Consumers in Bermuda have been provided with statutory protection against unscrupulous traders.

The Consumer Protection Act 1999 came into force four months ago, and provides consumers with protection against unfair business practices and consumer goods that are unsafe.

Penalties for non-compliance with the act are stiff.

A Consumer Affairs Board established under the act has the authority to order any person that it has reasonable and probable grounds to believe has been engaging in unfair business practices to cease the practice complained of.

Non-compliance with such an order renders any person liable to a fine of up to $10,000 or imprisonment for up to six months.

The act defines a "consumer'' as a person to whom goods or services are or may be supplied, provided that the goods or services are not received in the course of a business.

"Unfair business practices'' are defined in the act as either a false, misleading or deceptive consumer representation or an unconscionable consumer representation made in respect of a particular transaction.

The most common form of representation to a consumer is an advertisement although consumers come into contact with retailers in many other ways such as entering finance agreements to purchase goods or services.

False, misleading or deceptive consumer representations have many forms.

They can include representations that goods or services have sponsorship, approval, performance characteristics, accessories, uses, ingredients, benefits or qualities that they do not have; or that goods are of a particular quality if they are not.

A retailer who alleges that goods are new, or unused, if they are not or have been reconditioned or reclaimed is guilty of an offence under the act.

Representations about price advantages are unfair business practices if such advantages do not exist.

Consequently, a representation that goods or services are being offered at a discounted or sale price will be considered an unfair business practice unless the goods or services were offered at the full, undiscounted price for a period of at least 28 days preceding the sale.

A representation may be considered unconscionable if the person who makes the representation, or his employer or principal, knows or ought to know that the consumer is unable to protect his interests because of his physical infirmity, ignorance, illiteracy or inability to understand the language of an agreement.

Similarly, if the maker of a statement misleads the consumer as to the terms of an agreement, their effect, the subject matter, or the price, such conduct could be regarded as unconscionable.

A consumer who has been induced to enter an agreement on the basis of an unfair business practice is entitled to break the agreement and sue for damages.

If the unfair practice was an unconscionable representation the court may award exemplary or punitive damages against the retailer.

Traders should be aware that each person who makes the consumer representation that is an unfair business practice is liable jointly and severally with the person who entered into the agreement with the consumer.

This means that the consumer who has entered an agreement as a result of an unfair business practice can choose to sue any or all of the persons who made the consumer representation. Each one is as liable to the consumer as the final person with whom the consumer enters the agreement.

Any trader with an eager and enthusiastic sales staff is advised to ensure that any representations that they make comply with the act.

The act also provides sanctions against traders who supply goods that are unsafe. Retailers have a duty to take all reasonable steps to ensure that the goods they supply to consumers provide no risk that they will cause the death of or personal injury to any person whatsoever.

This extends to the way in which they are kept or used, how they are to be assembled, and what they are made of.

Further, if such goods are used to weigh, measure or otherwise calculate they must be accurate as any injury caused by the reliance on a faulty consumer product can lead to an action in the court against the supplier.

The act allows the Minister of Development and Opportunity to prohibit or suspend the supply of goods that he reasonably believes to be unsafe.

The minister can also order traders to give warning notices about products they have supplied if it later transpires they were unsafe.

Anyone who fails to comply with such an order is liable on summary conviction to a fine of up to $10,000 or up to six months imprisonment.

A consumer injured by unsafe goods has an action in damages against the supplier of those goods.

Attorney Rachel Cabot is a member of the litigation department at Appleby Spurling & Kempe. Copies of Mrs. Cabot's columns can be obtained on the Appleby Spurling & Kempe web site at www.ask.bm.

This column should not be used as a substitute for professional legal advice.

Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.