CCPC warns against unscrupulous Insurance Agents
The Competition and Consumer Protection Commission (CCPC) has expressed concern on the rise of unscrupulous individuals who have embarked on exploiting consumers by masquerading as agents for some insurance companies. The Commission recorded an increase in the number of consumer complaints recorded during the period January to September, 2019 which indicate that 18% of the Two Thousand and Forty Two (2042) consumer cases it has investigated emanate from the insurance sector with the most exploited individuals being rural based civil servants.
CCPC Director Consumer Protection Brian Lingela has observed that the incidence of complaints from the insurance sector regarding unfair trading practices by insurance agents has increased and is second only to retail trade which stood at 45%. He said that the majority of the cases the Commission has been handling show that some insurance agents and employees have resorted to using consumers’ personal details to enlist them to insurance products and services without their consent.
The Commission has established that unscrupulous insurance agents enlist consumers to insurance policies they have not consented to. Consumers, especially civil servants in rural parts of the country often get shocked to see deductions on their pay slips for policies they have not consented to. This trend is common in Western, Eastern, Muchinga, North Western, Southern, Northern and Luapula provinces.Further, the Commission has observed that some agents move from insurance company to another along with their previous customers’ personal details after being dismissed by their employers. The personal details are then used by agentsto meet sales targets for their new employers and in the process result in unsolicited pay slip deductions to the detriment of consumers.
It is of great concern to the Commission that while it is easy to effect salary deductions for unsolicited insurance products, it can take more than six months to a year to stop the deductions. This conduct is not only fraudulent but violates Sections 45, 47 and 49 (5) of the Competition and Consumer Protection Act (CCPA) No.24 of 2010 which clearly prohibits unfair trading practices and false or misleading representations and is punishable with a fine not exceeding ten percent of an enterprise’s annual turnover.
In addition, agents engaging in fraudulent transactions will be personally liable and can be prosecuted.
The Commission is therefore, advising civil servants especially in rural parts of the country to desist from disclosing confidential information such as their National Registration Cards (N.R.C) and Employee Numbers to individuals who may claim to be agents of any insurance company until they are ready to accept a proposed insurance contract.
The Commission is further warning insurance companies to ensure their agents do not engage in such conduct as they will be punished as principals. CCPC is mandated by law to enhance Competition and promote Consumer welfare for the growth of the economy and benefit of the people of Zambia.
CCPC warns PAZ and MAZ against Price Dictation
The Competition and Consumer Protection Commission (CCPC) has noted with concern that the Poultry Association of Zambia (PAZ) and Millers Association of Zambia (MAZ) have continued to exhibit behavior of agreeing and subsequently announcing the prices of day old chicks and mealie-meal.
This development comes after PAZ and MAZ were cited of having issued media statements in which the duo announced the possible hike in the prices of day old chicks and mealie-meal on 28th and 29th October, 2019 through the Zambia Daily Mail newspaper and Hot Fm radio station respectively.
The Commission has thus found this conduct to be a likely violation of Sections 8 and 9 of the Competition and Consumer Protection (CCPA) Act No. 24 of 2010 which clearly prohibits concerted practices and cartelistic conducts by players and members of the Associations
The Commission also notes that the conduct by the two Associations signals price direction and creates anticipation on the market which is unnecessary and may distort independent decision making on pricing of day old chicks and mealie-meal by players.
And CCPC Director Restrictive Business Practices, Mrs. Naomi Fulaza stated that both PAZ and MAZ have cases before the Competition and Consumer Protection Tribunal (CCPT) relating to similar conduct.
Mrs. Fulaza added that it was sad and unfortunate that Associations such as PAZ and MAZ can continue to make pronouncements related to price increment when the Commission has engaged them on the ills of such conduct. As the Commission would expect that such Associations be in the fore front of ensuring that they and their members abide by the laws of the land.
The Commission has since warned PAZ and MAZ not to engage in conduct that is likely to prevent, distort or restrict competition such as price fixing.
CCPC is mandated by law to enhance Competition and promote Consumer welfare for the growth of the economy and benefit of the people of Zambia.
CCPC grants Amnesty to businesses
The Competition and Consumer Protection Commission (“the Commission”) is as of 1st September, 2019, running a six month Amnesty Programme; up to the 28th of February, 2020. The aim of the programme is to raise awareness and compliance with the Competition and Consumer Protection Act No 24 of 2010 (“the Act”) by availing persons or enterprises engaged in cartel conduct and Restrictive Business Practices (RBPs) an opportunity to desist from further abrogating the Act; in exchange for a waiver of fines as well as immunity from possible prosecution.
This programme focuses on all subsectors of the economy and covers agreements deemed as anti-competitive or restrictive of competition under the Act.
The Commission through this programme and in line with Section 79 of the Act encourages persons and enterprises to come forward to the Commission with information that helps to demonstrate the existence of a prohibited agreement. The said information should be of such quality and degree of detail that it increases the chances of proving the existence of the prohibited agreement which the Commission would ideally have not been privy or have access to at all without investigation.
In light of this, the Commission is thus offering an opportunity to persons or enterprises to apply for amnesty and subsequently become good corporate citizens by complying with the Act.
Persons or enterprises who may not be sure whether their conduct or agreement is in breach of the Act are free to engage the Commission in person, or through their legal representatives; anonymously or otherwise.
Note should be taken that the Amnesty Programme is restricted to Part III of the Act, and will therefore not extend to Mergers or Unfair Trading covered under Parts IV and VII of the Act respectively.
CCPC, ZABS and Local Authorities Seize Expired Goods
The Competition and Consumer Protection Commission (CCPC) in collaboration with the Zambia Bureau of Standards (ZABS) and the four Councils in Lusaka Province have seized goods worth K2, 796.00 for not complying with the Competition and Consumer Protection Act No. 24 of 2010 as well as the Food and Drugs Act Cap 303 of the Laws of Zambia.
The seizure was conducted in conjunction with Rufunsa, Chongwe, Luangwa District Councils and Lusaka City Council from 26th to 30th September, 2016.
Among the items seized included polony, butter, soft drinks, processed meat and sausages, biscuits, maheu, juices, baking powder, milk and baked beans which were expired and were not labelled and therefore did not meet the mandatory product information standards set by Section 50 of the Competition and Consumer Protection Act No 24 of 2010 and the Food and Drugs Regulations under the Food and Drugs Act Cap 303 of the Laws of Zambia.
Other notable products found being sold were the Lyon Peanut Butter, a product under investigation by the Zambia Bureau of Standards (ZABS) for suspected aflatoxin contamination and potentially unsafe for consumption by Zambian consumers.
CCPC Executive Director Chilufya Sampa has expressed worry on the continued supply of expired and unsafe food products to consumers on the market and called for more concerted stakeholder efforts to stamp out the vice.
Mr. Sampa explained that the Commission has appointed 106 inspectors in 84 Councils countrywide to ensure compliance with food safety laws and regulations by traders.
“It remains the Commission’s concern that traders continue to supply expired food products with the potential to harm consumers. The Commission would like to warn traders who have a habit of selling unsuitable products and goods which have exceeded their shelf life period to desist from engaging in such trade practices as they risk being prosecuted through the Courts of Law,” he warned.
The Commission would like to advise consumers to take time to read and understand the information that is provided on labels for various products before making a purchasing decision. The consequences of not reading the information provided for on the label can be detrimental and to some extent fatal. Consumers that encounter such violations must report to Public Health Offices of all district, Municipal and City Councils. Alternatively, they can report to the Commission on Toll Free line 5678.