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How firms get away with selling faulty products, poor services : The Standard



Most Kenyans have no idea what gluten is. The ingredient is used in pastries to enhance dough elasticity, help it rise and give it a chewy texture.
Those keen about it are mostly in the food industry or allergic to the component. Those allergic to gluten suffer bloating, abdominal pain, constipation headaches, exhaustion, and skin problems thus their selection of food has to be done with the knowledge of all the ingredients used.
When Ms Nyaruai visited ArtCaffe, a bakery and coffee shop owned by private equity firm ECP, she had legitimate expectations that they would not wilfully mislead her culinary preference and give her something that would clearly cause her discomfort.

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“The complainant alleged that she purchased gluten-free cookies from Artcaffe which affected her health as she is gluten-intolerant. Upon contacting Artcaffe, she was informed there was a disclaimer that the cookies had traces of gluten,” said the Competition Authority of Kenya (CAK) in its annual report.
According to CAK, Artcaffe misled consumers on the labelling of their chocolate cookies by indicating on the package they were gluten-free, while at the same time indicating that the cookies may contain traces of gluten.
Such an admission could have created a huge furore, but did ArtCaffe come out with just a slap on the wrist?
The investigations culminated in a settlement under section 38 of the Competition Act which allows companies to pay off the complainant or a fine.
“Artcaffe made an undertaking to ensure the labelling of their gluten-free cookies shall have adequate and accurate information. Further, the manufacturing environment is controlled in order to prevent contamination of cookies with gluten,” CAK Director-General Kariuki Wang’ombe said in the annual report.

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In a review of the cases investigated by CAK this year, there is a discernable trend where firms will fall over themselves to compensate a complainant – arguably to avoid being called out in public or having a whole line of products withdrawn from the shelf.
It is also clear that the settling with one customer will arguably be cheaper than a class suit where a firm may have to face mass retribution in brand and in the pocket.
“We have noted that there are too many of what you can call ‘out of court’ settlement by companies before they can be punished, it seems companies have found a loophole in the competition law where they quickly confess and agree to pay,” said Consumer Federation of Kenya Secretary General Stephen Mutoro.
With the Kenyan Bureau Standards overwhelmed by rogue manufacturers, colluding staff and insufficient capacity, consumers are increasing vigilance for the quality of products.
While Kenya’s upper class are more aware of their right to quality from industry players and can forward cases of substandard goods to the Competition Authority of Kenya, the middle class is catching up as cases increase. CAK is now able to capture concerns of consumers especially via social media which has enabled Kenyans to expose companies with faulty merchandise.

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For instance, CAK noted that several consumers complained via social media on the quality of shoes being sold by Bata Shoe Company (Bata).
In response, the Authority requested the affected consumers to report the matter as well as provide evidence of purchase which allowed the authority to institute investigations.
CAK established that Bata’s return policy was not in line with the Act and ordered that the requirement by the firm that shoes be returned in their original package be amended to allow for flexibility in cases where it may not be possible to have the original package.
“This was effected by Bata and is evident in all their receipts of purchase. This case demonstrates that consumers have a right to quality goods and also to redress where their rights have been violated,” Mr Wang’ombe said.
The cases also show how companies can treat consumers when there is no form of protection.
Airtel for instance in the glitz of promotion had told one Ms Margaret that she had won a tablet, only for the telco to change and give her a smartphone worth only Sh3,999.
The phone was even defective. Its competitor, Safaricom also had a tiff with a customer, Mr Nehemy who bought a Lenovo phone in Safaricom Nanyuki branch which was defective.
The company took too long to resolve the matter until the customer reported to CAK. CAK says the cases were resolved after the authority intervened and the customers were compensated.
Cofek notes that some cases ought to be publicised so that consumers can know the rogue firms. “We have expressed our issue with how CAK gazettes these offences because sometimes, the public does not understand what went wrong,” Mr Mutoro said.
He observed that unlike other countries where the punishment was punitive, the culture of getting off the hook was encouraging companies to blatantly break the law.
“There are a lot of things that are now coming up, the case of bread reducing the grams of a loaf, we have multinational companies who operate only one super dealer that charges arbitrarily for service and repair and restrict market competition,” Mr Mutoro said.
Zuku, GoTV, Jumia, Kilimall, Goodlife Pharmacy, Naivas, Tuskys, Nakumatt, 1X Bet, BetIn, Davis&Shirtliff, Royal Mabati and SkyWard Airline are some of the companies that continue to buy the silence of their disgruntled consumers in their offer products and services – a trend that is likely to continue as more people become aware of their rights.
Keep that receipt. Consumers also need to know that they cannot just make wild allegations and will need at least proof of having bought the products in a particular shop.
For instance, Institute of Customer Service Kenya accused Unicode Computers, of selling them a faulty Lenovo laptop and they promised to replace it with a brand new one but this was not done.
CAK could not do anything because the complainant did not have a receipt for the purchase. “The complainant failed to provide the requisite evidence (receipt of purchase). The case was closed on 20th July 2017,” Wang’ombe said. This has seen more firms encourage customers to keep receipts.
CAK also offers lessons to other authorities to take up consumer issues, having received complaints outside its purview, including Mr Wesly who accused Newfortis (formally Nyeri Teachers Sacco of charging him an interest of Sh40,000 for paying the loan early, which was not disclosed prior, to the agreement.
The matter was forwarded to the Sacco Societies Regulatory Authority.
The Central Bank of Kenya also got a forwarded case from CAK after Ms Lucy accused National Bank of Kenya (NBK) of demanding money from her even after she cleared her loan.
Ms Lucy claimed that she took a loan with NBK and claims to have repaid it in full.
The bank, however, informed her that she still owed them but they never gave an explanation on the amount owed. NBK further instructed her employer to recover the amount from her pay.

Competition authorityConsumer Federation of KenyaPoor services

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