MASM punished by Fair Trade Commission for deceiving Malawians: Fined K5mil
Malawi’s leading medical scheme provider, Medical Aid Society of Malawi (MASM) has been penalized by the Competition and Fair Trade Commission (CFTC) Malawi for deceiving Malawians that it has scrapped off shortfalls on medical bills.
MASM has been running adverts in both print and electronic media, claiming that they had scrapped off shortfalls on medical bills to its members when it did not.
Investigations by the Commission did not find any evidence to support claims that shortfalls had indeed been scrapped off. Instead, the Commission found that, contrary to the claims in the adverts, a number of private hospitals were demanding payment of shortfalls by MASM members on every visit.
CFTC Chairperson, Daniel Dunga on Thursday bemoaned the company’s behavior, labeling it as “deceptive and a deliberate ploy intended to create an impression that the medical cover was free of additional charges.”
“Further, the Commission found that MASM did not make full disclosures on the introduction of wallets for the different services offered and its implications on members’ welfare,” explained Dunga in a statement made available to Nyasa Times.
Meanwhile, CFTC has ordered MASM to cease and desist from engaging in misleading advertising and to make full and timely disclosures to their consumers whenever there are changes to the terms and conditions governing medical insurance.
Deceptive advertising is punishable offence under the Consumer Protection Act (2003) Section 44 (2) which states that “Any advertiser who puts an advertisement that constitutes a false or misleading offer or promotion of technology, goods, activities or services shall be guilty of fraud”.
In related development, CFTC during the same meeting also agreed to fine ETG Parrogate Cotton Limited for supplying products which do not comply with labeling standards.
The Commission imposed a fine of K5 million to ETG Parrogate Cotton Limited for supplying products which did not comply with prescribed labeling standards and failing to comply with the interim Cease and Desist Orders issued by the Commission.
CFTC established that ETG Parrogate Cotton Ltd branch in Zomba was selling edible cooking oil Purola in 200 litre drums and 20 litre containers which did not provide expiry dates for the product, and that the containers and the selling premises were generally dirty and unhygienic.
Capital Oil Refining Industries Limited has also been fined K2million for supplying products which do not comply with labeling standards.
CORI Limited through branches in Ntcheu, Liwonde and Zomba were selling edible cooking oil of Kukoma, Palm Oil and Bwiti-Bwiti brands 200 litre drums and 20 litre containers which did not provide expiry dates for the product, and the containers and the selling premises were very generally dirty and unhygienic.
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MASM deserves a stiffer penalty by deceiving Malawians. In January 2017 they adjusted their tariffs by 20% as a cushion measure for much touted NO SHORTFALL. Come September 2017 they have increased their tariffs by 25%. In total MASM has increased its tariffs by a whooping 45%. Worse still, MASM has reinstated the shortfall and denying its clients access to good health by limiting itself to cheap drugs. In my view, K500 Million penalty is going to be appropriate or just ban MASM from operating in Malawi.
Bravo CFTC but the fines are very paltry comparing to what the companies reaped. Please revise the penalties in order to deter others from reaping unsuspecting customers.
At least we have an institution that can show seriousness in enforcing regulations. The fine may be too little for an organization of MASM’s caliber but it will surely put a dent in its corporate image. MASM has been taking Malawians for granted for a long time. Vuto ilibe ma competitor ndiye ikumadzifila kwambiri. BRAVO CFTC.
What is K5 million to an organisation like MASM? Would this small amount deter it or other organisations from commiting a similar offense in future? You are joking CFTC!!
kkkkkkkk a MBS KKKKK Akukugwirilani ntchitotu apa kkkkk tulo
For MASM yes but the cooking oil companies is that not a mandate of Malawi Bureau of Standards? ??
Is this against that the MBS is sleeping?
Job well-done, protect Malawians please. Congratulation continue doing the good job CFTC.