Price: Gouging post Flooding
The recent flooding in the Western and Northern division caused by Tropical Cyclone Josie and Keni has affected members of the public and businesses in a number of areas.
The Fijian Competition and Consumer Commission (FCCC) is mindful of the fact that post natural disasters businesses which are affected often increase the price of basic goods as a means to recover their losses.This could be that the cost of doing business may have increased for the trader. The FCCC has also noted that some businesses try to recover their losses by selling off the flood affected goods (products) or items to unsuspecting consumers, without clearly disclosing that the good(s) (product(s))w as affected by disaster. Businesses may engage in such actions with a view to maximize their profit while ensuring to recover the loss.
Despite the situation it is imperative for businesses and stakeholders to take heed of the following information:
1. Price Controlled Items greement
The list of items under price control need to be sold at the respective authorised prices.Natural disasters do not mean that the prices of basic food items, particularly those controlled by FCCC can be hiked.
Any changes to prices of price-controlled items will come by way of signed Authorisation by the Commission, the same will be communicated to respective stakeholders.
If it is identified that businesses engage in selling price-controlled item(s) above the authorised prices, FCCC would take appropriate action against the business to remedy the issue.”
2. Avoid Profiteering and Price Gouging ootprint
Often it is noted that post natural disasters, the prices for goods or services go up whereby businesses seem to hike sale price to cover loss and/or shortage of supply.
In doing so, people, particularly those less fortunate, struggle to make ends meet. While FCCC is mindful of such factors, however it would like to clarify that the FCCC’s role is not to stop price increases which occur following supply constraints caused by natural disaster such as cyclones, rather, it is to ensure that businesses do not make misleading claims when they attribute any price increases to such situation in a bid to artificially raise prices.
The conduct of misleading and deceiving consumers is contrary to Section 75 of the FCCC Act 2010.
Where such conduct occurs, the FCCC has the power to issue warning notices, infringement notices, impose penalties of up to $50,000.00 and Prosecute traders accordingly.
Upon prosecuting traders FCCC may make an application to Courts to impose penalties of up to $250,000.00 per contravention.
3.Limiting Purchase
It is imperative for businesses to refrain from limiting the purchasing power of a consumer.
It has been noted in the past that traders inform consumers that they can only purchase a certain amount of products.
For instance, if a consumer wishes to purchase three (3) bottles of 1litre soya bean oil, they are restricted to purchase only one (1). Such conduct is contrary to Section 87I of the FCCC Act 2010.
4.Sale of Water-damaged Products
Businesses must be honest towards their customers when selling flood affected products including vehicles.
If the product quality has been affected making it not fit for its intended purpose, then the business should refrain from selling it.
It would be advisable that businesses dispose off such damaged goods (products).
However, if a business decides to sell goods (products) which had been affected or damaged by water, the business must ensure that the good (product) is still fit for its intended purpose and the business must clearly inform the consumers that the good (product) had water damage.
If traders sell items of non-merchantable quality goods (products) deceptively or by misleading, then they may be liable for enforcement action under the FCCC Act 2010.
Further, it is advisable for motor vehicle dealers to not lie or withhold information while selling motor vehicles if the motor vehicles had sustained water damage during floods or disasters.
By withholding this information from a consumer before sale, the business would have deemed to have acted deceptively which is a contravention of FCCC Act 2010.
5.Charity Scams
O In the past, fake charities and fundraisers have taken advantage of public generosity post natural disasters.
Traders should ensure their business is aloof of such practices and their staff members do not use the business name to source funds from the public. Simultaneously, businesses should avoid giving charity to scammers.
Those who may come seeking financial assistance for a legitimate charity, check for the following:
I.Charity you are donating to – whether it is legitimate or not;
II.The physical location of the organization;
III.Identification card of the collector; and IV. Receipt post payment.
FCCC wishes to reiterate that post natural disasters are trying times for both business houses as well as consumers. However, one shall not engage in unfair trade practices to simply profiteer.
The FCCC will act within its jurisdiction and take enforcement action against those traders if identified that they fail to comply with the FCCC Act 2010.
Contact Information
For more information/details on Fijian Competition and Consumer Commission and FCCC Act 2010, visit our website on http://www.fccc.gov.fj