CFTC fines and refunds total of K11.89 million for cases it has adjudicated of anti-competitive business practices and unfair trading conduct

At its 61st meeting on March 28, the Competition and Fair Trading Commission (CFTC) considered and adjudicated over a total of 69 cases, which included 55 cases of unfair trading practices and 14 cases on anti-competitive business practices.

At a press conference in Blantyre on Wednesday — held by acting Executive Director, Apoche Itimu in the company of chief analyst for consumer affairs, Augustine Nyirenda — CFTC said they have since ordered companies to pay fines and refund a total K11.89 million, for committing different offences under the Competition and Fair Trading Act (CFTA).

On the cases of unfair cases include allegations on unconscionable conduct by Old Mutual Pension Services Company Limited; supply of products likely to cause injury or harm to consumers by Peoples Trading Centre; misleading and unconscionable conduct by King Steel Limited; unconscionable conduct and misuse of market power by Central Poultry (2000) Limited.

Other offences were alleged misleading conduct, insufficient labelling and supply of products likely to cause injury to health or physical harm to consumers by Chipiku Plus; supply of product which is likely to cause injury to health or physical harm to consumers by Suncrest Creameries Limited; unconscionable conduct by Vanguard Life Assurance Company; misleading conduct and unconscionable conduct by Platinum Finance Limited as well as alleged unconscionable conduct against 15 private schools.

On Old Mutual Pension Services Company Limited, Itimu said the complainant alleged that terms and conditions of the Protektor account included that after two years, would allow him to withdraw 50% of the account’s total amount upon maturity in September, 2021.

“However, the respondent informed the complainant that he could no longer withdraw the 50% as to do so would violate the Pensions Act 2011 and following deliberation, the Commission found that the Respondent’s assertion was correct but that the Respondent erred in not having provided the complainant with that information in 2011 when the Pensions Act was enacted.

“The Commission thus ordered the Respondent to pay a fine of K500,000 for engaging in unconscionable conduct.”

On Peoples Trading Centre, there were allegations of supply of products likely to cause injury or harm to consumers and following findings of a market inspection it was found that the Respondent was stocking recalled Tiger Brands canned vegetable products — specifically, KOO, Hugo’s and Helderberg canned vegetable products at one of its supermarkets at Lilongwe Shopping Mall in spite of the manufacturer’s product recall which was also communicated to the public by CFTC.

Following deliberation, the CFTC found the respondent liable and ordered to pay a fine of K500,000 for supply of products which are likely to cause injury to health or physical harm to consumers.

PTC was also fined K500,000 “for failure to comply with a directive or order lawfully given, or any requirement lawfully imposed under the CFTA”.

King Steel Limited was found that on May 10, 2020, a complainant purchased 28 iron sheets from its shop in Lilongwe at K885,000, who indicated not to collect the iron sheets immediately, and hence agreed with the supplier to keep the products at their premises.

“When the complainant later went to collect his iron sheets, the respondent refused to give him the iron sheets citing that it had taken too long for him to collect the iron sheets and yet no time frame was ever agreed between the Parties.

“Following deliberation, the Commission found the Respondent liable and issued the following orders against the Respondent — to give the complainant all the 28 iron sheets that he purchased and duly paid for” and to “pay a fine of MK500,000 for engaging in unconscionable conduct in the trade of goods and services”.

The supplier was also fined K500,000 for failing to cooperate with the Commission during its investigations.

Investigations on Central Poultry (2000) Limited were from two complainants in which one complainant ordered 160 day-old chicks at a total cost of K104,000 and paid a deposit of K90,000.

“When she went to collect the chicks, Central Poultry requested her to pay a top-up amount of MK8,000 on the premise that the Respondent had increased prices.

“Another complainant ordered 110 broiler chicks from Central Poultry and paid a total sum of K66,000. However, prior to the agreed date of collection, Central Poultry requested her to make an additional payment of K11,000.00, also on the premise that the price had increased.”

The Commission found Central Poultry not liable for unconscionable conduct but found it liable for misuse of market power — thus ordered it to refund the first complainant a total sum of K8,000 and the second complainant a total sum of K11,000.

Central Poultry was also fined K500,000 for engaging in abuse of market power or market dominance.

Central Poultry was also investigated on misleading conduct in which it was selling bags of poultry feed which were grossly underweight and following deliberation, the Commission found it liable and ordered to pay a fine of K500,000.

Chipiku Plus was found of stocking ORI Vienna Cocktails, “which were potentially harmful products which did not comply with consumer safety standards and product labelling standards as they had two different labels with different packaging dates on them”.

It was fined K500,000 for engaging in misleading conduct and a further

K500,000 for supplying products that are likely to cause injury or physical harm to consumers.

Suncrest Creameries Limited were alleged to have been supplying a product likely to cause injury or physical harm to consumers; that on December 2, 2020, the complainant in the matter purchased packets of 250mls ‘Long Life Full Cream UHT Milk’ in Lunzu which was bitter and sour to taste, with black insects inside.

“The conformance tests conducted on the product by Malawi Bureau of Standards (MBS) revealed that the milk product had a microbial contamination, which made it unsafe for human consumption.

“The Commission also found that the Respondent silently recalled the product from the market which was tacit acknowledgement that indeed the product was defective and unsafe for human consumption — found liable and fined K500,000 — for supplying products which are likely to cause injury to health or physical harm to consumers, and products that do not meet consumer safety standards.”

Suncrest Creameries were also fined K500,000 for being uncooperative with the Commission’s investigations.

Vanguard Life Assurance was found by the Commission that it had a ‘Cash Builder Policy’ with the complainant covering a period between November 1, 2008 to November 1, 2018 and that pon the maturity of the policy, the complainant wanted to cash out.

Vanguard Life Assurance is alleged to have declined on the grounds that the maturity date on the policy was an error and was instead supposed to mature in year 2030 in compliance with the Pensions Act (2011) Amendment.

“The Commission found that cashing out the policy would be in violation of the Pensions Act but that the Respondent should have communicated to the Complainant the implications of the Pensions Act in 2011.

“Following deliberation, the Commission found the Respondent liable for unconscionable conduct and ordered the Respondent to pay a fine of K500,000 for engaging in unconscionable conduct.”

On Platinum Finance Limited, the complainant purchased a King Corolla motor vehicle at K2,800,000 but after two weeks the buyer was informed that the car he had purchased belonged to another client and hence he was supposed to return it.

“The Complainant chose that he be refunded of his money. However, instead of making a full refund to the Complainant, the Respondent indicated that they would be refunding him MK500,000.00 every month up until the whole amount was paid back.

“The Complainant refused this arrangement, and demanded an immediate full refund” and the Commission found Platinum Finance Limited liable and ordered to pay a fine of K500,000 “for engaging in misleading conduct and unconscionable conduct”.

The alleged unconscionable conduct against the 15 private schools were for Chisapi; King’s Foundation; Lilongwe Pentecostal Church Christian School; Stance Independent Primary; Michaels Primary; (6) Kirk Range; (7) Maranatha Boys Academy; Kawale SDA Primary; Haven Modern Academy; Nkhotakota Private; Athens; Nzeru; Hope Christian; St Paul’s Minor Seminary and Nazarene Christian.

Between August and September 2021, the CFTC received several complaints against the schools that they demanded for payment of full school fees for third term even though students would be staying at the school for a very short period.

And also withholding of MANEB examination IDs for students whose parents and guardians did not complete payment of school fees.

The Commission found that “there is justification for demanding full school fees regardless of the amount of time the candidates were to attend classes”.

“This is based on the consideration that the school operations costs are dominated by fixed costs that remain payable regardless of the length of the term or the number of students at school.

“There was thus no conclusive evidence that the conduct of demanding full school fees amounted to unconscionable conduct.

But “the conduct of withholding MANEB IDs was not reasonable and neither was it justifiable by law as such the conduct was unfair towards the students; and an infringement of their rights as consumers and was therefore in contravention of Section 43(1)(g) of the CFTA.

“Out of the 15 schools investigated, the Commission found that all the schools (except two) engaged in the conduct of demanding full school fees for the third term.

“On 11 of the schools, the Commission did not find exclusive evidence that they engaged in the conduct of withholding MANEB examination IDs for students that had not completed paying school fees” found that 2 did it — Athens Private School and Hope Christian School.

“The schools were thus found liable of unconscionable conduct, contrary to section 43(1)(g) of the CFTC [and] In view of the findings, the Commission issued orders for the said schools to cease and desist from engaging in such conduct.”

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