in to pay  the  last  instalment I   was   asked   to   pay an additional $40.00 because prices had gone up. Is this fair?

Harare

I recently bought a car from a second hand shop for $3 000. My problem is that the police have come to collect my car because  they  allege  it is stolen property.   The shop manager from whom  I  bought  it  said he cannot refund me since he was not aware of the circumstances surrounding the car. Where do I stand?

Marondera

A few examples of consumer exploitation

1. Unfair practices to maximise profits

• Use misleading advertisements like “Eat Beef and Become King”.
• Sell inferior quality goods and services.
• Charge exorbitant prices.

2. Sell of products that endanger health or life

• Consumers are unaware of the difficulties or dangers of goods and services
• offered.
• Harmful ingredients such as those used in skin lightening creams e.g. Ambi.
• Goods with expiry shelf-life and are unfit for consumption.
• Expiry dates should be inserted on goods.
• Toys with toxicity, i.e. harmful for children
• Shoddy electrical appliances.

3. Religion and beliefs of consumers

• Some religious groups abstain from beef, game or pork products.
• Firms should   label the contents clearly to enable consumers to choose the appropriate products.

4. Ignorance of consumer rights

• -Consumers might be unaware of their rights.
• Consumers  should:  be  refunded  for  shoddy  goods;  be  compensated    for shortfalls on weight and measures; receive replacements on faulty items within the guarantee period; get accurate change in money form and not in kind.

Ways to protect consumers

1. The Government protects the consumer by enforcing:

1. a) Safety

All household goods must meet the standards of safety. Unsafe goods e.g. uncoated electrical appliances, lead content pencils may not be sold.

1. b) Weights and Measures

Correct quantities must be marked on packets. Shop seals and any other forms for measuring must meet the laid standards.

1. c) Food and Health

Food  should  precisely  show  production,  consumption  and  expiry  dates; ingredients and storage guidelines. The premises should be clean and hygienic.

1. d) Price Control

Retail prices are marked on basic, essential goods offered for sale.

2. Trade Associations

Producers, wholesalers and retailers form trade associations to discuss and resolve challenges in their sectors. Trade associations:

• promote standards of quality of consumer goods and services
• maintain high standards of advertising and trade practice
• have their goods described and labelled
• test the goods for quality
• take legal action against offenders
• use distinguishable seals of approval on their goods e.g. Standards Association of Zimbabwe (SAZ).

3. The Consumer Council of Zimbabwe (CCZ)

It  is  a  public  consumer  association.  The  organisation  is  government  assisted, sponsored by private organisations and the public. The CCZ:

• resolves conflicts between traders and consumers: conflicts on purchased faulty goods and services; the trader refuses to replace or repair the item; the item is shoddy, substandard or fails to perform to the satisfaction of the customer
• keeps watch on prices of goods and services
• advises consumers of current price trends
• ensures that advertisements are truthful, decent and ethical
• ensures descriptions ,contents and labels are accurate and specific
• informs and advises the public on rights of the tenants, landlords, traders
• conducts surveys on current issues of concern and advises all concerned
• investigates complaints, anomalies and recommends  corrective action

Multiple choice questions

1. Which protects the consumer against pressure of advertising? (i)  The government

(ii) The business associations

(iii) The consumer associations

1. (i)  B.   (i) and (ii)
2. (i) and (iii)  D.   (i), (ii) and (iii)
3. The Consumer Council of Zimbabwe is a
4. private company.  B.   public company.
5. parastatal.  D.   partnership.
6. Consumers need protection against

(i)    misinformation. (ii)  shoddy goods.

(iii) random price increases.

1. (i)  B.   (ii)
2. (iii)  D.   (i), (ii) and (iii)

4. Who should initiate the consumers’ protection?

(i)   Voluntary organisations

(ii) The government through legislation

(iii) Individual consumers by being cautious when buying

1. (i) and (ii)  B.   (i) and (iii)
2. (ii) and (iii)  D.   (i), (ii) and (iii)
3. The Consumer  Council of Zimbabwe
4. replaces faulty items.  B.   advertises their goods and services.
5. controls the prices of goods.  D.   is a government assisted organisation.
6. The Consumer Council of Zimbabwe

(i)   educates the consumers on insurance contracts.

(ii) publishes consumer reports on electronic and print media. (iii) reduces the prices of basic goods.

1. (i)  B.   (i) and (ii)
2. (i) and (iii)  D.   (i), (ii) and (iii)

Essay questions

1. Explain the roles of Consumer Councils.
2. Why do consumers need protection?
3. Explain the functions of trade associations.