World Consumer Day: ‘Our Money Our Rights’

Is the consumer the king?

Today the consumer is celebrating World Consumer Day, organised by Consumer International, to show power and strength by flexing muscles of worldwide consumer organisations. People say the consumer is powerful and he is the king and kingmaker. Traders say the consumer is always right.

It may be so in other parts of the world, but not necessarily in Sri Lanka. The consumer in Sri Lanka is expected to be protected by the Consumer Affairs Authority and the Regulatory bodies.

Consumer Affairs Act No. 09 of 2003 was replaced by the Consumer Protection Act No. 01 of 1979, Fair Trading Act No. 01 of1987 and Control of Prices Act (Chapter 173) and other legislation connected to these instruments. This brought about drastic changes for consumerism by transforming the concept of price control to the practice of control of consumer items by regulatory procedure.

Consumerism

Consumerism is consumer activism, also refers to the consumerist movement, consumer protection or consumer activism. Consumerism is a social and economic order based on fostering a desire to purchase goods and services in ever greater amounts.

In the UK consumerism is strengthened through citizen advisory bureaus, law centres, legal aid activists managed by solicitors and through group and class actions. In the UAE Government there is effective machinery supported by consumer societies.

New Consumer Law is often modified in Russian Federation for the consumers. China is concentrating on quality and interests of consumers. Dubai with 118 nationals imposes strict regulations implemented by the Government.

In California Legal Remedies Act protects the consumer. Australia, Canada and New Zealand there are CABs and the Western model of protection of consumers. Consumer Protection Act (COPR) in India provides enormous power and protection for Public Interest Litigation.

Kennedy said that consumers are the largest economic group in the country affecting and affected by most public and private economic decisions. But they were also the only important group who are not effectively organised, whose views were not heard. Today the Consumer Movement in the USA is active and powerful.



The theme this year

The theme this year, ‘Our Money; Our Rights,’ is a timely current and opportune topic. The world recently got over the major world financial tsunami crisis when Sri Lanka went through minor tsunamis due to our careful regulatory powers of the banking institutions. The banking system in Sri Lanka and South Asia should be credited for withstanding the financial crisis worldwide when the world economy was crumbling and in shatters due to mismanagement.

The main financial regulator in Sri Lanka is the Central Bank, which is the main regulatory authority on finance. The other regulatory and connected institutions on consumerism are the Public Utilities Commission, Telecommunication Regulatory Authority, Financial Ombudsman, Insurance Ombudsman as regulators and Trade Mark Ordinance, Poison, Opium and Dangerous Drugs Ordinance, Control of Prices Ordinance, Food and Drugs Act, Food Control Act, Licensing of Traders Act, Bureau of Ceylon Standards Act, National Prices Commission Law, Code of International Properties Act, Petroleum Products Act, Food Act, Cosmetic Devices Act, Sri Lanka Standards Institution Act, Fair Trading Commission Act, Measurement Unit Standards and Services Act in addition to the Main Consumer Regulator Consumer Affairs Authority.

Does your money really belong to you?

It is doubtful whether your money really belongs to you because it is controlled and managed by other institutions for you. Unfortunately the world banking system is such that one cannot individually manage the funds without the help of the banking and financial institutions. Therefore it is the duty of the Government to establish a mechanism for the protection of the consumers who have entrusted the responsibility of their funds to financial institutions.

The Central Bank, banks and financial institutions, private as well as State institutions manage our money for which their accountability to the investors is less or none. The world financial crisis was due to the fraudulent conduct and mismanagement of financial institutions in the USA and UK and the West to which the entire world had to pay a high price.

In the West the housing market on which the money market depended collapsed as a result of over inflating the property markets. Nations were used to live on loans and credit cards. Some are nations of debtors living on debts on no shame or hesitation unlike Asians who are reluctant to live under the roof of mortgage property. They tend to lead a simple life with their own money instead of enjoying comforts on borrowed money.

World financial crisis

It is presently a peaceful life with no encumbrances and without debts. In the modern world debt has become a part of life like breadth. In Sri Lankan society it has not been the case before. Currently with the advancement of life, living conditions have changed, living has increased and life has become complicated and sophisticated.

It is difficult to live within one’s means because there are attractions and offers for unlimited desires. Desire of a human being is unlimited. It has become more unlimited with current developments and advancement of IT and technology. There are offers for loans, credit cards and also investment, entertainment, holidays and spending sprees, local and outside.

Ways of enjoyment have become open and unlimited with the advancement of communication. There are complaints all over the world that the cost of living is increasing day by day.

Cost of living, the living cost of an individual for a family unit, is computed systematically and technically through various gauges and measures. But in simple terms it is expenditure of an individual of a family in relation to income.

It is obvious that one has to live within one’s means, if not he or she has to look for credit. Credit can be obtained either on personal basis or through banks. Banks are ever ready to grant loans to customers and customers provided it is recoverable and profitable to them. They would want to help themselves, not customers or consumers.

The price of any consumer item is not static. The price of a loaf of bread 30 years ago is not the same with the income and the salary. We escaped the crisis because we are traditionalists and careful in dealing with money.

Our banks were cautious and strictly adhered to rules. Sri Lanka in that context is fortunate because the bankers in Sri Lanka were careful though the citizens were led by fraudulent financiers. It is very sad that leading financial institutions collected large sums of funds from the people on trust and mismanaged, leaving investors in the dark. Had there been a proper regulatory scheme in Sri Lanka, we would have avoided large scale mismanagement of funds by Sakvithi and colleagues.

Rs. 26 billion unregulated funds over 26 years amongst others

This is a very serious statement and a warning signal for the future. The Central Bank is a reserve bank of the State with exclusive privileges to lend the Government its currency, lender of last resort and the main financial regulator.

The European Central Bank and Federal Reserve System in USA manage respective finances. Sri Lanka’s Central Bank is managed based on the management of the Bank of England as the main regulator of the finance of the nation. It implements and maintains a fiscal policy of the nation. This shows the need for financial management by the State and the conduct of the financial services and supervision. This also indicates the importance of consumerism and the need to organise themselves.

Consumer

The CAA Act defines the consumer as any actual or potential user of any goods or services made available for a consideration by any trader or manufacturer. This gives a very broad definition of the consumer, which includes the potential user and services.

Services also gives a broader meaning which includes banking, financing, insurance, shipping, entertainment, construction, production, manufacture, transportation, provisions of information technology and professional services.

The act gives powers to the Consumer Affairs Authority to regulate traders, industries, businesses and professions by way of regulatory powers which authorises the authority to undertake studies, issue directions, inquire into complaints, enter into agreements and take remedial steps for non-compliances.

The main objects of the authority are to protect consumers against making of goods or provision of services which are hazardous to life and property, to protect consumers against unfair trade practices, to provide adequate access to goods and services and to seek redress against unfair trade practices.

To perform these duties the authorities are entrusted with various powers. But the main theme and the expectation of the act is to encourage the consumer to organise themselves in the promotion of better standards on consumerism. In the process the Consumer Affairs Authority is expected to promote, assist and encourage the establishment of consumer organisations and to promote consumer education with regard to good health, safety and security of consumers amongst other functions.

Trader, manufacturer and industrialist

They are part and parcel of the process of consumerism with the consumer. The manufacturer is one who makes articles or any goods, assembles or joins any articles or goods and adopts for sale any articles or any goods. The trader is one who sells or supplies goods, wholesale or retail, import goods and provides services for a consideration.

The Consumer Affairs Authority should regulate and supervise to be the consumer items and services of high quality and standard. The authority should maintain equilibrium among these stakeholders by regulating and also advising, organising and directing them to perform their respective duties. At the same time the consumer should be alert and careful.

On the other hand the other parties should be fair and reasonable. The trade practices and unfair competition are matters that are within the purview of the regulators to take appropriate steps.

Cost of living and simple life

Society is infested with credit card culture. It is unfortunate that Sri Lanka too the credit card culture has infested society. One can observe people carrying a number of credit cards so that they are free to purchase and spend.

The banks and companies offering credit cards have agents to attract customers. They are victims and targets amongst others are Government servants and monthly wage earners who are entitled to use the credit cards. They happily use the credit cards for a few months and once they receive the bills with the interest, it may be too late for them to make adjustments.

Cost of living is the cost of maintaining a certain standard of living. Employment contracts, personal benefits and Government entitlement can be tied to a cost of living index. In Sri Lanka where the majority of citizens are living in 15,000 villages spread across the length and breadth of the country, computation is adjusted differently.

The village has been self-sufficient previously which is now day by day urbanising due to modern developments. Attempts are being made now to prevent the flow of citizens towards townships by improving villages and providing facilities such as electricity, water, road network and infrastructure. There are 650 ‘Nenasalas’ countrywide to provide Information Technology and to have access to the centre.

The prices of food items and the other consumer items are the main burden to the citizens. The best and the only method of challenging the cost of living is a simple contended life. When needs are less, life is simple. Need of consumer items will also be less.

A simple life is healthy and less stressful. Simple does not mean being stingy. Greed for excess money and wealth breeds contempt and sorrow. The happiest people on the planet are the Bhutanese who are used to a simple life with few needs, yet happy and leading a full life without modern and sophisticated lifestyles which is harmful to the body.

To beat the cost of living, the best way is to be simple and go simple. The consumer should know when to buy, where to buy, what to buy and how to buy. In the UK consumer items purchased and forgotten in the fridges amounted to billions of pounds. Currently the income of a family is improved as a result of industrial and agriculture developments. Family members are employed and contribute to the family budget. The prices of vegetables and fruits fluctuate. During rainy season prices go up but currently it is low.

Telecommunication and mobile phone

Telecommunication is fast improving with the majority of the population possessing mobile and land phones. The major expenditure of a family today is for the mobile phone and tuition fees. When the price of bread goes up by Rs. 5, there is lot of commotion but when the price of the telephone bill goes up by Rs. 50, there is no resistance.

It indicates the happiness, satisfaction and the modern way of life, meeting the challenges in current developments. Therefore, cost of living in relative terms can be controlled by controlling the way of life.

Consumer organisations

It is time for consumers to organise themselves and form consumer societies. It is the duty of the Consumer Affairs Authority to facilitate and encourage the forming of consumer societies. There were attempts made previously to form a Computer Federation, which is not functioning at the moment.

There were also attempts made for a Consumer Charter, which is on the hold. There were also consumer pages published previously in all three languages weekly which are not being published.

I think it is time for the parties concerned to reactivate the good work initiated and to continue it with new vigour and strength for a better society and a healthy generation with the help of consumerism, bonding together with goodwill and understanding of the consumer, industrialists, trader, Consumer Affairs Authority and the Government.



(The writer – LL.M (London) Solicitor and Attorney-at-Law – is Sri Lanka’s Ambassador to the United Arab Emirates and former Chairman of the Consumer Affairs Authority. He can be reached via [email protected].)