FTC on alert for false claims made by herbal medicine retailers

Herbal medicine retailers are coming under close scrutiny from the Fair Trading Commission (FTC) which is warning they could face fines as high as $100,000 or time behind bars for breaching local consumer protection laws.

Director of Consumer Protection at the Fair Trading Commission (FTC) Dava Leslie-Ward said on Thursday that a decision to keep a close eye on those types of businesses was made after the FTC’s attention was recently drawn to certain claims being made about the efficacy of their products.

She told Barbados TODAY that while the state-run agency does not currently have reason to take punitive action against these retail stores or entities, it has seen the need to try to protect consumers from potentially misleading or false claims.

Leslie-Ward said prosecution is among the options at the disposal of the FTC.

“It really depends on the particular situation that is before us, but the legislation gives us a wide range of options that we can take.

“This breach that we were speaking about, which would be false advertising, that would fall under Sections 12 and 13 of the Consumer Protection Act. If you then go to Section 26, then that sets out that a person who contravenes any requirement or prohibition contained in any provision of Section 12 to 24 is guilty of an offence,” she explained.

An individual who is found guilty of an offence under the Act is liable to a fine of $10,000 or to imprisonment for a term of two years, or both; while in the case of an entity, a fine of $100,000 could be imposed.

Where a body corporate is convicted of an offence, any director or officer who knowingly authorised, permitted or acquiesced in the act or omission that also constituted the crime is guilty of an offence and is liable on summary conviction of a fine of $25,000 or imprisonment for two years, or both.

However, Leslie-Ward explained that in recent times, the FTC has traditionally enforced the legislation by way of a document known as an undertaking.

“We actually create a plan for the company concerned to comply with the legislation. There are certain actions that they have to take, and then there are timelines in which they have to respond to the commission,” she said.

The FTC official added that the nature of the undertaking depended on the offence and the level of behavioural change necessary.

“Obviously, if you have consistently breached the legislation and you have a false advertisement, the action that we take with you might be different from some person who has done it for the first time,” she explained.

“If we have made efforts to try to resolve a situation and we find no change…we need to ensure that there is a transformation, a change in behaviour…. Well, they are supposed to offer us the undertaking, our board will review, sign off on it. In the event that the company fails to follow the undertaking, we can take it to court and have the court enforce it,” the Director of Consumer Protection added.

She said this approach has been used by the commission at least four times and it has been successful.

“Companies typically follow the undertaking because they don’t want to go to court…. Once there is an undertaking, we do publicise it and we try to make sure that the companies follow exactly what it is,” she said, pointing to Cost-U-Less as one such company.

“For example, we may require your board to report directly to the commission because we recognise that that change of behaviour may have to happen at the board level and filtered down. So, we take it very seriously and these are things that we monitor.”

She said the FTC sometimes even requested the minutes of the board meeting showing that the matter was actually on the agenda.

“That is the length that we will go to, to make sure that you are doing what you are saying you are going to do, because we want that change,” Leslie-Ward said.

She recalled that when the COVID-19 pandemic first hit Barbados in March 2020, the FTC became aware of certain products being advertised as a cure for the virus.

“What we would have done in those circumstances was to speak to the persons who were responsible for those advertisements and indicated to them that unless you can prove the claims you are making in relation to that product, you cannot advertise in that way, otherwise that would amount to false advertising as stipulated in the Consumer Protection Act,” she said.

Leslie-Ward said one business immediately withdrew its ad. Another company also pulled its message, although not as quickly as the FTC would have liked.

“What we would have asked that particular business to do was to issue a public apology,” Leslie-Ward added.

The senior FTC official pointed out, however, that even before taking any type of action, the commission tries to educate businesses.

She said it held a sensitisation session at the end of March.

“We would have reached out to all of the persons that we could have found or persons that we were familiar with and did a sensitisation programme on the types of ads that they should readily be advised upon under our Consumer Protection Act, and we warned against making claims that could not be substantiated,” Leslie-Ward said.

She said the programme was “very well” attended by the businesses and the response was “very good.”

“Coming out of that, obviously, we are going to continue to monitor the situation. But if we, in our monitoring, determine that there has been a breach or that there is a potential breach, we will be looking into those claims and we will be taking the appropriate action,” she warned.
emmanueljoseph@barbadostoday.bb