CHAPTER ONE

BACKGROUND TO THE STUDY

“The consumer, in order to protect himself against the unscrupulous, must be armed with knowledge.”^[1]

INTRODUCTION

The deeply rooted maxim of caveat emptor^[2]no longer applies strictly to consumer transactions as it has been whittled down by decisions of the court.^[3] On the contrary, it is the seller who must be cautious and ensure that goods and services provided meet up with the reasonable standards required by law.^[4]

The saying, “Consumer is King”, is commonly used across the world to signify the upper-hand consumers have in determining the overall success or failure of any product or service. This also means that goods and services should be satisfactorily tailored to meet the needs of the consumer. As a result, rights accrue to consumers which they can enforce through civil actions in the event of breach or violation of those rights. These consumer rights are further enforced through laws promulgated by the National Assembly and such laws are enforced by government agencies.^[5] Their joint efforts are aimed at furthering the protection of consumer’s

interests.

In Nigeria, a plethora of laws exist for the purpose of protecting consumer rights. Nevertheless, most Nigerian consumers aren’t able to receive adequate remedy for injuries suffered due to manufacturer’s products or services. Therefore, it may be concluded that the profusion of legal framework is not reflected in the protection afforded to consumers. Although recent efforts have been made by consumer protection agencies^[6] to strengthen the enforcement of consumer rights and promotion of their interests, Nigerian consumers are still deemed to be weaker than manufacturers/producers. The current paradigm calls for a balance of the competing interests of both sides. 

                              According to Scott Maynes, consumers are ill-served majorly due to lack of

information.^[7] This, coupled with the lack of awareness and the literacy levels amongst majority of the Nigerian populace, serves to fetter the enforcement of consumer rights. In Nigeria, the literacy rate as at December 2013 was placed at 61.3%.^[8] This means that nearly half of the people in Nigeria are illiterate. There even exists unawareness of consumer rights amongst the educated class. As a result, most consumers are unable to successfully assert their rights and are exploited by service providers. The need for an efficient consumer protection mechanism is further necessitated by modern technological advancements, deceptive advertising, marketing techniques and the advent of globalisation.

Others factors hampering the rights of consumers include: overlapping functions of consumer protection agencies and difficulties faced in enforcing civil rights. Nigeria, being a proconsumer state with a population of about 170 million people⁹, must take steps to ensure that its people have smooth recourse to remedies for breach of their rights. The protection and advancement of consumer interests have therefore become a major concern to the government.

This study will examine the existing legal/statutory framework for consumer protection in Nigeria with a view to proffering the need for reforms, if any. It will also make recommendations as regards possible legal and non-legal redress mechanisms for consumers.

1.1       CONCEPT OF CONSUMER PROTECTION

The industrial age witnessed the creation of machines and more sophisticated devices. The development of rail transport coupled with widening markets resulted in consumers having diminished rights and privileges in relation to the quality of products and prices of goods and services. The English common law principles of negligence were first used and subsequently, legislation protecting consumers came into being. The Factories Act of 1802¹⁰ and the Factory and Workshop Act of 1895¹¹ in England, are good examples. Today, consumer protection legislation has developed to cover a broader spectrum. Modern consumer protection legislation covers goods, services, labelling, packaging, components and materials used which are likely to cause injury and/or detriment to the consumer. In the 18^th century, Adam Smith¹² pointed out that interests of the consumer were usually “sacrificed” for those of the producer. He further submitted that since consumption is the sole purpose of production, consumer rights must be

⁹ As at December 2013, World Bank Report, available at http://www.worldbank.org/en/country/nigeria, accessed on July 22, 2014. 

¹⁰42 Geo. III c.73. The Act was established by the Parliament of the United Kingdom to regulate factory conditions especially in relation to child workers in cotton mills.

¹¹1 Edw. 7 c.37. This Act regulated the safety, health conditions and wages of individuals working in factories.

¹² Adam Smith, Wealth of Nations (1910).

considered over that of manufacturers. The practice of placing consumer’s rights second to those of producers continued for quite some time in that era. However, there has been a paradigm shift in recent times which has seen strict duties imposed on manufacturers, sellers, brand owners, producers and other persons in the supply chain. The 20^th century was marked by the prevalence of consumers who play an important role in determining the overall success or failure of a product or service. 

Generally speaking, consumer protection refers to that body of law that serves to protect buyers against unscrupulous activities of sellers. It refers to the provision of effective mechanisms to protect the pecuniary, health, safety and security interests of all legal persons against misleading, fraudulent and harmful business practices, including manufacturing, trading, packaging, advertising, distributing and selling of products/goods and services to the ultimate consumer.^[9]

In a broader sense, it governs the liability of not only manufacturers of goods and services, but also retailers, wholesalers, and other suppliers of goods and services to persons who use or consume them.^[10]

  Closely related to this is the concept of Consumerism. The term consumerism has been used in different disciplines to mean different things. It may be defined as a programme to promote consumer interest including protection of the environment and restraints on abuse by businesses^[11]. Definitions by experts in the field also exist. According to Philip Kotler, consumerism is a social movement that seeks to augment the rights of buyers in relation to sellers.^[12] Maynes submitted that consumerism represents the voice of consumer dissatisfaction along with avenues for remedial actions.^[13]

It is evident that the nature and extent of consumer protection regulation in a modern society is a reflection of its socio-economic values. Various factors influence and determine the stage a country’s consumer protection framework has reached. These include the quantum of information available to the consumers; the extent to which the available consumer protection legislation is efficacious; the degree of consumer education available for the general public; awareness of the masses to consumer related issues and rights; and governmental agencies involvement in consumer issues.

Experts such as Kaynak posit that consumerism is likened to a social movement which goes through its own growth process or life cycle.^[14] This means that the concept of consumer protection in any given state may go through its own consumerism life cycle – just like a human being would. He outlined four integral stages of the life cycle. These are: crystallisation, organization, institutionalization, and conceptualization. It may be concluded that Nigeria is currently at the crystallization stage because of the lack of organised consumer related activities. Majority of the recent consumer related actions have been carried out by the CPC or non-governmental consumer protection groups. From the foregoing, it may be concluded that consumerism is a social movement aimed at protecting consumers.

The need for consumer protection in recent times is more apparent and has been highlighted by the accelerated establishment of consumer protection legislation in developing countries like Malaysia, Sri Lanka and Thailand.^[15] Amongst other factors, industrialisation has resulted in more sophisticated products being created and distributed across the globe. Modern day consumer protection laws must be broad based and dynamic enough to safeguard against the increased risks that consumers are exposed to. Studies have shown that consumer dissatisfaction is prevalent where sellers are reluctant to resolve justified consumer grievances and government fails to stand up to defend the interests of buyers^[16][17]. Consumers must also be protected from trade malpractice. Unfair dealings in the marketplace include but are not limited to misleading advertising, unjust dales promotions and unfair exclusion clauses.

In Nigeria, Consumer Protection is regulated by a plethora of legislations. These include the

Standard Organisation of Nigeria (SON) Act^[18], the Foods and Drugs Act^[19], the Consumer

Protection Council (CPC) Act^[20], the National Agency for Food and Drug Administration and Control (NAFDAC) Act^[21], the Nigerian Communications Act^[22] and the Utilities Charges Commission Act^[23]amongst others. This paper will focus on the CPC, NAFDAC and SON Acts.

References may however be made to other laws, regulations and legislations subsequently.

1.1.1 WHO IS A CONSUMER?

Like most terminologies, there is no universally accepted or absolute definition of the term

“consumer”. A consumer may be defined as one who uses goods made by another.^[24] A consumer may also be described as an individual who purchases, uses, maintains and disposes of products and services.^[25] According to Ralph Nader, a “consumer” should be equated with a

“citizen” to ensure that consumer rights are regarded as a civic right.^[26] This submission is however flawed by the fact that it is not definition (or legislation) that gives rise to rights. Rather, it is the existence of rights that give rise to legislation. Some consumer protection statutes limit the scope of persons that qualify as consumers by stipulating that the supplier acts in the course of a trade or business and that the buyer is a private individual who acts in a private capacity.^[27] It is pertinent not to restrict the meaning of the term to “contracting parties”,

as employing such a definition may preclude an ultimate user of goods and services.^[28]

Leon Schiffman and Leslie Kanuk, in defining the term, distinguished between personal and organizational consumers. They posit that a personal consumer is an individual who purchases goods and/or services for their own use as an end user while an organizational consumer is an institution that acquires goods and services to further the objectives of their organisation.^[29]Modern developments in law have imposed stricter duties on suppliers of goods and services. Suppliers are therefore bestowed with an increased level of obligations to strangers including those not perceived to be the final users of such products. As such, the traditional concept of a ‘consumer’ has been expanded. Today, private individuals who enjoy the services of a non-profit or non-commercial institution might also be described as consumers.^[30] Statutory definitions of the term exist in various legislations both foreign^[31] and domestic. In Nigeria, the Consumer Protection Council (CPC) Act defines a consumer as an individual who purchases, uses, maintains or disposes of product or services.^[32] The definition above restricts such protection to “individuals” i.e. natural persons only. This poses a problem for juristic persons (such as corporations, partnerships and businesses) who purchase goods for business purposes. Such persons will not be able to enforce their consumer rights under the Act. It is pertinent that the legal framework regarding the classes of person entitled to consumer rights is expanded to cover the unprotected class. Also, Section 2 of the Consumer Contracts

(Regulation of Unfair Terms) Bill, 2010, of Nigeria^[33] defines a “consumer” as a natural person who, in making a contract to which the Act applies, is acting for purposes which are outside his business.^[34] This definition creates the same problem stated above in relation to the class of persons it covers i.e. ‘non-natural’ persons such as companies and organisations are not covered.

Under the South-African Consumer Protection Act,^[35] however, the definition of a consumer successfully covers all juristic persons. Under this Act, a consumer is defined as a person to whom those particular goods or services are marketed in the ordinary course of the supplier’s business, or a franchise.^[36] The use of the word ‘person’ implies that a consumer is any juristic person, not just an individual. It is surprising that the recently passed^[37] Consumer Protection Agency Law of Lagos State^[38] does not define the term as the statute could have defined the term and also expanded its scope to include all juristic persons.

1.1.2 RIGHTS OF A CONSUMER

A right can be defined as a power, privilege or immunity guaranteed under a constitution, statute or decisional laws, or claimed as a result of long usage.^[39] Various categories of rights exist. These include but are not limited to Fundamental Human Rights; Proprietary Rights; Contractual Rights; Social Rights; Collective Rights; and Political Rights. A particular right may fall into more than one category. This paper however, focuses on Consumer Rights which can be deemed to be a more recent development in the corpus of existing rights. In March 1962, President John Fitzgerald Kennedy, whilst delivering a speech to the United States Congress, stressed the need for consumer rights to be protected. He outlined certain rights which he believed must be accorded to consumers. These include: the right to safe products and information about such products, the right to choose and the right to be heard.^[40]

International statutory frameworks also provide for the existence of consumer rights. For example, the United Nation Guidelines on Consumer Protection which provides for consumer’s

right to:

1.      safety and protection from hazards;

2.      information;

3.      consumer education;

4.      effective redress mechanisms;

5.      freedom to form relevant consumer groups and organisations; and

6.      sustainable consumption patterns.^[41]

Chapter IV of the Constitution of the Federal Republic of Nigeria, 1999^[42], (hereinafter referred to as the “Constitution”) does not directly make mention of ‘consumer rights’. Nevertheless, this does not mean consumer rights do not exist in Nigeria.^[43] The Consumer Protection Council (CPC) Act of Nigeria provides for certain consumer rights similar to those listed above but also includes the right to a healthy environment.^[44] The various consumer rights will be discussed below.

a. Right to Safety

This right connotes that the general public should be protected from goods and services that are harmful to their person or property. For example, food products must be fit for consumption. As a result, manufacturers have a duty to include best-before dates on labels of goods. In Nigeria, the CPC, in the first quarter of 2014, initiated a “Best-before Date”

Campaign to stop indiscriminate storing of goods which may undermine the quality of products available for consumers.^[45] The need for such labels is important as to ensuring that customers are aware of the content of goods. This will be discussed more under the Right to Information. The extent to which a consumer may exercise his right is dependent on the disclosure made by manufacturers and service providers. This may be in the form of precautionary measures to be taken by the consumer or the level of risk they are exposed to. Such information should be communicated to consumers effectively.  For example, dangerous goods (such as toys for children) usually have clear warning/cautions signs on the packaging stating the possible hazards or age restrictions.

b. Right to Information

Consumers have a right to know exactly what they are purchasing. Thus, salient information regarding characteristics of the product, ingredients used in its production and its origin must be communicated to the consumer. This right imposes on the producer/manufacturer the duty of Mandatory Labelling. Labelling is required to give the consumer access to information relating to the composition and contents of goods. In Nigeria, regulations created under the National Agency for Food and Drug Administration and Control (NAFDAC) Act^[46] impose a duty of manufacturers to include nutritional information on labels of products.^[47] These regulations are flaunted continuously leaving consumers open to health hazards due to lack of information. For example, under the Bottled Water (Labelling) Regulations, manufacturers are required to declare the net content of the water in a metric system of measurement.^[48] The penalty for failure to do so is a fine of N50,000 (Fifty Thousand Naira) along with other forms of sanctions as the Agency (NAFDAC) may deem fit.^[49] If a person who reacts to high sulphur in water is not put on notice of the high sulphur content in a particular brand of bottled water, such a person may suffer damage to their health. 

c. Right to Consumer Education

This generally means that consumers are to be enlightened on their rights, privileges and duties.^[50] The major reason for this is not farfetched. A consumer who is aware of his rights is in a better position to take steps to enforcing them. As such, this is a crucial aspect of consumer protection as it largely determines the extent to which consumer protection will be vibrant in any given state. “Consumer Education” simply refers to the process of enlightening people about their rights and duties thereby enabling them to maximize opportunities when buying or using goods and services.^[51] As mentioned in previous parts of this research paper, lack of awareness of consumer rights is one of the major causes of poor protection for consumers. This will be expanded upon in subsequent chapters of this paper.

d. Right to Redress

There must be effective legal mechanism put in place to help consumers enforce their rights where a breach occurs. Government agencies are usually vested with the power to help aggrieved consumers claim remedies form erring manufacturers. Similar actions for redress are carried out by non-governmental organisations and trade unions saddled with the mandate to aid affected consumers in obtaining reliefs through litigation, negotiation and similar means.

e. Right to Form Consumer Organisations

As stated above, various organisations are established for the sole purpose of helping aggrieved consumers obtain remedies in the event of violation of their consumer rights. Thus, consumers must also be given the right to assemble and form groups and organisations aimed at protecting their economic interests.^[52] Examples of Non-governmental consumer organisations in Nigeria are the Consumer Organisation of Nigeria (CON); Consumer Protection Organisation of

Nigeria (CPON); Consumer Awareness Organisation (CAO); and Consumer Rights

Association of Nigeria (CRAN). International bodies also exist for this purpose. They include the Consumer International^[53] (CI) and the European Union (EU).

f. Right to Sustainable Consumption Patterns

Sustainable consumption patterns can be defined as consumption practices that do not jeopardise the environment or threaten the health of consumers at large. Manufacturers must ensure that their processes, products or services do not pose a danger to the environment as this may have long term effects and inadvertently rob the ‘countless unborn’^[54] of their interests. Government may also require manufacturers to publish certain information regarding their activities which may pose a threat to consumers. Consumer protection legislation must aim to accommodate all the consumer rights mentioned above. 

1.2       OBJECTIVES OF THE STUDY

The purpose of this paper is to:

1.      Examine the existing legal framework for consumer protection in Nigeria and determine its impact along with the efficacy of the functions of the Government in protecting consumers; and

2.      Uncover reasons why consumers are deemed to be insufficiently protected notwithstanding the existence of various governmental agencies established for that purpose.  

In furtherance of this objective, the legal framework for consumer protection will be examined so as to make necessary recommendations.

1.2.1 SCOPE AND LIMITATIONS OF THE PROJECT

This project will cover consumer protection statutes in force since the establishment of the CPC Act and thus, will be limited to a period of 1992-2012. It will also highlight judgments given by Nigerian courts from 1920-2014 and other relevant decisions of foreign courts that date as far back as 1914.

In view of this, it would be impracticable to assume that all necessary facts have been gathered in the process of the study. The information gathered and resources utilized are limited to those accessed and made available with the aid of local newspapers, magazines, journals and annual reports of the Consumer Protection Council (CPC), Standard Organisation of Nigeria (SON), the National Agency for Food and Drug Administration and Control (NAFDAC) and other relevant sources from the internet. However, the effect of this limitation will be reduced to the barest minimum.

1.2.2 SIGNIFICANCE OF THE PROJECT

This project is noteworthy as it helps to empower and educate consumers on their rights thereby allowing them to make informed decisions regarding how best to enforce their rights and the necessary procedures in doing so.

It also strives to emphasise the need for manufacturers and sellers to ensure that goods and services meet up with (and even exceed) the standards required by consumers. The findings of this project will immensely affect the way consumers are viewed in Nigeria by the courts, manufacturers and the Government. It will pave the way for future development in our legal system and serve as an avenue for promoting efficient trade practices in the country.

1.3 METHODOLOGY

The methodology to be employed in carrying out this study is mainly doctrinal and essentially literary based. This research will utilise both primary and secondary sources of information; gathered from textbooks, journals and articles (both online and published), dictionaries, paper presentations, public documents, statutes, etc.  It is from an examination of these sources that the writer would address the questions generated by this project.

The project will be divided into four chapters. Chapter one will introduce the concept of consumer protection, consumerism and also examine definitions of the term “consumer” in a bid to understand who qualifies as a consumer. Definitions of the term under various legal systems will be compared in order to arrive at the most efficient approach. Chapter two will explore and interrogate the existing legal framework for consumer protection in Nigeria and assess the impact of the regulatory agencies established under these laws. Furthermore, the prevalent demerits of the current system such as the duplicity and overlap of functions of the regulators - which slows down the remedial process - will be examined. Chapter three will explore civil law avenues for enforcement of consumer rights. This chapter will highlight the age-long forms of civil enforcement of consumer rights under the law of tort and contract law and also scrutinise the approach of Nigerian courts to consumer related disputes. These issues will be appraised in order to understand the extent to which these legal mechanisms have played a role in the current state of consumer protection in the Country.

Finally, the conclusions in Chapter four will address the significance of the application of the findings presented in the previous chapters. Recommendations will be made which, in the opinion of the author, will possibly improve the attitude of the people to consumer rights; change the approach of the courts towards consumer-manufacturer disputes; and enhance the way government agencies carry out their functions with regard to safeguarding the interests of consumers. 

1.4 CONCLUSION 

This project will show that the defunct state of consumer protection in Nigeria is not due to the non-existence of legal framework governing this area of law. Rather, it is due to the nonenforcement of the existing laws amongst other reasons. The CPC has recently taken steps to strengthen the protection given to consumers and ward off any form of manufacturer ineptitude.

These exploits, however, are not sufficient to cure the declining malaise. As such, the Government must espouse policies, laws and regulations that are aboriginal and specifically woven to fit the idiosyncrasies of the average Nigerian citizen. In Nigeria, a pro-consumer state, consumer must, in as much as possible, be king.

Buyers has the right to create dispute within seven (7) days of purchase for 100% refund request when you experience issue with the file received. 

Dispute can only be created when you receive a corrupt file, a wrong file or irregularities in the table of contents and content of the file you received. 

ProjectShelve.com shall either provide the appropriate file within 48hrs or send refund excluding your bank transaction charges. Term and Conditions are applied.

Buyers are expected to confirm that the material you are paying for is available on our website ProjectShelve.com and you have selected the right material, you have also gone through the preliminary pages and it interests you before payment. DO NOT MAKE BANK PAYMENT IF YOUR TOPIC IS NOT ON THE WEBSITE.

In case of payment for a material not available on ProjectShelve.com, the management of ProjectShelve.com has the right to keep your money until you send a topic that is available on our website within 48 hours.

You cannot change topic after receiving material of the topic you ordered and paid for.