Proposed law changes hand CAK powers to probe consumers rights breach

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Competition Authority of Kenya acting Director General Dr Adano Roba. FILE PHOTO | LUCY WANJIRU | NMG

The competition watchdog will have the power to initiate investigations into consumer rights breaches such as the sale of defective goods and misrepresentation in a change expected to boost the regulator’s protection mandate.

The proposed amendments will be a departure from the current model where the Competition Authority of Kenya (CAK) only takes actions of traders upon receiving consumer complaints.

With the nod, the CAK will have an expanded scope to launch investigations against consumer welfare breaches like false representations as well as the supply of unsafe, defective and unsuitable goods.

“The Competition Act, as currently drafted, requires a consumer to complain directly with the authority to trigger an investigation. This model does not serve the interest of the public and curtails the authority’s mandate execution. If the proposed amendment becomes law, it will empower the authority to investigate consumer-related issues it identifies in the markets even without a prompt from a consumer,” the CAK told this publication yesterday.

The CAK’s consumer protection department handles consumer complaints. Its core function is to investigate complaints relating to false or misleading representations, unconscionable conduct and the supply of unsafe, defective and unsuitable goods.

The department also promotes the creation of consumer bodies and the standards they should adhere to.

The watchdog works with the consumer bodies to promote consumer welfare and sensitise consumers about their rights and obligations under the Competition Act.

Consumers can complain directly to the authority via post, email, telephone or by visiting the watchdog’s offices.

The CAK then analyzes the complaint and contacts the accused party for information where necessary before applying administrative remedies which may range to an order for refunds, the replacement or repair of goods, withdrawal of misleading representation, recall of unsafe goods and notices to the public on the existence of such goods.

The watchdog expects the changes to lead to a rise in investigations, improving its role in consumer protection.

“The amendment is expected to bring more consumer cases under the purview of the authority, and redress consumer concerns more effectively,” CAK added.

In the financial year ended in June 2023, CAK investigated 521 consumer cases, a 30 percent jump from 401 cases probed in the previous year.

The watchdog’s investigations yielded Sh19.6 million in consumer savings in contrast with Sh6.9 million in the year to June 2022.

The majority of consumer cases in the year to June 2023 related to false or misleading representations and unconscionable conduct where a majority of complaints were from the aviation and financial services sectors.

In fulfilling its mandate on consumer protection, the CAK collaborates with other sector regulators including the Kenya Bureau of Standards (KEBS), the Insurance Regulatory Authority (IRA), the Central Bank of Kenya (CBK) and the Communications Authority (CA).

Of the 521 consumer violation cases handled in the 2022/23 financial year, the CAK completed investigations on 317 cases.

During the period, the aviation sector recorded the highest increase in number of consumer complaints, marked by refusal to refund the consumers after cancellation and rescheduling of flights by airlines that fly to local destinations.

Meanwhile, complaints in the financial services sector were mainly against non-deposit taking microfinance institutions while complaints in e-commerce and trade were criminal in nature having touched on scams and fraud.

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