Consumer protection in The Bahamas
BY PHILIP C. GALANIS
An educated consumer is our best customer. – Sy Syms
In the 1980s, in an effort to educate TV viewers, clothier Sy Syms frequently reminded his audience that, “An educated consumer is our best customer.” He was a pioneer in consumer education and empowerment and persons like consumer advocate Ralph Nader were also well known for protecting the average consumer.
This week, we would like to Consider This... do we have a progressive consumer protection environment in The Bahamas?
Consumer protection laws
Consumer protection is often provided by laws and organizations that are designed to ensure consumers’ rights and to foster fair trade competition and the free flow of truthful information in the marketplace.
Consumer protection laws are designed to prevent businesses from engaging in fraudulent or unfair practices that would enable them to gain an unfair advantage over competitors or to mislead consumers. Governments often use consumer protection laws to regulate businesses from such practices or to protect the rights of consumers. For example, the United Kingdom has several statutes to protect consumers in specific areas of consumer credit and contract terms. The Australian Competition and Consumer Commission, along with individual state consumer affairs agencies, are responsible for consumer protection. Germany has a federal Cabinet minister who is responsible for consumer rights and protection. In India, the Consumer Protection Act of 1986 governs consumer protection. The Bahamas Parliament passed a Consumer Protection Act of 2006 which is intended to provide consumers who are disadvantaged by exorbitant prices, substandard products and the unscrupulous practices of merchants and service providers with a forum to have their complaints addressed on a timely basis by a consumer protection commission. The law requires merchants and service providers to be more accountable and ensures that in their dealings with consumers, value is exchanged for goods and services provided.
The Bahamian experience
Today there are many areas where consumer protection can be greatly enhanced in The Bahamas. For example, in the area of commercial banking, we are familiar with the practice of some banks overcharging their customers for various “services” of which consumers are unaware until they are referred to the fine print in the bank mandates – a document that 99.9 percent of consumers fail to read or understand when opening bank accounts. In some circumstances, when called out, commercial banks have had to reverse such charges. Unless the vigilant consumer closely scrutinizes his bank statement, he could end up paying excessive charges that are neither substantiated nor justified.
Then there is the famous “float”. Notwithstanding the introduction of an automatic check clearing system, it is commonplace for commercial banks to hastily withdraw funds from customers’ accounts, while simultaneously placing a “hold” on deposited funds for several days. The consequence is that this practice puts the customer’s account into overdraft, resulting in bank charges of as much as $25 for having “insufficient funds” on the account because the deposited funds were still “on hold”. Unfortunately there is absolutely no one to whom the consumer can turn for relief from this practice, not even the Central Bank.
Then there are well-known cases where many consumers have experienced enormous encounters with essential service providers, especially in the areas of telephony and electricity. Since our telephone company, BaTelCo, was “given away” by an incompetent government on the ill-conceived advice of equally incompetent advisors, the delivery of quality service by that public corporation has drastically deteriorated. Prior to that ill-fated sale of one of our most precious national assets, BaTelCo was managed by Bahamians and, while there were intermittent complaints about the delivery of quality of service, the experience of the “new and unimproved” BTC is now nothing short of cataclysmic. It is virtually impossible to complete a cellular call without that call dropping off the network. And never before in the history of telephony in The Bahamas have landline consumers experienced such difficulty in placing simple local calls or obtaining timely service when experiencing problems. To whom can the consumer turn for protection? The theoretical answer is URCA, but the practical answer is “not a soul”. There is no penalty, no protection and no compensation.
In the past two years, in the wake of the historically worst-managed capital project in the life of our Commonwealth, namely the New Providence Road Improvement Project, we have repeatedly experienced electrical blackouts, ostensibly from road workers who accidently and inadvertently cut power lines while trenching our roads. This has resulted in thousands of man-hours in lost productivity in a myriad of businesses and incalculable inconvenience to individuals and households. From whom can consumers so affected seek redress for the lost hours of work, the damage to appliances and the general disruption of life resulting from such “accidents”? In truth and in fact, the answer is “no one”. There is no consumer protection.
Cable TV and Internet service might not quite qualify as essential services, although some might argue to the contrary, but we are all familiar with the repeated disruptions that many consumers experience from Cable Bahamas. Again, it is very difficult to expect any real satisfaction for such disruptions from the agency that is supposed to protect consumers from abuses by the cable company. URCA, which does little to compensate consumers from telephone company abuses, performs an equally deplorable job in protecting cable TV and Internet consumers from poor service.
Then we have regulated products such as food and fuel. There are certain foods that are price-controlled at our food stores. The real question that an educated consumer should ask is whether the Price Control Commission methodically monitors foods that are subjected to price control. It is extremely rare that we hear of food stores being sanctioned for pricing breaches by the Price Control Commission. Is this because the food stores are virtually compliant or have they been able to circumvent the price control regime? It is not an exceptional experience for consumers to observe vastly different prices on various food items. Is this also the case with respect to price-controlled items?
The price of fuel is also regulated and importers and end-service providers are allowed to earn pre-determined margins. Who monitors the pricing behavior of service providers to ensure that the consumer is not being gouged at the fuel pump? We do not frequently, if ever, hear of any violations of the established margins by fuel merchants or of any penalties imposed for attendant breaches.
Finally, the Bahamian consumer needs protection relative to local food production and distribution. In the absence of any sanitary and phytosanitary standards relative to the production of food, plants and vegetables, the all-important question of food safety will remain elusive at best and questionable at worst. One of the benefits of the country’s accession to the World Trade Organization (WTO) is that such standards must be established. However, until those standards relative to food, plant and vegetable production, harvesting and distribution are implemented and enforced, consumers will never know just how safe the food is that they are consuming.
It is vitally important for all Bahamians to be educated and vigilant about our rights as consumers and to whom we can turn for abuses or violations to be redressed. Until we become educated consumers, we will not be good customers. Instead, we will indeterminately wander and wallow in the quagmire of ignorance and abuse. We must no longer put up with things we should not even tolerate for a moment. We must become empowered to not only stop those abuses for ourselves but end them for each and every Bahamian consumer.
• Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to: email@example.com
April 15, 2013