INTRODUCTION
Consumer protection laws safeguard the buyers of goods and services against defective products, fraud, and exploitation. As e-commerce expands globally, the need for robust consumer protection mechanisms has become increasingly evident. This is particularly pertinent in Ghana, where the rapid expansion of the digital marketplace has exposed the country’s significant gaps in consumer protection efforts. With an increase in risks such as fraud, defective products, exploitation, and no-refund policies, the fragmented consumer protection approach in Ghana has been insufficient in addressing these risks.
Countries with established consumer protection frameworks, such as the 2021 Virginia Consumer Protection Act in the United States, Canada’s Consumer Privacy Protection Act of 2023, the European Union (EU)’s 2016 General Data Protection Regulation (GDPR), and South Africa’s 2009 Consumer Protection Act, offer valuable insights into effective regulatory practices. These frameworks not only provide comprehensive protections within their jurisdictions but notably, in the case of the GDPR, extend to entities outside the EU[1], highlighting their broad and impactful approach.
In Ghana, however, the consumer protection landscape remains fragmented, with disparate policies spread across various sectors. This fragmented approach poses challenges in addressing consumer rights effectively due to the gaps in certain sectors and its silence on crucial consumer protection issues, such as misleading advertisements and exploitation. Traditionally, the Common Law principle of “caveat emptor” which translates as “buyer beware” has served as a protective mechanism for purchasers of goods and services. However, this author believes that this Common Law principle is merely a band-aid solution for the deeper injury and complexities of modern consumer exploitation. The purpose of this paper, therefore, is to discuss the consumer protection regime in Ghana with a view to making recommendations. In doing so, the paper explores the consumer protection landscape in Ghana, examining existing gaps and laws and proposing reforms.
EXISTING CONSUMER PROTECTION FRAMEWORK AND REGULATORY GAPS IN GHANA
Generally, robust consumer protection frameworks protect consumers’ interests through a comprehensive system of laws, policies, and mechanisms. Ideally, such frameworks should address a broad spectrum of consumer concerns, including data privacy, security, product safety, quality, advertising, and redress mechanisms.
On the contrary, Ghana’s current consumer protection guidelines, notices, and legislation focus on specific sectors but do not have a general scope of application. The absence of a unified law creates a fragmented legal landscape, making it challenging for consumers and businesses to navigate the various regulations.
Despite some efforts to provide consumer protection in Ghana, these have not been adequate to address the multitude of consumer protection issues including misleading advertising, refund policy, consumer credit, and enforcement mechanisms. The absence of a centralized consumer protection authority also hampers enforcement and creates a regulatory/supervisory vacuum that further promotes inadequacies in the protection of customers.
The key consumer protection framework includes the Data Protection Act 2012, (Act 843), the Electronic Transactions Act 2008, (Act 772) the Bank of Ghana Consumer Protection Guidelines and Notices, and the Sale of Goods Act 1962, (Act 137).
- DATA PROTECTION ACT, 2012 (ACT 843)
Ghana’s Data Protection Act provides a foundational framework for regulating the collection, processing, storage, sharing, and use of personal data, a critical component of e-commerce transactions. Section 20 of the Act mandates that the consent of data subjects is required for the collection, processing, and sharing of personal data, except under exceptional circumstances. This consent requirement is a crucial step in protecting individuals (consumers in this case) from unauthorized access to their personal data.
Beyond the requirement of consent, Section 17 of the Act imposes obligations on data controllers and processors to ensure that principles of data accuracy and security, accountability and transparency are upheld. Arguably, these are necessary principles that can prevent identity theft, fraud, and other consumer-related harms incidental to data breaches. Additionally, Section 33 of the Act permits individuals the right to access, rectify, and delete their data, granting consumers control of their personal information. Other requirements under the Act include the right to prevent the processing of personal information[2] and the right to seek redress through the courts[3].
Data protection is undeniably intertwined with consumer protection since the misuse of personal data can facilitate incidents inimical to consumers’ interests. Notwithstanding the attempt of the Data Protection Act to address consumer protection concerns, it is only effective to the broad extent of data privacy and protection. Moreover, this author believes that a robust data protection regime is key to a good consumer protection framework.
- ELECTRONIC TRANSACTIONS ACT, 2008 (ACT 772)
The Electronic Transactions Act, 2008 (Act 772) provides a foundational framework for e-commerce in Ghana, addressing issues such as electronic contracts, signatures, and transactions. While the Legislation incorporates some consumer protection elements, its lens is centered on electronic transactions and does not provide a comprehensive approach to consumer protection.
One key provision under Act 772 is that consumers have the right to cancel transactions without penalty, within specified timeframes – 14 days for goods, 7 days for services, except under certain transactions including the purchase of foodstuff, lottery services etc.
Despite these provisions, the Act lacks specific provisions on product defectiveness, and dispute resolution mechanisms, which are key for a consumer protection framework.
- BANK OF GHANA CONSUMER PROTECTION NOTICES AND POLICIES
The Bank of Ghana (BOG) has over the years issued guidelines, notices, and policies that bridge the regulatory gap and are geared toward protecting consumers of the banking and financial industry from excessive charges and unfair treatment. These Guidelines include the 2017 Consumer Recourse Mechanism Guideline for Financial Service Providers, the 2017 Disclosure and Product Transparency Rules for Credit Products and Services, the 2021 Notice on Abolition of Unfair Fees, Charges and Other Practices in the Banking Sector, the 2021 Notice on Sanctions for the Issuance of Dud Cheques, and the 2021 Unclaimed Balances and Dormant Account Directive.
The Banking Supervision Department of the BOG also has the Investigation and Consumer Reporting Office (ICRO) which “is the financial industry watchdog office of the Bank of Ghana (BoG), with responsibility for protecting consumers of financial products/services and educating them on their rights and responsibilities”.[7] With a three-unit functional office, the Office has made strides by allowing customers unsatisfied with a financial product or service offered by a regulated bank to make complaints and conduct investigations of bank fraud and embezzlement.
While these efforts are commendable, they fail to provide comprehensive consumer protection.
Several gaps persist. The ICRO’s mandate focuses on banks and other regulated financial institutions, and despite an improved 29% in customer complaints in 2023, compared to 2022, Bank of Ghana reports showed an increase in the complexity of complaints.[8] Moreover, the office’s investigative powers are often limited to institutions under the BoG’s supervision, hindering its ability to address complex financial fraud schemes. Additionally, the ICRO’s reliance on complaints suggests a reactive approach to consumer protection rather than a proactive stance on preventing consumer harm.
- CYBERSECURITY ACT, 2020(ACT 1038)
The Cybersecurity Act, 2020 (Act 1038) was enacted to regulate cybersecurity activities in the country and promote the development of cybersecurity in the country. While the Act regulates cybersecurity activities, it indirectly protects consumer interests by setting cybersecurity standards for critical information infrastructure and imposes license requirements on cybersecurity service providers.
This is a step in the right direction to protect consumers from cyber-attacks and boost consumer confidence.
THE WAY FORWARD: THE NEED FOR A COMPREHENSIVE FRAMEWORK
Over the years, attempts have been made to enact a consumer protection act, but the Bill has since not been passed.[9] The Ghana Consumer Protection Policy, developed in 2022 by the Ministry of Trade and Industry of the Government of Ghana to address the inefficiencies in Ghana’s current customer protection framework appears to be a step in the door to achieving a consumer-protective jurisdiction. Nonetheless, the ideas, policies, and guidelines must be translated into legislation.
This author is of the view that the legislation would serve as backing for enforcement efforts and will provide a level playing field for both businesses and customers while stimulating economic growth.
As previously discussed, with robust frameworks in countries like the UK, Canada, the US, and South Africa, Ghana can gain valuable insights from these jurisdictions. A comprehensive protection law with a dedicated agency that not only enforces but promotes consumer awareness is essential. By adopting a more holistic approach, Ghana can enhance proper consumer protection practices.
[1] https://gdpr.eu/companies-outside-of-europe/#:~:text=The%20GDPR%20does%20apply%20outside,%E2%80%9Cextra%2Dterritorial%20effect.%E2%80%9D
[2] Section 39 of the Data Protection Act (Act 843)
[3] Section 43 of Act 843
[4] Section 49 of the Electronic Transactions Act, 2008(Act 772)
[5] Section 47 of Act 772
[6] Section 50 of Act 772
[7] https://www.bog.gov.gh/supervision-regulation/investigation-and-consumer-reporting-office-icro/
[8] https://www.myjoyonline.com/bog-received-695-complaints-from-bank-customers-in-2023/
[9] https://www.graphic.com.gh/news/politics/bill-to-protect-consumer-rights-in-the-offing.html
Author: Lily Oblie
