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IN THE CONSUMERS’ CORNER

BY RASHAD MAHMOOD

Protecting Egypt’s consumers is a Sisyphean task. Many purchases are made through unlicensed vendors in the informal sector, counterfeiting is rampant, and the concept of a receipt is largely unknown.

Enter the Consumer Protection Agency (CPA). Launched in 2007, based on Law 67 of 2006 (the “Consumer Protection Law”), the agency works to shield consumers from deceptive advertising and faulty goods. Perhaps most importantly, the agency’s hotline, 19588, gives consumers a number to call if they believe they are being treated unfairly.

The law provides several important protections for consumers. Retailers are required to provide receipts upon request and provide a refund or product exchange within 14 days of purchase. All products must be properly labeled in Arabic and bait-and-switch schemes are outlawed, so consumers must be given the advertised price.

From its inception to mid-December, the agency received 18,808 complaints and resolved 16,901 of them, with 1,907 still pending. Saeed El-Alfi, chairman of the CPA, says “most of the calls we get are on expensive items,” usually durable goods, such as televisions, air conditioners, computers or other electronics. Of the total number of complaints, 1,916 were related to services, also covered by the new law, and 2,375 were about automobiles.
El-Alfi explains that most of the CPA’s cases involve retailers that have refused to refund or exchange a product within the legal timeframe. He emphasizes that the agency thoroughly investigates complaints to make sure they are valid. “When necessary, we refer the investigation to the appropriate ministry, since many other parts of the government are involved in consumer protection,” he says, citing the Egyptian Organization for Standardization & Quality and the General Organization for Export & Import Control. If the consumer’s claim appears valid, the agency contacts the retailer to hear their side and remind them of their legal obligations. “Initially, when we were starting out we would get some resistance from retailers, but now that we’re known, they are generally cooperative,” he says.

When asked what happens if companies aren’t cooperative, El-Alfi says the agency has referred cases to the courts, but prefers to settle them before they get to that stage. He says 115 cases have been sent to the prosecutor’s office, of which 71 have been decided. In 45 of the cases, judges ruled in favor of the CPA. When the CPA wins, the agency publicizes the result in the news media, a further incentive for companies to obey the law. “The press loves these stories, so it is not hard to get coverage,” El-Alfi says.

Car claims can be particularly contentious because a substantial amount of money can be at stake. According to Raafat Masrouga, head of the CPA car committee, warranties in Egypt vary by manufacturer, ranging from three years or 100,000 kilometers to six months or 20,000 kilometers. Masrouga says most complaints referred to the car division relate to “lemons,” or vehicles that have a major malfunction soon after being sold.
When a customer calls, an initial investigation is done by staff at the agency’s call center based in the Smart Village. If they decide it is necessary, the car is taken to a mechanic at either Helwan or Ain Shams universities, both of which have automotive sections and can do advanced analysis of the problems. Especially difficult cases are referred to the CPA’s vehicle committee, which is comprised of experts who then make the final decision on whether the vehicle is a lemon. If the dealer has refused to grant the customer an exchange or return, Masrouga tries to mediate the problem himself, but will finally turn to the courts if the dealer continues to refuse. Masrouga emphasizes that “all brands of cars have lemons,” and that it is best for dealers if they acknowledge any such problem and quickly address it.

Masrouga observed that the CPA has adopted a consumer-friendly interpretation of the lemon law, following the same policies as the US. Customers are guaranteed an exchange for a new vehicle if the dealer or a mechanic cannot fix the problem in four attempts, whereas in most of Europe and Australia dealers have more time and options before a new car is mandated.

Adel Mohamed Saleh, owner of AMS for Export & Import in Nasr City, says a car he bought had a major engine failure that required a replacement. After waiting for a month and not hearing from the dealer, he contacted the CPA. “I only waited one week after calling them, and they arranged a meeting with the dealer, who said that they didn’t have a new engine to replace the old one.” After another meeting with the CPA and the dealer, Saleh says, the dealer offered him a full refund. “I was very happy with the assistance the CPA provided.”

Amal, a television broadcast journalist in Egypt who asked that her full name not be used, says she was happy with the service she received from the CPA. She bought a car in May 2008. In November, she suddenly lost control of the vehicle because of a bent axle, without any contact with other cars. She says the dealer offered her a new car in exchange, but she wanted a full refund since she had “lost faith in the brand.” She contacted the CPA, who met with her and the dealer and arranged a refund. “The dealer and the CPA did not know I was a journalist until after the issue was resolved, so I didn’t get special treatment,” she says.

Before the creation of the CPA, if consumers had problems their only option was to go to a consumer protection NGO. Anan Helal, chair of Egypt’s Eye Society for Consumer & Environmental Protection and vice chairman of the CPA, says that in her previous work in the same field, “we would try to do what we could to help the consumer, but it was very hard to find sufficient funding to address the needs of Egypt’s consumers.” In the US and Europe, Helal says, “consumer protection NGOs often get funding by selling memberships and magazines that provide product reviews. In Egypt, it is hard to convince people that this is something that will be helpful to them.”

Consumer protection NGOs have been active, and the law allows them to file class-action lawsuits. Helal said the first suit was filed in Sharqiya governorate against a mobile phone shop. “The store refused to give out receipts, so a consumer went to the civil society organization in Sharqiya, which filed the suit,” says Helal. “The vendor eventually paid a LE 10,000 fine.” However, the law stipulates that proceeds from suits go to the government, rather than benefiting consumers or the NGO that brought the suit. Helal thinks “the government should fund societies out of these funds so that they can continue their work.” Her former NGO, the Central Egyptian Society for Consumer Protection, looked into bread quality and collected complaints about merchants that took subsidized wheat from the government and sold it on the black market. However, she says all they could do was “report them to the [then] Ministry of Supply and Internal Trade, which sent inspectors. But the inspectors were not reliable. We would keep sending complaints until the ministry sent inspectors and the bakeries stopped.” Until NGOs can find sufficient funding, she says, the CPA is Egyptian consumers’ best hope for redressing grievances.

Helal acknowledges that the system has room for improvement. “Receipts should be obligatory. Whenever you buy something, they should give you the receipt without asking,” she says. She has pushed for receipts to be required for all purchases, but parliament decided to accommodate small businesses and only require receipts upon customer request. “The problem is that many consumers don’t know their rights, and don’t ask for a receipt. Then if there is a problem, there isn’t much that can be done,” says Helal. She suggests requiring receipts for all purchases of LE 10 or more. Helal, like El-Alfi, thinks the media needs to play a larger role in educating consumers.

While “pleased with the progress that the CPA is making,” El-Alfi says much more needs to be done. Currently, the hotline is only available in the Cairo and Alexandria areas, however by early this year it will be expanded to cover the entire country. He sees the agency’s biggest challenges as publicity and earning the trust of the public. “Because we are a new organization, many Egyptians still don’t know about us, or if they do, think that we won’t help them.” The CPA has placed several advertisements in newspapers, and distributed a leaflet containing information about the agency and contact numbers for major manufacturers of consumer goods. However, to address the scale of the problems in Egypt, he said, the ultimate solution is for NGOs to become more active.

In the short term, he is confident the CPA can continue to grow and serve more Egyptians. “Egyptian consumers are smart when it comes to their own pockets,” he says, “so if we can prove that we are effective, we will gradually gain their trust.”

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