Barbados Today reports that for 2016, there were 766 complaints to the Fair Trading Commission in respect of breaches of the Consumer Guarantees Act (of which five have been resolved) and 2555 queries as it relates to matters outlined in the Consumer Protection Act.
The majority of the complaints were against the utility companies. Interestingly, there were overall increases in the breaches by businesses as it relates to Standard Form Contracts and unfair trade practices by “stores to which unannounced visits were made.”
The FTC declined to name the businesses which have not complied with their directives to remove prohibited signs or to “delete or amend the offending terms” in their standard form contracts. Such information would have been singularly helpful in allowing persons to be aware of what actually constitutes a breach and would be aware of their rights before, rather than after, the fact.
Malcolm Gibbs-Taitt, consumer rights advocate, is reported to have said that “the FTC must shoulder the blame for the increase in breaches [and] that public education was required to correct the issues arising with Standard Form contracts.” He also called for firm action to be taken against offenders advertising in contravention of the Act.
To a large extent, I endorse those sentiments. Part II of the Consumer Protection Act Cap. 326D sets out the law as it relates to unfair contract terms. Generally speaking, suspicion first arises where the term is not negotiated with the particular consumer and even if it is negotiated, an assessment may show that it still forms part of a “pre-formulated standard contract.”
Section 5 puts the burden on the supplier of the services to show that the contract term was individually negotiated. The stage having been set, what precisely constitutes an unfair contract term? Section 8 of the Act states that “A contract term is unfair if, to the detriment of the consumer, it causes a significant imbalance in the rights of the supplier and the consumer.”
The Schedule to the Act sets out specific terms which are to be considered unfair if they have not been individually negotiated. For example, discretionary power of the supplier to dissolve the contract where the same right is not granted to the consumer; retention of large sums where the supplier dissolves the contract and the contractual services have not been supplied; imposition of disproportionate penalties; enabling the supplier to unilaterally alter the nature and terms of the contract; automatically extending the period of a fixed term contract where the consumer has to give too early notice of intention not to extend all run afoul of the legislative provisions.
Commercial banks are usually the worst offenders and of the seventeen terms set out in the schedule, they have habitually run afoul of fourteen of them.
You really would not need to field 2555 queries or 776 complaints with a published list of things to look out for (instead of these scenario type questions that are published under the FTC’s column). For example.
1. Exclusion of liability for personal injury or death.
2. Allowing for the retainer of money paid where the supplier does not perform his end of the bargain.
3. Excessively high penalties where a consumer does not want to complete a contract.
4. Termination of contracts by a supplier without reasonable notice or good grounds.
5. Extending a fixed term contract without any express consent from the consumer.
6. Unilateral changes of contract terms by the supplier.
7. Contracts where the price of goods is to be determined at delivery without a corresponding right of the consumer to cancel if the price is too high.
8. Allowing for the transfer of the supplier’s obligations where it would affect guarantees to the consumer.
9. Excluding or hindering the right of the consumer to take legal action.
10. Prices set only in a currency other than Barbados dollars. Duty-free goods should have dual pricing.
11. Selling second hand goods as new.
12. Promotions offering gifts, prizes etc. where there is no intention of providing the gifts, prizes etc.
13. Credit transactions should have the total sum to be paid, number of instalments, rate of interest and any deposit required (check those car advertisements).
14. Where there is more than one price attached to an item, the consumer is entitled to purchase at the lowest price. Where a price is displayed, the consumer is entitled to purchase at that price whether it is correct or not.
15. Warranties for periods smaller than those specified in the legislation.
16. Telling people that they cannot get a refund, or only store credit.
A few prosecutions of repeat offenders with the corresponding penalties of $10,000 fine and/or two years’ imprisonment would go even further in reducing complaints. This Act is nearly two decades old and surely it must be time for the kid gloves to come off.
(Alicia Archer is an attorney-at-law in private practice)