FTC REPORT POINTS TO “UNCHARACTERISTIC” HIKE IN FRAUD DURING COVID-19 PANDEMIC
By Marlon Madden
The Fair Trading Commission (FTC) has revealed that during the height of the COVID-19 pandemic, there was an “uncharacteristic increase” in scams, and it opened several investigations into the practices of some companies based on consumer complaints.
The regulator, in its recently released annual report for the period ending March 2021, said while some issues were resolved, others were ongoing.
The FTC said that during the period under review, it observed “an uncharacteristic increase in the number of scams which may be contrary to Part III of the Consumer Protection Act”, which deals with unfair trade practices.
“Concerned consumers alerted the Commission about advertisements which promoted medical cures and/or effective treatments for the COVID-19 virus,” said the FTC which recalled that cease-and-desist letters as well as a press release condemning the claims were issued.
The report noted that the FTC’s social media monitoring also uncovered “a number of potential consumer protection breaches”.
These included medical health claims that advertised there were cures for COVID-19; work-from-home scams that were disguised as legitimate job offers for persons to work remotely from their home but were actually concealed attempts to steal a consumer’s money; pyramid schemes or scams to acquire personal financial information from consumers by offering them large sums of money; and social media complaints about pricing transparency within the new food delivery sector.
There were also curbside pickup and transparency pricing issues, as well as data usage and internet challenges, said the FTC.
It noted that “the increase of these issues coupled with information provided in meetings with the International Consumer Protection and Enforcement Network (ICPEN) and the CARICOM Competition Commission (CCC), were discussed at length and helped the Commission to realise that a strategic and proactive response to COVID- 19 was required”.
The FTC said that, ultimately, it devised a strong public relations response to address the issues and educational programmes, strong enforcement to the false COVID-19 claims, and a flexible approach to other breaches were also used.
“Therefore, throughout the financial year, various campaigns highlighting consumer protection issues coming out of the pandemic were undertaken in May, September and November 2020,” said the report.
“Furthermore, pertinent information was published on the FTC’s website as necessary. Additionally, a targeted social media outreach programme highlighting relevant consumer protection issues was prepared and deployed throughout the year.”
In relation to the complaints and subsequent investigations into companies’ practices, the annual report identified six allegations during the April 2020 to March 2021 period, most of which were resolved.
“The scope of the matters included potential anti-competitive conduct such as exclusive dealing, business collaboration and anti-competitive agreements. The matters touched several sectors inclusive of banking, accommodation, retail and telecommunications. Four of these allegations were either resolved or dispensed during the financial year; the remainder are under review,” it said.
The regulator also noted in its 2021 annual report that it had planned for other matters during the year but they were either delayed or held in abeyance due to the reprioritisation of tasks in response to the COVID-19 pandemic.
These included a poultry sector study to assess the competitive structure of the local poultry industry as well as the continuation of a study on auto fuels that was launched in July 2019.
The latter was designed to identify vulnerabilities within the markets and explore the relationship between the marketers and dealers in the auto fuels market to determine whether there are activities that are likely to suppress competition.
While an interim report of the consumer survey results was prepared and disseminated, research is still ongoing for both studies.
A total of 2 452 consumers contacted the FTC during the financial year under review. Of those queries/complaints, 1 863 related to the Consumer Protection Act.
“Five hundred and seventy-three calls were directed to the Office of Public Counsel (OPC) since the matters were within the jurisdiction of the OPC and could not be addressed by the FTC. This resulted in a 49 per cent increase in queries and complaints compared to the previous financial year,” said the FTC.
marlonmadden@barbadostoday.bb
