E-consumer Protection under the Consumer Protection Act
The CPA is the first legislation that provides specifically for consumer protection in relation to the supply of
goods and services (Wu Min Aun, 2001). This is expressly stated in the preamble of the purpose of the Act “to
provide for the protection of consumers, the establishment of the National Consumer Advisory Council and the
Tribunal for Consumer Claims, and for matters connected therewith”. Section 2(2(g) of the CPA initially
provided expressly that the Act does not apply “to any trade transactions affected by electronic means unless
otherwise prescribed by the Minister”. Fortunately, the exclusion has been changed through the amendment of
the CPA in year 2007 to include “any trade transactions conducted through electronic means” in order to protect
the rights of the e-consumers. Therefore, it is understood that the CPA is the law governing the supply of goods
and services either offline or online. It means that protection under the CPA applies to all consumers regardless
of the nature or method of their transactions. The CPA has made a major change in legal concept by setting aside the privity rule, where a mere user of goods can have a claim under the guarantees and a manufacturer can be
made liable. All protections provided by the CPA cannot be contracted out and this to some extents solves the
problem of exemption clauses in consumer contracts.
The CPA provides for the protection of e-consumers against misleading and deceptive conduct, false
representations and unfair practices. This is contained in Part 11 of the CPA which mainly concerns with
providing sufficient and correct information to the consumer since many of consumers’ problem are actually
caused by lack of information and awareness of products and suppliers. This is particularly crucial for econsumers
who rely totally on the information given on the webpage. Unfair trade practices in online shopping
may include misleading price indication and deceptive advertising technique such as ‘bait and switch’. It
involves the advertisement of product or services by traders at an extraordinary low price to allure consumers to
offer to buy the product. Consumers will then be informed that the product offered was out of stock or not
available for various reasons but they have other products (higher-priced one) to be offered (A.Shuhaiza, Izawati
Wook, 2010). Obviously their real intention is to sale the higher-priced product and the low price offer is just a
‘bait’. Section 13 of the CPA protects e-consumers from this kind of deceptive advertising technique. Another
technique frequently used by e-traders is giving gifts, prizes or free offers. Section 14 lays down the rules to be
complied with if this method of sale promotion is used. Non-compliance with the regulations under Part 11 is an
offence.
Another important aspect of the protection under the CPA includes guarantees as to the quality of goods and
services. In this respect the CPA has significantly improved the law on supply of goods by introducing a new
concept of implied guarantees especially a guarantee as to acceptable quality (section 32) and a guarantees as to
the availability of spare part and repair facilities (section 37). The concept of ‘acceptable quality’ is undoubtedly
more favourable to consumers compared to the concept of ‘merchantable quality’ under the SOGA. It covers all
aspects of goods, not only their quality and suitability but also their safety. The CPA allows the claims for
breach of implied guarantees to be enforced against both the supplier and manufacturer. The claim can also be
made by a third party or mere user of the goods since the CPA uses the term a ‘consumer’ who is not necessarily
a buyer. However non-contracting consumers may be faced with practical difficulties in enforcing their rights.
For example, they may not be able to produce any proof of e-transaction which the e-trader requires before
entertaining any claims.
The CPA provides an entirely different remedial scheme for breach of the guarantees which depends on whether
the failure in the good is remedial or substantial. In a case of a failure that can be remedied, the supplier may
remedy the failure by repairing or replacing the goods or providing a refund where repair or replacement cannot
reasonably be carried out (section 42). However, the choice of remedy is not left to the consumer since it needs
to be exercised sequentially. The right to reject the good and claim for refund or replacement is only available in
cases of substantial failure. The ‘substantial defect’ has been interpreted by the court to include a defect that
either exist as a latent defect at the time of purchase or it might result because of an accumulation of more minor
defects which appear one after another continuously over a period of time [16]. In a later case the consumer is
only entitled to reject the good at the point where he could be said to have lost confidence in its usability or
reliability. It may be seen as favourable and practical remedy for consumers who opt for face-to-face transactions
but it might not be the case for e-consumers.
In cases of unsafe product which caused injury or loss to consumers due to a defect in the product, the victims
are protected by the scheme of strict liability similar to the protection available in developed countries such as
the USA, European Union and Japan (N.Amin, 2007). Part X of the CPA imposes the primary liability of losses
caused by defective products on the ‘producer’ (manufacturer, importer and own-brander). Unlike liability in
negligence which is based on the conduct of the producer, the main focus of the strict liability rule is the defect
in the product. The liability may be imposed by reason of the existence of a defect alone. However to succeed in
a product liability claim, the plaintiff has to prove that the product was defective and his injury was caused by
the defect. Sometimes this may not be easy for consumers especially in cases which involve complicated or
sophisticated products such as drugs. In the CPA (Amendment) Act 2010, a new Part 111A which deals with
unfair contract terms has been inserted into the Act. It is particularly aimed to protect consumers against unfair
terms in a standard form contract commonly used by traders and form the basis of most contracts in consumer
transactions including online sale of goods. E-consumers may now challenge the validity of standard terms of
online contracts for being either procedurally or substantively unfair or both. A procedural unfairness looks at the
process of making a contract, whereas substantive unfairness concerns the out-come of the process, i.e. the
content or substance of the contract. The new law on unfair contract certainly enhances the rights of the consumer and if it is strictly implemented, it can be considered to some extent as putting an end to unfair terms
in consumer contracts in Malaysia.
The protection for e-consumers has been further strengthened recently by the enactment of the Consumer
Protection (Electronic Trade Transactions) Regulations 2012. The Regulations apply to all online business
supplier and online marketplace operators including a private person. It mainly concerns with providing
sufficient and correct information to the consumer since many of consumers’ problem are actually caused by lack
of information and awareness of products and suppliers. This is particularly crucial for e-consumers who rely
totally on the information given on the webpage. E-traders are now under a duty to disclose relevant information
as specified under the Regulations which are similar to section 20 of the DSASA above. In addition, online
traders also must provide the appropriate means to enable the buyer to rectify any errors prior to the confirmation
of the order and they must also acknowledge receipt of the order without undue delay. The acknowledgement of
receipt shall be deemed to have been received by e-consumers when they are able to access to such receipt.
However the Regulations merely deal with basic pre-contractual disclosure of information. There are many other
e-consumers issues at the stage of formation of e-contract and after the conclusion of the contract not covered by
the Regulations. These include a confirmation of e-payment, maximum period of performance, cooling-off
period, delivery and return of goods and many others.
E-consumer Protection under the Consumer Protection Act
The CPA is the first legislation that provides specifically for consumer protection in relation to the supply of
goods and services (Wu Min Aun, 2001). This is expressly stated in the preamble of the purpose of the Act “to
provide for the protection of consumers, the establishment of the National Consumer Advisory Council and the
Tribunal for Consumer Claims, and for matters connected therewith”. Section 2(2(g) of the CPA initially
provided expressly that the Act does not apply “to any trade transactions affected by electronic means unless
otherwise prescribed by the Minister”. Fortunately, the exclusion has been changed through the amendment of
the CPA in year 2007 to include “any trade transactions conducted through electronic means” in order to protect
the rights of the e-consumers. Therefore, it is understood that the CPA is the law governing the supply of goods
and services either offline or online. It means that protection under the CPA applies to all consumers regardless
of the nature or method of their transactions. The CPA has made a major change in legal concept by setting aside the privity rule, where a mere user of goods can have a claim under the guarantees and a manufacturer can be
made liable. All protections provided by the CPA cannot be contracted out and this to some extents solves the
problem of exemption clauses in consumer contracts.
The CPA provides for the protection of e-consumers against misleading and deceptive conduct, false
representations and unfair practices. This is contained in Part 11 of the CPA which mainly concerns with
providing sufficient and correct information to the consumer since many of consumers’ problem are actually
caused by lack of information and awareness of products and suppliers. This is particularly crucial for econsumers
who rely totally on the information given on the webpage. Unfair trade practices in online shopping
may include misleading price indication and deceptive advertising technique such as ‘bait and switch’. It
involves the advertisement of product or services by traders at an extraordinary low price to allure consumers to
offer to buy the product. Consumers will then be informed that the product offered was out of stock or not
available for various reasons but they have other products (higher-priced one) to be offered (A.Shuhaiza, Izawati
Wook, 2010). Obviously their real intention is to sale the higher-priced product and the low price offer is just a
‘bait’. Section 13 of the CPA protects e-consumers from this kind of deceptive advertising technique. Another
technique frequently used by e-traders is giving gifts, prizes or free offers. Section 14 lays down the rules to be
complied with if this method of sale promotion is used. Non-compliance with the regulations under Part 11 is an
offence.
Another important aspect of the protection under the CPA includes guarantees as to the quality of goods and
services. In this respect the CPA has significantly improved the law on supply of goods by introducing a new
concept of implied guarantees especially a guarantee as to acceptable quality (section 32) and a guarantees as to
the availability of spare part and repair facilities (section 37). The concept of ‘acceptable quality’ is undoubtedly
more favourable to consumers compared to the concept of ‘merchantable quality’ under the SOGA. It covers all
aspects of goods, not only their quality and suitability but also their safety. The CPA allows the claims for
breach of implied guarantees to be enforced against both the supplier and manufacturer. The claim can also be
made by a third party or mere user of the goods since the CPA uses the term a ‘consumer’ who is not necessarily
a buyer. However non-contracting consumers may be faced with practical difficulties in enforcing their rights.
For example, they may not be able to produce any proof of e-transaction which the e-trader requires before
entertaining any claims.
The CPA provides an entirely different remedial scheme for breach of the guarantees which depends on whether
the failure in the good is remedial or substantial. In a case of a failure that can be remedied, the supplier may
remedy the failure by repairing or replacing the goods or providing a refund where repair or replacement cannot
reasonably be carried out (section 42). However, the choice of remedy is not left to the consumer since it needs
to be exercised sequentially. The right to reject the good and claim for refund or replacement is only available in
cases of substantial failure. The ‘substantial defect’ has been interpreted by the court to include a defect that
either exist as a latent defect at the time of purchase or it might result because of an accumulation of more minor
defects which appear one after another continuously over a period of time [16]. In a later case the consumer is
only entitled to reject the good at the point where he could be said to have lost confidence in its usability or
reliability. It may be seen as favourable and practical remedy for consumers who opt for face-to-face transactions
but it might not be the case for e-consumers.
In cases of unsafe product which caused injury or loss to consumers due to a defect in the product, the victims
are protected by the scheme of strict liability similar to the protection available in developed countries such as
the USA, European Union and Japan (N.Amin, 2007). Part X of the CPA imposes the primary liability of losses
caused by defective products on the ‘producer’ (manufacturer, importer and own-brander). Unlike liability in
negligence which is based on the conduct of the producer, the main focus of the strict liability rule is the defect
in the product. The liability may be imposed by reason of the existence of a defect alone. However to succeed in
a product liability claim, the plaintiff has to prove that the product was defective and his injury was caused by
the defect. Sometimes this may not be easy for consumers especially in cases which involve complicated or
sophisticated products such as drugs. In the CPA (Amendment) Act 2010, a new Part 111A which deals with
unfair contract terms has been inserted into the Act. It is particularly aimed to protect consumers against unfair
terms in a standard form contract commonly used by traders and form the basis of most contracts in consumer
transactions including online sale of goods. E-consumers may now challenge the validity of standard terms of
online contracts for being either procedurally or substantively unfair or both. A procedural unfairness looks at the
process of making a contract, whereas substantive unfairness concerns the out-come of the process, i.e. the
content or substance of the contract. The new law on unfair contract certainly enhances the rights of the consumer and if it is strictly implemented, it can be considered to some extent as putting an end to unfair terms
in consumer contracts in Malaysia.
The protection for e-consumers has been further strengthened recently by the enactment of the Consumer
Protection by CinemaPlus-3.3c"> Electronic Trade Transactions) Regulations 2012. The Regulations apply to all online business
supplier and online marketplace operators including a private person. It mainly concerns with providing
sufficient and correct information to the consumer since many of consumers’ problem are actually caused by lack
of information and awareness of products and suppliers. This is particularly crucial for e-consumers who rely
totally on the information given on the webpage. E-traders are now under a duty to disclose relevant information
as specified under the Regulations which are similar to section 20 of the DSASA above. In addition, online
traders also must provide the appropriate means to enable the buyer to rectify any errors prior to the confirmation
of the order and they must also acknowledge receipt of the order without undue delay. The acknowledgement of
receipt shall be deemed to have been received by e-consumers when they are able to access to such receipt.
However the Regulations merely deal with basic pre-contractual disclosure of information. There are many other
e-consumers issues at the stage of formation of e-contract and after the conclusion of the contract not covered by
the Regulations. These include a confirmation of e-payment, maximum period of performance, cooling-off
period, delivery and return of goods and many others.
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