Business Law

Consumer Protection in Malaysia

Objectives
By the end of this section, you should be able to:
Explain the scope of application of the Consumer Protection Act
1999 and define the term goods.
Elaborate the concept of unfair trade practices and its
consequences.
Describe the concept of false and misleading conduct.
Elaborate and apply the provisions for consumer protection.
Evaluate the provisions and impact of various implied
guarantees.
Explain and apply the remedies available to consumers.
Comprehend and apply the processes to be used for consumer
rights through the consumer tribunal.
Course Content
The need for and status of consumer protection
Consumer Protection Act 1999
False, misleading and deceptive conduct
Remedies available to the consumer
Punishment
Role of tribunals for consumer claims
Implications for business decisions
Introduction

The term consumer protection can be used to
describe rules of law which recognises the
bargaining weakness of individual consumers as
well as ensure that their weakness is not unfairly
exploited
The main concern of this law is defective goods
and services.
Introduction

Relevant law is the Consumer Protection Act
1999
It provides: -
For consumer protection in relation to supply of
goods and services, and
Established the National Consumer Advisory
Council and the Tribunal for Consumer Claims
Introduction
Other laws which directly or indirectly provide for
consumer protection and govern the
transactions involving a consumer such as:
Price Control Act 1946
Control of Supplies Act 1961
Hire-Purchase Act 1967
Weights and Measures Act 1972
Trade Description Act 1972
Direct Sales Act 1993

Introduction
Some key consumer rights are:
Right to obtain fundamental goods and services to guarantee a
satisfactory life
The consumer is protected from the processing and marketing of
goods as well as services which can be harmful
Sufficient, accurate and precise information to assist him/her in
making the right decision
The consumer reserves the right to have access to direct
information with regards to all goods and services
The consumer must have the right and opportunity to voice out
Right for compensation
Scope of application of the Act

Application of this Act is supplemental
This Act does not affect the liability arising under any other law such
as the Sale of Goods Act or the Contracts Act etc
By an amendment carried out in the Act in year 2007, transactions
effected by electronic means are also covered by the Consumer
Protection Act
The Act does not apply to all transactions involving sale of goods
It must be goods and services supplied to a consumer in the course
of a business and there are a number of transactions which are
excluded
Scope of application of the Act

This is stated in Section 2 of the Act which reads as follows:

1. Subject to subsection 2(2), this Act shall apply in respect of all
goods and services that are offered or supplied to one or more
consumers in trade.
2. This Act shall not apply
a. to securities as defined in the Securities Industry Act 1983;
b. to futures contracts as defined in the Futures Industry Act 1993;
c. to contracts made before the date on which this Act comes into
operation;
d. in relation to land or interests in land except as may be expressly
provided in this Act;
e. to services provided by professionals who are regulated by any written
law; and
f. to healthcare services provided or to be provided by healthcare
professionals or healthcare facilities.

The consumer

Applies to consumer transactions
Defined in s3
S3 Consumer Protection Act 1999
A consumer means a person who
a. acquires or uses goods or services of a kind ordinarily acquired for
personal, domestic or household purpose, use or consumption; and
b. does not acquire or use the goods or services, or hold himself out
as acquiring or using the goods or services, primarily for the
purpose of:
i. resupplying them in trade;
ii. consuming them in the course of a manufacturing process; or
iii. in the case of goods, repairing or treating, in trade, other goods or
fixtures on land.

Goods

Goods means goods which are primarily purchased,
used or consumed for personal, domestic or household
purposes and includes
a. goods attached to, or incorporated in, any real or personal
property;
b. animals, including fish;
c. vessels and vehicles;
d. utilities; and
e. trees, plants and crops whether on, under or attached to land or
not, but does not include choses in action, including negotiable
instruments, shares, debentures and money.

Services

Services are also defined in s3 as follows:

any rights, benefits, privileges or facilities that
are or are to be provided, granted or
conferred under any contract

Unfair trade practice
Part II of the Act in s9 to s18 proscribes or limits the
various business or trade practices that are regarded as
unfair
It seeks to protect consumers by improving the public
conduct of businesses, their selling practices, advertising
and promotional activities
The prohibited conduct listed in Part II includes any
misleading or deceptive conduct, false representation
and unfair practice in connection with the goods and
services offered or supplied to consumers in trade
Unfair trade practice
Part III of the Act provides for the safety of
goods and services for the consumer
Such goods and services must comply with
the safety standards laid down by the
authorities
The punishment for contravention is also
provided by s25.
False, misleading and deceptive
conduct

S8 provides the definition of false,
misleading or deceptive as conduct,
representation or practice which is capable of
leading a consumer into error
Any misleading conduct as to the nature,
manufacturing process, characteristics,
suitability for a purpose or quantity of the
goods is an offence under s9
False, misleading and deceptive
conduct
In relation to services, any conduct which is
misleading or deceptive or is likely to mislead
or deceive the public as to the nature,
characteristics, suitability for a purpose or
quantity of the services, is an offence.
S10 creates an offence in relation to false or
misleading representation
False, misleading and deceptive
conduct
A person who makes a false or misleading
representation or misleading indication as to
price would be guilty under s12
For false representation and other misleading
conduct in relation to land, it is an offence
under s11
Bait advertising

Provided by s13
Bait advertising is a conduct intended to
attract customers by offering special prices
only for the consumers to be told upon follow
up that the goods and services have been
sold out but another product at a higher price
is available for sale
Gifts, prizes and free offers
To attract customers, some stores make
promises of free offers or gifts
S14 gives some protection to consumers
against such offers by providing that no
person shall offer any gift, prize or other free
item when there is no intention of providing it
Such an offer cannot be made when there is
no intention of not providing it as offered
Limited goods

Retailers and suppliers say that the goods
are of limited edition
This is meant to attract consumers to buy the
goods quickly before stocks run out

Limited goods

S15 requires that in supplying or offering to
supply goods for sale to consumers, no
person should describe the goods as limited
unless their edition, printing, minting, crafting
or production is restricted to
pre-determined maximum quantity; or
the actual quantity ordered or subscribed to within
a specified and reasonably short period of time.

Limited goods

Whenever a retailer or supplier claims that
goods are limited, he shall state clearly in a
statement which shall be conspicuously
placed near the claim that
the maximum quantity of goods which are offered
for sale; and
the specific time period or dates for which the
goods are offered for sale.
The punishment for not fulfilling the above
requirement is provided in s25.

Limited goods

The issue is whether a supplier of goods
cannot demand for or accept any payment
when he/she does not intend to supply the
goods or services (s16)
S16 is meant to prevent gimmick
advertisements
Safety of goods and services

Part III of the Act which comprises s19 to s24
provides rules for the protection of
consumers against unsafe goods and
services
Punishment

Part IV of the Consumer Protection Act 1999
provides for common penalties, defences and
remedies for offences committed under Part
II and III
Punishment
Punishment is s25(1)
Defences are stated in s26 s28
Implied Guarantees
S30 provides that the implied guarantees under Part V
of the Act shall apply irrespective of the fact whether the
goods are supplied in connection with services or not
There are seven guarantees in Part V which are implied
in terms of supply of goods to a consumer:
S31: Implied guarantee as to title
S32: Implied guarantee as to acceptable quality
S33: Implied guarantee as to fitness for particular purpose
S34: Implied guarantee that goods comply with description
S35: Implied guarantee that goods comply with sample
S36: Implied guarantee as to price
S37: Implied guarantee as to repairs and spare parts

Remedies

The Consumer Protection Act provides the
following remedies for failure or breach of
above mentioned implied guarantees:
S41: Options against suppliers where goods do
not comply with guarantees
S43: Loss of right to reject goods
S46: Consumers option of refund or replacement




Implied guarantees in respect of
services

In Part VIII of the Act under Sections 53 to
56, there are provisions in relation to
contracts for the supply of services:
S53: Implied guarantee as to reasonable care and
skill
S54: Implied guarantee as to fitness for particular
purpose
S55: Implied guarantee as to time of completion
S56: Implied guarantee as to price



Product liability

Part X of the Consumer Protection Act deals
with product liability:
Liability for defect in product
Liability for harm caused by defective products

Civil remedies

The National Consumer Advisory Council and
The Tribunal for Consumer Claims are two
specialised bodies established under the
Consumer Protection Act 1999
The former act as an advisory to the Minister
and the latter is a mechanism to determine
consumer claims
Q & A