Global consumer movement sets out conditions for a new financial order

· Consumer education not enough, protection is vital

· Measures to restrict emerging monopolies needed

· Ringfence retail banking to protect consumer deposits

· No bailouts without essential services investment obligations

Consumers International (CI), the global federation of consumer organisations, today set out its solutions to the financial fix calling for effective, affirmative, preventative consumer protection as an essential foundation for moving beyond the economic crisis.

Following worldwide consultation with its membership, CI is submitting its position to the UN Conference on the World Financial Crisis, 24-26 June. This follows ongoing contributions to the UN’s Stiglitz Committee and the OECD.

Joost Martens, Director General of Consumers International, stated that “While CI research has shown most consumers manage their finances responsibly, they have been unfairly blamed by governments, media and industry for creating this crisis through irresponsible borrowing, and then prolonging it through insufficient spending. It is high time the so-called experts start listening to consumers, rather than blaming them for the mess the bankers and governments have created.”

In mapping out the consumer movement’s call for a new financial order, CI argues that the financial crisis began with a failure to protect consumers from bad loans in the US and other mortgage markets. A viable fix for the global economy must include greater regulatory oversight of a far more transparent banking industry.

However, whilst transparency is important, more information for consumers is not enough. The system is simply too complex at present and needs regulatory intervention to remove incomprehensible financial products and services.

Robin Simpson, Senior Policy Advisor at Consumers International, has hinted that “Consumer education is a right, but avoiding financial ruin in the current climate takes more than access to information. No doubt the clients of Bernie Madoff thought their money was in good hands, but the billions he embezzled shows we are all susceptible to the faults in the financial system. Better law, as well as better understanding, is needed”.

The meltdown of the financial industry has also led to bank mergers being hurried through by competition authorities. CI is gravely concerned that the banking monopolies emerging from this crisis pose a danger to consumer choice and protection. We therefore call for strict monitoring and reporting requirements to be established to ensure the new financial services landscape works for the consumer.

There must also be a clear distinction between retail and investment banking activities. Only then can consumer deposits be protected from the irresponsible behaviour and risky speculation of the investment bankers.

CI is also concerned that the current seizure of bank activity is denying millions of poor consumers access to basic bank account services and starving critical public utility developments of investment. This is of particular concern in the developing world where the flow of funds is a vital means of achieving improved consumer access to electricity, water, sanitation and financial services.

CI is therefore demanding that taxpayer bailouts come with mandatory obligations to provide basic consumer banking services and investment in major social infrastructure projects.

According to Robin Simpson “The banking sector has elbowed its way to the front of the public expenditure queue as a result of the threat of collapse, effectively holding a gun to the head of government. They cannot simply swallow taxpayer money and carry on as before; firm commitments to provide for basic consumer needs and services must accompany these bailouts. ”

For more on CI’s work in this area, visit www.consumersinternational.org/financialcrisis

CONSUMER ALERT!!!: Stamina-Rx Dietary Supplement Recalled Nationwide

Unapproved Ingredient Present in Supplement

Food and Drug Administration (FDA) and Hi-Tech Pharmaceuticals notified patients and healthcare professionals of a nationwide recall of all product sold under the name Stamina-Rx. FDA lab analysis found that the product contained the undeclared ingredient − benzamidenafil. Benzamidenafil is in the same therapeutic class of active pharmaceutical ingredients that are FDA-approved for the treatment of erectile dysfunction (ED).

Benzamidenafil is not FDA-approved, and poses a threat to consumers because benzamidenafil may interact with nitrates found in some prescription drugs (such as nitroglycerin) and may lower blood pressure to dangerous levels. Consumers with diabetes, high blood pressure, high cholesterol, or heart disease often take nitrates and may be most susceptible to adverse effects from this product.

Stamina-Rx is sold predominantly in health food and drug stores nationwide. Customers who have this product in their possession should stop using it immediately. Any adverse events that may be related to the use of this product should be reported to Hi-Tech Pharmaceuticals, Inc., Norcross, GA 30071 at toll-free 1-888-855-7919 from 9:00 AM - 5:00 PM EST.

The public is encouraged to submit a report of any serious adverse events that occur with the use of Stamina-Rx to FDA's MedWatch Adverse Event Reporting program online at www.fda.gov/MedWatch/report.htm or by phone 1-800-FDA-1088 or by returning the postage paid FDA form 3500, which may be downloaded from www.fda.gov/MedWatch/getforms.htm by mail to MedWatch, 5600 Fishers Lane, Rockville, MD 20853-9787 or fax 1-800-FDA-0178.

Fake, Fake And Fake Again!

By Prof. Lade Wosornu
Saturday, 01 December 2007
http://www.newtimesonline.com/content/view/12726/222/

Fake, fake and fake again. Bogus… Imitation… Counterfeit…You see them everywhere… Currencies spare parts perfume DVDs CDs cosmetics fabric dresses shoes booze bags accessories watches brief cases suit cases cigarettes cigars diamond gold bishops priests….

What makes you think that medicines should be free of fakes? Because human lives are directly at stake?

To whom can you turn?

The barons of fake drugs (fakes for short) do not give a jot about your life or mine. Money is their craze. And, it is war out there. They, in one camp, regulators in the other. They do not care what collateral damage is done as they pursue their ill-gotten gains. If Madam Aku Shika, fish monger at Chorkor, gets shot in the cross-fire, just too bad.

Of all the chilling manifestos of these new slave traders, few can be frostier than this: "If God didn’t want them sheered, He won’t have created them sheep."

So, to whom can you turn? Concerning drug regulation systems, it has been shown that only 20 per cent of WHO member states have well-developed ones; 30 per cent have none. In any event, governments and agencies can look out for you so far, but no further. You must learn to look after yourself.

Few fakes get caught, and even fewer deaths from fakes are detected. Best of all, if they get caught, the penalties are less severe.

Fake dealers know all that. They count on all that, as they tot up their dollars but ignore the corpses off whose flesh they feed.


The individual?

What can the individual do to protect himself or herself? Not much! Madam Veronica Gargo, chair, Tsokor Vigilantes, was explaining: "Don’t blame Aku Skika. The ‘pharmacist’ took her new Cedis and gave her capsules for fever. He even said: ‘Actually, Aku, you are lucky. These are the last six capsules left."

So, Madam Gargo shrugged her shoulders and sighed: "How for do!"

She is in good company as witness this report. "In developing countries, public education is also poor. A study in Laos showed that over 60 per cent of peddlers and 80-96 per cent of consumers knew nothing about fakes."

The report adds: "Better education might not make that great a difference. Over 50 per cent of the world lack access to hospitals. A sick man is a desperate man. He will take whatever he can get." Even if it’s fake?

"Ohiafo heor nii ke djirawale." This is Gã: "The poor buy expensively!" And, some times, it would seem, they pay with their lives. But, in this corner, who is counting the dead?

This is G "The poor buy expensively!" And, some times, it would seem, they pay with their lives. But, in this corner, who is counting the dead?

Even the enlightened

What makes you think that only un-lettered stereotypes are hood-winked, conned and down-right robbed in day light? Mr. Oto Weley, faceless ‘aplanke’ and stand-by driver who, first thing in the morning, shows up at the lorry park reeking of ‘fumes’? Or, Madam Mercy Badu, dealer in second-hand beads?

Professor Dr. Dr. Kofi Bosu, PhD, MB, ChB, is current president, Skin Researchers’ Guild. (Pardon me, but the gentleman really prefers the triple appellation: professor, doctor and again doctor.) An experienced traveler, the professor-double-doctor was buying another rolex at Laguna International.

"Is it genuine?" "Fake? Sir? How? Of course…Give you good discount." "How much?"

Gerald Abu, 25, unemployed, of no fixed abode, could scent blood. "You special customer… First today. 50 per cent.... 60…75 per cent..." And so, the professor-double-doctor paid $ 500 ($1,750 in duty-free) ….Smiles…Handshakes…. Two weeks later, in James Town, the ‘gold’ started to fade and the rolex stopped.

For ‘rolex’ substitute Viagra, Multivitamins and the unending life-style products.

Source

Technology makes fakes easier to produce and the Internet speeds the pace of commerce. Sales of fakes will reach $75 billion globally in 2010, an increase of over 90 per cent from 2005.

Fakes have found a natural home in some countries. There has grown a deadly industry. The poorest nations are paying the price, where 50-70 per cent of medicines are fake (WHO). It has been called "One of the greatest atrocities of our time… Mass murder… A form of terrorism against public health…Economic sabotage."


Serious imitation, serious business

Today’s fakes are often impossible to distinguish without chemical testing. The packaging is identical to the real McCoy.

"It used to be amateurs. Now scientists have entered the fray. They can replicate products quickly, complete with perfectly copied packages in amazing detail. Mind you, the content can be boric acid, floor wax and yellow paint."

The business may be criminal. But it is serious and highly organised. The countries which house the perpetrators, also have their share of victims. "Bi ni ker enye akawor ler, ler hu ewong." This is Ga. The child who says his mom should not sleep, also shall not sleep."

See how organised crime runs their fake businesses: networks with suppliers, buyers, distributors, financiers, markets. They have CEOs and CFOs with managers for production, shipping and follow-up.

The manufacturing is a multi-step process in the same town. One factory makes the pills, another ingredients, a third labels and even holographs…Then wholesale markets across the country, followed by global distributors – overland, by air and by ship and so to Africa. Shipments tend to go through mega-ports. Why? Because, where is the safest place to conceal pebbles? Pebble beach…

They also know the markets well. Different drugs for different populations: life-style versus life-saving. There’s also a price-point differential: Expensive (fake) brand names go up to rich Texas. Fake generics and over-the-counter stuff come down to Hwidiem.

Not all economies are created equal

The big boys take care of themselves. In developed countries, the big Pharmas are Alsatians. They jealously guard their brand, their market share and customers. Not so in developing countries. Our markets are less profitable, brand loyalty is fickle and societies less litigious. So, why should they look out for the likes of us?

Tackle the roots

Efforts are being made to cut the problem off at source. Central governments are becoming more effective in the war on fakes. But, problems remain at local authorities. Rules passed in capital cities are not always enforced in Kejebi.

Take this market as an example. A city, 650,000…Six hours south of a capital. Over 30,000 wholesale distributors…Over 40,000 different types of products. Between 80 to 90 per cent are perfect fakes. A host of other businesses support the market and employees. These include hotels, night clubs, transportation and storage.

A new slave trade

If an official were to shut down the fake market, that would ruin the local economy, bankrupt businesses, raise unemployment and create social unrest. This, social unrest, is one thing governments fear most- even more than the black plague.

Therefore, cracking down on known fake cities may be too little, too late. For one thing, factories shall move to shadier, less regulated places. For another, buyers from your town and mine will pursue the loot and not allow them to be closed.

Such are the moguls of this new slave trade. And, here is their favourite value statement: "If God didn’t want them sheered, He won’t have created them sheep".

You’d better watch out for yourself.

**Lade Worsonu is a Professor in Surgery, King Faisal University, Dammam, Saudi Arabia.

Consumers International Blog: Study finds consumer groups are highly trusted in the economic downturn

Consumers International Blog: Study finds consumer groups are highly trusted in the economic downturn

Hidden Flow: The Rising Tide of European e-Waste in West Africa- GHANA

Glen Loyd's Blog: Web watchdog site shut down by Consumers Union

Glen Loyd's Blog: Web watchdog site shut down by Consumers Union

Consumer Protection: A Panacea For Shoddy Goods & Services?

by Jean Lukaz

Pundits in Ghana have always pointed fingers at the ineffectiveness of consumer protection associations in the country in the face of the proliferation of shoddy goods and services. Why consumers are thinking along these lines are a wonder. It is as if consumer protection will get into factories and offices and literally rid the country of this menace.  On the other hand, consumer activism stimulates the market to provide products, processes and services that are better and safer.

Hard or Soft Power?

Consumer protection is not about hard power, the use of physical force. It is rather on the contrary. It is about soft power: dialogue, persuasion, understanding, and joint action by consumers, producers and the government. Hard consumer power rather alienates consumers and consumer activists from the government and producers of goods and services. It is in this light that some people feel that lawyers are probably the best activists when it comes to consumer protection but let’s get this right: is consumer protection about litigation and legal threats? Consumers are generally assumed to be laymen, otherwise irrational in their thinking when they are uninformed. The aim of consumer protection is to present safe products and services in plain lay universal language that is understandable by all so that consumers will put products and services to the right use for which they were purposed.

The Weapon

Consumers are not specialists but in consumption. And the only adverse way consumers react is by way of complaints and boycott. An influx of complaints on a particular product or service is an alarm bell and a call to action. Action is not necessarily litigation, which rather ends up antagonising producers of goods and services. Action is about alerting the producer who may not even be aware of the impact of their products on consumers. Complaints, by way of feedback, arm consumers with the reason to proceed to the next level in case of inaction on the part of producers. When consumer complaints are met with arrogance and denials, industry associations are the next places to visit with the complaints. Consumers may collectively channel their complaints through a consumer protection association or other and request for feedback on the action that will be taken by the industry association within a specified timeframe. Where the industry association compromises or is ineffective, the regulator of the industry is the next point of call and consumers may well put their complaints and grievances in writing even after verbally doing so. One would ask about what to do if the regulator fails to act…in that case there is something definitely wrong with the whole process of consumer complaints management process in the industry or country. This requires a microscopic examination of the structures that have been established to give consumers their value for money. The lawsuit is the last resort if you have the money to bring commercial giants into the courtroom. It may not be worth your complaint to sue unless it is intended to generate negative publicity for the producer in order to sensitise the public about their insensitivity.

The Practicals

To put the above into practice, if you are aggrieved for buying a faulty new automobile and the seller or distributor refuses to repair or replace it, you just make sure you put your complaint or grievance into writing and copy it to a consumer protection association such as The Consumer Partnership (THE-COP). The next step is to send another letter on how you have been treated unfairly by the distributor and what action you request to the Automobile Distributors Association (if there is any), attaching a copy of your previous letter to the distributor. Make sure a copy of this letter is also sent to the consumer protection association that received your first letter (this will help them to monitor and fight on your behalf where the occasion arises). If the industry association in question compromises or does not act on your complaint after the timeframe you requested expires (unless they reply to explain) you then proceed to the regulator of the automobile industry in Ghana: I’m not sure who does…Where there is no regulator or a national consumer ombudsman, the Ministry of Trade in this case may be the next point of contact with your new complaint letter detailing the various actions you have taken that have not received any attention and what action you are requesting. Remember to copy this final letter to your correspondent consumer protection association and attach copies of all correspondence to the Ministry of Trade including relevant receipts and contracts (do not send original copies). If the Ministry fails to respond without explanation within a timeframe it is time to talk to some litigant lawyers. In Ghana the Centre for Public Interest Law (CEPIL) may be of help. They may however take a commission from your claim for their effort even if you do not pay any fees initially. Remember the media at this stage but consult the consumer protection association first as they may give your story the right twist. Other consumers will definitely need to share your experience with such an arrogant distributor so they may not fall victim to their wiles.

To Be or Not to Be?

The question under review here is: Does consumer protection bring sanity into a system? The answer may be a yes and no depending on where you are coming from. If you are coming from the USA, where industry regulation is quite effective, then Ralph Nader has already done most of the work so the answer may be a yes. If you are fortunate to come from Ghana, where regulation of industry is rather ineffective, the answer is a big NO! Consumer protection is just one of the answers and its effectiveness is dependent on a number of factors.

Competition, regulation and standards all go hand in hand in giving consumer protection a boost.

Competition forces otherwise producers of shoddy goods and services to put their best before consumers in order to win a market share. Competition, in the face of the market forces of demand and supply, keeps the best actors in business whilst phasing out the bad and ugly. Lack of competition gives consumers no alternatives to substitute shoddy goods and services for as a monopolistic environment may not be a fertile ground for consumer protection fundamentalism.

Regulation outlines legal norms for those in industry and is bound by law that is mandatorily enforced. The contents of regulations are usually a prerequisite for entry into the industry and pre-establish conformity. However, poor regulation is an epitome of a porous enforcement mechanism and corrupted enforcement agents. In a system where there is virtually no enforcement, there is usually a lack of consumer confidence and consumers may resign to their fate. Consumers in such a system will not formally complain as it ridicules them and makes a mockery of the process and will, thus, become apathetic to the activities of consumer protection associations. Complaints are then replaced with word of mouth moaning to friends and relatives. 

Standards when mandatory are part of regulation and provide an automatic platform for consumer satisfaction. Standards are ‘…rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context’ (ISO/IEC Guide 2). Standards may also be voluntary whereby members of a body establish a code of conduct to guide their operations. Recognition may be in the form of the use of a well-recognised quality mark or trustmark. Companies and individuals use and adhere to standards voluntarily, or because they are required to by law. When compliance with a standard is not mandated by law, companies and individuals follow the terms of the standards simply because it is in their interest to do so — standards improve the quality of products, processes or services, reassure customers and open up markets. The terms of standards may also be incorporated into government statutes and regulations, in which case companies and individuals must follow them as a matter of law. In some cases, governments initiate and participate in standards development so the standard can be included in legislation. In other cases, governments find that an existing standard can be used to deal with a public policy problem and include it in new legislation.

Complaints, in the face of standards, are also endemic in an environment characterised by corruption, non-conformity and non-enforcement of standards. Consumers, acting rationally, would want the best products and services at the least cost that is readily available. Thus, consumers would look out for certain elements that have been traditionally infused into standards such as health and safety, fitness for purpose (performance), product information and labelling, environmental protection, fair pricing, interoperability (ability of a product to be used in different countries and within a product range) and systems of redress. However, oblivious to the prevalence of shoddy goods and services, consumers may also presume that all products and services on offer are safe for their use- a danger to their health and safety.

So if you find yourself in a country where competition is virtually non-existent, regulation lacks enforcement and where standards are not really working, the only way forward is consumer participation in standardization. When consumers are represented in the standards-making process, their views are taken into account and it subsequently forms an automatic basis for consumer satisfactions albeit this will still require a stringent enforcement mechanism to be manifest.

Consumer participation is also beneficial for manufacturers, because goods and services that adopt standards developed with consumer participation may be more easily accepted in the marketplace.

 

Published in Public Agenda on 11th December, 2006: www.ghanaweb.com/public_agenda

http://www.theconsumerpartnership.org