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Consumer Behaviour - Malaysian Consumer Protection Acts
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Consumer Behaviour - Malaysian Consumer Protection Acts Consumer Behaviour - Malaysian Consumer Protection Acts Document Transcript

  • 1.0 INTRODUCTIONMalaysias economy runs on the basis of free enterprise. Free enterprise would mean that thereare not too much of restriction in the exchange of commerce and industry. However prices ofgoods and services work in the basis of the law of supply and demand. Due to the stiff marketcompetition, sellers these days race for higher profit, unethical business practices andprofiteering. Thus consumers need to be protected from the various tactics devised by traders.By definition, a consumer is someone who acquires goods or services for personal, domestic orhousehold purpose, use or consumption. He does not acquire them for trade, for use inmanufacturing or to be repaired and sold in trade1.During the beginning years of our independence, Malaysias economy was based on agriculture.Those times, consumer welfare therefore focused on providing basic needs such as shelter, food,access to water and sanitation, health and education. The earliest consumer protection law inMalaysia were The Price Control Act 1946 and the Control of Supplies Act 1961. As thegovernment introduced many programs to develop the economy, this changes the consumerdemographics and the increase in the consumption of goods and services.The government went on to establish several acts and statutes to protect consumers such asconsumer protection statutes, enhancing institutional capacity to ensure enforcement ofconsumer protection laws, and acknowledging the importance of the United Nations Guidelinesfor Consumer Protection 1985. The Domestic Trade and Consumer Affairs Ministry wasintroduced in 1990 that first gave the needed boost to consumer protection and welfare inMalaysia. Following this was the launch of National Consumer Policy (NCP) was launched onJuly 26, 2002 to integrate consumer policies with national development policies to improvequality of life.Today Malaysia has a number of regulatory bodies and consumer movement relatedorganizations to ensure consumers are protected in areas such as the right to basic needs, theright to safety, the right to information, the right to choose, the right to representation, the rightto redress, the right to consumer education and the right to a healthy environment. The primemover for consumer protection in Malaysia is under the responsibility of Government - Ministryof Domestic Trade, Cooperatives and Consumerism (www.mdtcc.gov.my) in terms of formingthe legislation to protect consumers, providing consumer education, developing consumerorganizations and research. There are also Consumer organizations like Tribunal for ConsumerClaims Malaysia (Tribunal Tuntutan Pengguna Malaysia), The Communications and MultimediaConsumer Forum of Malaysia (CFM), National Consumer Complaint Centre (Pusat KhidmatAduan Pengguna Nasional) , Malaysian Communication and Multimedia Commission(Suruhanjaya Komunikasi dan Multimedia Malaysia), Consumers Association of Penang (CAP)and Consumer International (CI) to name a few.1 Consumer Protection Act 1999 1
  • In Malaysia, these organizations listed above directly and indirectly intervene to ensure that thetraders profit via honest dealings. In other words sellers must deal honestly and fairly to theircustomers. This allows a healthy economy and the interests of consumers and traders areprotected.The following will briefly introduce the various consumer protection bodies and their area ofassistance.1.1 The Ministry of Domestic Trade, Cooperative and Consumerism (MDTCC)The ministry was formerly known as the Ministry of Domestic Trade and Consumer Affairs(Kementerian Perdagangan Dalam Negeri Dan Hal Ehwal Pengguna). The ministry wasestablished with the aim to encourage ethical trade practices and to protect consumer interest.The ministrys functions include managing matters related to consumer protection andintellectual property; licensing for manufacturing and sales, direct selling, and selling ofpetroleum and petrochemical products; implementing weights and measures rules; andregistering of trusts companies and businesses. Official site features consumerism education,consumer claim tribunal, goods under price and supply control, acts, statistics, forum, e-aduanand e-tribunal. Under the portfolio of MDTCC us the Intellectual Property Corporation ofMalaysia, which is better known as MyIPO, and is a statutory body that is entrusted to protectintellectual property rights in Malaysia, which comprises Patent, Trade Mark, Copyright,Industrial Design, Geographical Indications and Integrated Circuit Layout Design.1.2 Ministry Of Information Communications And Culture (KPKK)The Ministry of Information Communications and Culture (KPKK) is a ministry responsible inplanning, implementation and coordination on all policies related to three vital sectors; namelyinformation, communications and culture. KPKK has a diverse portfolio and one of the ways thisministry protects consumers is through its frame work of personal data protection bill in manyangles so that personal data privacy and security of Malaysians public and all potentialstakeholders.1.3 Tribunal For Consumer Claims (TCC)This organization is also known as Tribunal Tuntutan Pengguna Malaysia (TTPM) in Malayterm. The Tribunal for Consumer Claims is an independent body established under the ConsumerProtection Act 1999, under the Ministry of Domestic Trade and Consumer Affairs. The tribunalthat works like court is a less expensive way for consumer to file claims in an easy, speedymanner and at minimal cost. The total amount claimed must not exceed RM25,000.1.4 The Communications and Multimedia Consumer Forum of Malaysia (CFM)The Communications and Multimedia Consumer Forum of Malaysia (CFM) is an organisationdesignated by Malaysian Communications and Multimedia Commision Malaysia (MCMC) as aConsumer Forum as per the provisions in the Communications and Multimedia Act 1998. Itsprimary role is to produce voluntary industry codes which serve as a guideline or best practicebenchmark for the Communications and Multimedia Service providers. 2
  • CFM is a channel for complaints on Communication and Multimedia services. It is also tasked todevelop Codes that protect the rights of the consumer, recommend procedures for compensationand any other courses of action to the customer in case of a breach from the Consumer Code.The CFM also endeavors to promote and encourage high standards of service, conduct andperformance throughout the Communications and Multimedia industry and to develop consumerconfidence. CFM has introduced two consumer codes to administer and resolve issues receivedwhich are The General Consumer Code (GCC) and Internet Access Code; either which is aguideline for fair and equitable service between service providers and consumers. The codesoutline procedures and recommends inexpensive processes to solve complaints out of the courtsystems.1.5 National Consumer Complaint Centre (NCCC)The National Consumer Complaints Centre (NCCC) was launched in July 2004 with thefinancial support provided by the Ministry of Domestic Trade and Consumer Affairs Malaysiaand ERA Consumer Malaysia. The ways they help the consumers in Malaysia is by providingassistance in complaint handling, provide information, advice and knowledge to empowerconsumer in their rights. NCCC from time to time advocates policy changes on various issuesfrom the complaints received nationwide.1.6 Malaysian Communication and Multimedia Commission (MCMC/SKMM)The MCMC regulates and promotes the communications and multimedia industry encompassingtelecommunications, broadcast, Internet services, postal and courier services, and digitalcertification. The MCMC delicately balances the overall interests of the consumer, industry andinvestor. The MCMC also ensures that consumers have access to competitive pricing, widechoices, quality of service, overcome digital divide (through USP funding) and suitablebroadcast content for Malaysians. The MCMC plays its part by ensuring that consumers enjoychoice and satisfactory level of services at affordable price, consumers benefit throughprovisioning of necessary services and complaints are handled fairly and effectively, as well asmonitor the level of complaints received from consumers, in accordance with the provision ofSections 195 and 196 of the Communications and Multimedia Act 1998.The Communications and Multimedia Act 1998 allows the MCMC to regulate (1) alltelecommunications rates imposed on public; (2) all emergency and operator assistance servicesavailable to public; (3) quality of services being provided to the public; and (4) the handling ofconsumer complaints.1.7 Consumers Association of Penang (CAP)The Consumers Association of Penang (CAP) is a grassroots Malaysian non-governmentalorganization, linking consumer issues with environmental and development issues. CAP is avocal advocate for consumers rights concerning food, housing, health care, sanitation, publictransport, education, and the environment. It produces a range of educational materials andorganizes workshops, seminars, and rural information programs. CAP is dedicated to helping 3
  • people become more responsible consumers, and to protecting them from marketplacemalpractice and abuse.1.8 Consumer International (CI)CI is a global federation of consumer organizations with 220 member organisations in 115countries. It is an independent and not-for-profit. CI campaigns on the international issues tocustomers in various countries. CI also brings changes to government policy and corporatebehaviour while raising awareness of consumer rights and responsibilities. If any organizationsare found guilty, CI will work with consumers to hold these organizations accountable and willdemand from government consumer rights and concerns. CI all over the world act as a overseercampaigning against any behaviour that threatens, ignores or abuses the principles of consumerprotection through various channels such as by collaborating with national member organisationsto influence governments, highlight marketplace abuses and raise grass roots support; pressingconsumer concerns through our official representation at global bodies such as the UnitedNations (UN), World Health Organization (WHO), International Organization of Standardization(ISO), and the Food and Agriculture Organization (FAO); by raising awareness about purchasingchoices through clear, engaging and accessible communication.2.0 EXPLAIN THE LAWS, RULES AND REGULATIONS THAT ARE USEFUL TOREFER AND PROTECT CONSUMERS IN BAD CIRCUMSTANCES.1. PRICE CONTROL ACT1946This law is under the Ministry of Domestic Trade and Consumer Affairs. Price control meansthat governmental obligations on the prices of goods and services in a market to maintain theaffordability of staple foods and goods and to prevent price gouging during shortages. Unlikefree markets that have invisible hand, developing countries like Malaysia are faced with theescalating cost of drugs; their healthcare systems are under great strain because of this. Thus thegovernment’s aim with Price Control Act 1946 is to ensure that the prices are controlled and allgoods must have price tagging and proper labeling of goods.2. CONTROL OF SUPPLIES ACT, 1961This legislation facilitates the control and rationing of supplies of 20 controlled articles to ensuretheir availability at reasonable prices. Ministry of Domestic Trade and Consumer Affairs has thepower to control or even prohibit any manufacturing and distribution, hoarding or refusal to sellcontrolled goods.3. THE TRADE DESCRIPTIONS ACT 1972 4
  • Ministry of Domestic Trade and Consumer Affairs enforced this legislation that prohibits wrongdescription when selling goods, false or misleading indication as to the price of goods and falseor misleading statements as to any services, accommodation or facilities provided in the courseof a trade or facilities and conferring power to require information or instructions relating togoods to be marked on or to accompany the goods or to be included in advertisements and forrelated purposes.4. CONTROL OF PADDY AND RICE ACT, 1974This law is enforced by Ministry of Agriculture and monitors the supply of paddy and ricedomestically and ensures a stable price for both farmers and consumers. The law ensures theadequate supply of rice in any situation, especially during national emergencies.5. THE RENT CONTROL ACT, 1966 AND THE RENT REPEAL ACT, 1997Ministry of Housing and Local Government ensures the fair practice in the control of rent withinthe States of Malaysia. There was an act to repeal the Rent Control Act, 1966 and a transitionalprovision for the period 1.9.97 - 31.12.99 was enacted.6. THE ROAD TRANSPORT ACT, 1997This law under the Ministry of Transport regulates the proper laws for the facilitation of publictransport services.7. THE STANDARD ACT OF MALAYSIA, 1995The Ministry of Science, Technology and the Environment determines the standards and theconduct of research on products in the market. The Act is also intended to increase societysstandards of living especially in areas of safety and welfare.8. THE FOOD ACT, 1983The Ministry of Health regulates the sale of foodstuff so as not to endanger consumers, besidesensuring that food content is not harmful.9. THE PREVENTION AND CONTROL OF DISEASES ACT, 1988Through this act, the Ministry of Health ensures the prevention and control of communicablediseases. This law even empowers the Assistant Health Officer to enter Premises for the purposeof carrying out checks and examinations.10. THE PHARMACEUTICALS (ADVERTISEMENT AND SALES) ACT, 1956This Act controls and restricts the advertisement of pharmaceutical products which mayinfluence or entice the use of the product for purpose of treating dangerous conditions. All 5
  • advertisements for pharmaceutical products also need to receive prior approval from the Ministryof Health.11. THE FACTORIES AND MACHINERIES ACT, 1967Under the Ministry of Human Resources, the Act regulates the proper operation of factories andmachineries by way of registration and examination of such machinery to ensure themaintenance of health and safety standards, including the welfare of all parties involved.12. THE ELECTRICITY ACT, 1949Ministry of Energy, Telecommunications and post enables the National Electricity Board todetermine the billing rates; and the licencing of assembly and construction activities to guaranteequality of work and ensure consumer safety.13. THE ENVIRONMENT QUALITY ACT, 1974Ministry of Science Technology and the Environment is responsible for the coordinating of allactivities pertaining to the disposal of substances into the environment, so as to control pollutionlevels and protect and improve the quality of the environment.14. THE HIRE-PURCHASE ACT, 1967Ministry of Domestic Trade and Consumer Affairs will regulate the form and contents of hire-purchases agreements and the rights and duties of parties to such agreements.15. THE INSURANCE ACT, 1963Ministry of Finance ensure the smooth flow in the running and activities of insurance companiesby way of registration.16. THE MONEYLENDERS ACT, 1951Ministry of Finance requires that money lenders register for a lisence before money lenders as anindividual of company engages in money loans.17. THE PAWN-BROKERS ACT, 1972Ministry of Housing and Local Government requires any person engaging in pawn-brokingactivities to mandatorily obtain a licence prior to functioning as a pawn-broker.18. THE SALE OF ACT, 1957This act refers to the sale of goods between parties engaging in sales and purchase of goods, Thislaw protects consumers by ensuring the merchantability and guarantability of goods. 6
  • 19. THE CONTRACTS ACT, 1950This act outlines the duties and responsibilities of all parties engaging in any kind of contract oragreement.20. THE FINANCE (BANKS AND FINANCIAL INSTITUTIONS) ACT, 1986Under the Central Bank of Malaysia this Act regulates lending activities By banks, financialinstitutions and companies by way of licence issuance and control.21. THE DIRECT SALES ACT 1993Ministry of Domestic Trade and Consumer Affairs ensures through this act that the licensing ofpersons carrying on direct sales business, for the regulation of direct selling and for other mattersconnected are developed in an ethical manner, prohibit pyramid selling scheme and ensureconsumers are protected.22. THE TRADE MARKS ACT 1976Ministry of Domestic Trade and Consumer Affairs safeguards the interests of the respectiveowners of intellectual property through this law.23. THE PATENTS ACT 1983 AND THE COPYRIGHT ACT 1987Ministry of Domestic Trade and Consumer Affairs protects a copyright owner’s works like book,music, film, etc; taking into account public interest. The copyright law provided severalexclusive rights to owners, e.g. the right in reproduction, performance, distribution, etc. The lawalso provides several exemptions where permission from the copyright owner.24. THE COMPANIES ACT 1965Ministry of Domestic Trade and Consumer Affairs monitors the formation of companies and theregulation of their affairs.25. THE KOOTU FUND (PROHIBITION) ACT, 1971Ministry of Domestic Trade and Consumer Affairs prohibits any undertakings which promote orare designed to promote kootu funds.26. THE SECURITIES INDUSTRY ACT, 1983Securities Commission allows the provisions with respect to stock exchange, stock brokers andother persons dealing in securities, and for certain offenses relating to trading in securities, andfor other related matters in those areas.27. SEXUAL HARASSMENT ACT 7
  • The Ministry of Human Resources protects any staff who lodges a complaint against a personwho makes any implications or gestures that could be sexually offensive for somebody. This actalso considers complaints against a person who dresses provocatively and investigation.28. PERSONAL DATA PROTECTION ACTThis act protects people from their personal information is intruded in any form without theirprior consent.2.1 BRIEFLY ADD YOUR COMMENT ON HOW THE LAWS CAN BE FURTHERIMPROVES.Although there are laws enacted to protect electricity billing rates and the health care industry,many government organizations have become privatised. This does not protect the economically-disadvantaged consumer. Consumption has changed over the years. Rich and poor consumersface the impact of accelerating economic globalisation.Laws should be tightened further in the field of information technology, e-commerce, cross-border movements of financial services and global advertising, and from dumping of unsafeproducts. Just recently the government web sites were hacked. Many personal data were stolen.Organizations now need to partner with TELCO companies to invest in better web security.There should be constant review of laws. It is my opinion that from time to time the law must befurther improved when more complaints or problems arise to curb any cheating towardscustomer. This can be done through research work into important consumer issues. This alsorectifies any loopholes in the act, if any.In my opinion, the most effective tool in consumer protection is consumer education as it helpsto develop skills to enable consumers to function as socially-responsible consumers. Theprogrammes for consumer education range from the formal education system to non-formalchannels. Schools should also have consumer clubs to create the awareness from young andactively participate in consumer protection based movements and activity. In relation to his,teachers must also be trained with a standard consumer training moduleAt present, Malaysian school syllabus has consumer-centred topics are incorporated into varioussubjects. At the tertiary level, consumer law and consumer education are offered as subjects.Non-formal consumer education activities include the establishment of school consumer clubs,seminars, and publications and multimedia material produced by the Ministry of Domestic Tradeand Consumer Affairs and consumer groups. Seventy per cent of secondary schools have set upconsumer clubs. 8
  • There could also be a ‘One Stop Consumer Centres’ to channel consumer complaints to relevantorganizations and provide advice to consumers. The One Stop Consumer Centres can alsocoordinate programs with relevant government agencies to create awareness.Many rural areas are not aware about consumer rights. This can be rectified by having withTELCOs to provide more internet access to rural community. In addition The One StopConsumer Centres could be set up in rural areas to help channel rural communities’ complaint tothe right division, follow ups, provide knowledge and training to these people, etc.Efforts can also be made to build up consumer NGO’s through bigger grants, standardizedreference material and staff funded by the Ministry of Domestic Trade and Consumer Affairs.There should be more advertisement in the media so that customers know where to turn to intimes of trouble. There should be short education adverts on tv and radios, internet, bill boardsetc. At present there are many who do not yet know their rights as a consumer in this country.3.0 THEN, ANALYZE 10 CUSTOMER COMPLAINT ON GOODS AND ANOTHER 10 COMPLAINTS ON SERVICES : EXPLAIN THE COMMON PROBLEMS FACE BY THE CUSTOMERS WITH REGARDS TO PURCHASE OF THE GOODS AND SERVICES. EXPLAIN THE MAIN REASONS WHY THEY FACE SUCH PROBLEMS WITH THE GOODS OR SERVICE PROVIDERS. COMMENT ON THEIR EFFORT AND INITIATIVES IN MAKING COMPLAINTS TO THE RIGHT PARTIES.Having studied the various cases and complaints in various consumer protection web sites, thecommon problem faced by the customer is dissatisfaction from the products and services offered.They comprehend on certain facts and purchase the product and services trusting word to wordas it is spoken or written and finally are unhappy with the amount of money paid. They feel thatthe money paid is not worth the product or services offered.Goods and service providers are facing tough competition in the market. And in order to selltheir goods and services and at the same time to lure customers, the company gives tall promisesin its advertisement. The companies do not deliver what it actually advertised to the generalpublic. Consumer rights are not widely advertised. The sellers themselves do not know that thereare laws protecting consumers. Perhaps the sellers believe that they can get away with crime.Besides the court there are also organizations like NCCC and TTPM that can function in thesame way the courts function. 9
  • 4.0 BESIDES THE SOLUTIONS GIVEN BY THE ORGANIZATIONS, SUGGEST YOUR OWN POSSIBLE SOLUTIONS OR ADVICE TO CONSUMERS IN ORDER TO AVOID SUCH PROBLEMS IN FUTURE AND BE SELF-PROTECTED, INSTEAD OF RELYING ON OTHERS TO DO SO.A consumer must be careful that they do not sign any document without properly reading. Theyshould also seek advice from a lawyer friend or someone who is in the legal that can advice onthe content and rules laid out for the consumer.If it is an unknown or newly established firm, it is best to check with ROS or search via internetto know about this company. The person may also visit the address given and check with theneighbouring firms on this new or unknown firm. There are many companies these days that aremore internet based. They do not have a physical office. I have also come across somecompanies that are purely e-based. It is my opinion such companies are best avoided.Unless all doubts are cleared only then a person ought to sign a document.5.0 CONCLUSIONThe above diagram shows that millions are spent on influencing consumers throughadvertisement media. Though it may be beneficial to traders, consumers must also understandtheir rights and be careful in their decision making. Malaysia has achieved considerable successin enhancing consumer welfare but much more is needed as the nation strives to reach developednation status by 2020. THE END 10