There are four main laws in Bermuda that govern business activities of consumer good and service providers and how they interact with consumers.
These consumer protection laws exist to make sure that commercial enterprises offering consumer goods and services operate fairly with their consumers. The legislative framework governing the regulatory operations of Consumer Affairs serves to not only ensure that consumer rights are protected but promotes effective commercial competition and restricts commercial enterprises from partaking in disreputable business practices.
If a business does not abide by these laws Consumer Affairs has the discretion to refer affected consumers to the Department of Public Prosecutions (the "DPP"). If a commercial enterprise if found operating in violation of Bermuda's consumer protection framework, upon receiving a referral from Consumer Affairs the DPP has the authority to impose financial penalties and/or impose period of imprisonment if the nature of the commercial enterprise's illegal activities are severe enough to warrant the imposition of such a penalty.
The Consumer Protection Act 1999 protects consumers from unfair business practices, unconscionable acts and unsafe consumer goods. Under the Consumer Protection Act 1999 a consumer good is defined as a good which is ordinarily intended for private use of consumption, except:
Under the Consumer Protection Act 1999 a "consumer" is defined as being a person to whom goods or services are or may be supplied but does not include a person who receives the goods or services in the course of a business carried on by him. Consequently, Consumer Affairs is restricted from providing regulatory support in instances where both parties to the matter are commercial entities.
Under the Consumer Protection Act 1999 the definition of a “good” excludes “choses in action”, money and securities as defined in the Investment Business Act 1998.
Consumer Affairs does not have legal authority to supervise, monitor or regulate the above mentioned exempted consumer goods and services and financial service providers. In response to any complaints received regarding financial service providers, Consumer Affairs will attempt to assist in the matter and refer the complaint to the Bermuda Monetary Authority.
Although the Consumer Protection Act 1999 does not restrict Consumer Affairs from regulating Bermuda’s electricity and electronic communications service providers, Consumer Affairs will attempt to assist in any complaints received and will refer the complaint to the Regulatory Authority of Bermuda.
Under section 11(a) of the Consumer Protection Act 1999, “unfair business practices” are defined as false, misleading or deceptive consumer representations which are intended to influence a consumer to purchase a consumer goods and/or service. A false, misleading or deceptive consumer representation includes:
Appreciating that “unfair business practices” are typically accompanied by an “unconscionable consumer representation” in order to influence a consumer to purchase a consumer good or service, section 11(b) of the Consumer Protection Act 1999 provides further clarity on what is meant by “unconscionable”.
The Consumer Protection Act 1999 states that an unconscionable representation occurs when a commercial entity knowingly makes a false or misleading statement regarding a consumer good or service. The Consumer Protection Act 1999 makes this distinction as there may be circumstances where a commercial entity accidentally participates in unfair trade practices.
Unconscionable acts can be just as damaging and include excessively one-sided contracts that benefit only the trader, grossly overpriced products and entering into a contract with a consumer who you know lacks the capacity to understand it
It is important to take note that an “unconscionable consumer representation”, as defined under section 11(b) of the Consumer Protection Act 1999, considers whether the person making a representation of a consumer good and/or consumer service, or his employer, knows or ought to know:
When determining the existence of an “unconscionable consumer representation”, in addition to considering section 11(b) of the Consumer Protection Act 1999, section 11(c) dictates that there must be consideration as to whether or not the person making the unconscionable consumer representation:
The offer to provide consumer goods is an “invite to treat” where one party offers to provide another party a specified consumer good in accordance with agreed terms and conditions.
Upon acceptance of the terms and conditions, and once money has been exchanged, or has money has been agreed to be exchanged in the future, a contract has been formed between both parties.
Whenever goods are bought, pursuant to an agreed contract, the consumer good or service must conform to the terms and conditions specified in the consumer contract. It is the responsibility of the seller, not the manufacturer, to ensure that the consumer good or service satisfies the terms and conditions agreed to by the buyer.
If the consumer goods or services do not conform to the terms and conditions specified in the consumer contract at the time of sale (i.e., are faulty), consumers can request to have their money returned within a “reasonable period of time”.
Under the Sale of Goods (Amendment) Act 2002, a “reasonable period of time” is undefined and will depend on the circumstances.
If a part of the goods does not conform to contract, then the consumer can reject those goods that do not conform and keep those that do, and thus be entitled to compensation for those goods that don’t.
The Sale of Goods (Amendment) Act 2002 provides consumers with a warranty when one is not offered by the commercial enterprise that sold the consumer goods or service.
Under the Supply of Services (Implied Terms) Act 2003 a supplier of a consumer service must carry out that service with a level of “reasonable care and skill” that a consumer should reasonably expect from someone that has been formally trained and qualified to provide such services.
If no definite date has been set for time of completion, then the work must be completed within a reasonable time. Under the Supply of Service (Implied Terms) Act 2003, a “reasonable period of time” is undefined and will depend on the circumstances.
If no price has been set, then the charge must be reasonable. A reasonable price would be judged by the standard costing for that particular service.
Under the Consumer Protection Act 1999, Consumer Affairs may appoint inspectors who possess the authority to enter premises, seize products and documents and make test purchases of any consumer good subject to investigation.
If is a commercial enterprise offering consumer goods and services is found to be operating in violation of the Consumer Protection Act 1999, Consumer Affairs has the authority to impose a maximum of a $15,000 fine and/or imprisonment for up to 12 months.