Forward Planning: Fair Business Practices Act need of the hour

I wouldn't be exaggerating if I said that we are in a desperate need for a Fair Business Practices Act, ensuring the protection of both the consumers and legitimate business enterprises.

This type of law prohibits "unfair or deceptive acts and practices" in all trade or commerce transactions. One example in the US is the Georgia State Fair Business Practices Act which promotes principles of ethical business conduct.

The act gives specific provisions regarding solicitation through telephone directory listings, home health services, promotional giveaways and contents, going-out-of-business sales, career counseling firms and misuse of credit cards by merchants.

Other states have included dangerous products designs and safety hazards, warning requirement and other unfair or deceptive acts or practices by banks, insurance companies, realtors, mortgage companies and many types of businesses and professionals.

The law statute is limited to transactions which effect the public interest at large rather than private transactions like selling a used car or a home. The office of consumer affairs is responsible to investigate, take an administrative action and stop unfair or deceptive practices.

Unlawful

The law clearly declares that unfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce are declared unlawful.

Examples are: disparaging goods, services, or business of another by false or misleading representation; making false or misleading statements concerning the reasons for, existence of, or amounts of price reduction; causing actual confusion or actual misunderstanding as to the source, sponsorship, approval, or certification of goods or services; representing that goods are original or new when they are deteriorated, reconditioned, reclaimed, used or secondhand; advertising goods or services with intent not to sell them as advertised; etc.

Another type of consumer protection law is the Fair Debt Collection Practices Act which recognises the abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many collectors which contribute to the number of personal bankruptcies, marital disabilities, losses of jobs, and invasions of individual privacy.

In June 2003 the Commission of the EU adopted a proposal for Directive on Unfair Commercial Practices. The aim was to make the EU's 380 million consumers' rights clearer and cross-border trade simpler.

Misleading

Australia's existing laws and Fair Business Practices clearly state that businesses should adopt fair practices when dealing with consumers and should not engage in conduct that is misleading or deceptive or likely to mislead or deceive; not to make false or misleading representations about the goods or services they supply; ensure that any goods supplied correspond to their description; that goods supplied are of merchantable quality; etc.

In Canada the Fair Business Practice Branch of the Competition Bureau is the federal organisation responsible for promoting fair competition in the marketplace by discouraging deceptive practices and by encouraging the provision of accurate and sufficient information to enable consumer choice.

The French Business Practices Act of 1990 identifies unfair practices as false, misleading or deceptive consumer representations including: goods or services misrepresentation; the availability of good or services for reasons that do not exist; services or parts presented as needed when they are not; a supposed specific price advantage which does not exist; false identity or authority of the sales person; and many others.

These are examples of Fair Business Practices Acts existing in many advanced countries. It doesn't mean that these countries are free from abuse, but at least consumers' rights and interests are protected by the law.

People who think that they can make a buck here and there by any means, victimising innocent consumers and other businesses in the process, must be stopped. I realise that local economic development departments in some Emirates have a consumer protection and reporting section, but this is not sufficient and only a comprehensive act for the enhancement of fair business practices and consumer protection and its strict application can control this wrong doing.

The writer is a UAE-based insurance consultant and director of Gulf Insurance Consulting.