I move: "That the Bill be now read a Second Time."
The object of the Bill is to improve the protection given to consumers in the Merchandise Marks Acts, 1887 to 1970, by widening the definition and scope of trade descriptions to suit modern circumstances; by forbidding other misleading statements about goods and about services; by providing that advertisements are trade descriptions; by including power to require disclosure in advertisements of information necessary for consumers, and to assign meanings to terms used in advertisements and by setting up a director of consumer affairs with certain regulatory and enforcement powers.
Consumer protection is not new; indeed, its origins are very ancient. The beginning of modern consumer protection may be placed round about one hundred years ago with statutes such as the Weights and Measures Acts, the Merchandise Marks Acts. the Sale of Goods Act, the Food and Drugs Act and other similar enactments. These Acts contained much which is valuable today, but were of course devised to suit the circumstances of that era. For instance, the Weights and Measures Acts were related to a time when goods were weighed out in the shop and not prepacked, and the Merchandise Marks Acts did not visualise the application of trade descriptions in advertising, and not on television or radio. Even though these laws were supplemented and revised in 1928, 1931, 1936 and 1970 and new laws added, such as the Hire Purchase Act, 1946, and Restrictive Practices Act, 1953, and so on, they now are in need of considerable revision to meet the needs of today. We live in a time of the widest consumer choice, attractive packaging, and artificial differentiation of products that are essentially the same. As the links in the chain between producer and consumer become more and more numerous, redress for the consumer becomes more complicated.
The need for up-dating and extending the different codes of law providing protection for consumers has long been recognised. A start was made with the Merchandise Marks Act, 1970, under which effective provision has been made for requiring quantities to be marked on a wide range of pre-packed goods, many of which are required in addition to be packed in prescribed sizes. In 1972 the National Prices Commission were asked to make an in-depth survey of the remaining areas where new legislation was required, and this led to the Whincup report, published on 1st October, 1973. With the establishment of the National Consumer Advisory Council this task was transferred at the end of 1973, and the council made their report to the Minister in December, 1974. It was published in February, 1975, and comments on the report were invited by the Minister not later than 30th June, 1975. The views of all interests on these were sought by press advertisement and these have been taken into account. The NCAC recommendations dealt with the subject under four separate headings and the present Bill is related only to the first heading, that is, deceptive trade practices. A second measure will be ready shortly dealing with contract terms, guarantees, warranties and so forth, that is, the field covered by the Sale of Goods Act, 1893, and work on further measures, in particular a Consumer Credit Bill, is well advanced. I may perhaps mention here that our programme of consumer protection legislation is closely in line with that contained in the consumer protection and information programme adopted by the EEC in April, 1975.
I would not like to let this occasion pass without paying a well-deserved tribute to the chairman and members of the National Consumer Advisory Council for their very painstaking work which has provided a most valuable guide to the changes in the law which are most urgently necessary.
This Bill might be said to deal with all forms of information-giving to consumers, whether by printing on packs, notices in shops, brochures, leaflets, word-of-mouth, radio or television advertising. Its provisions are intended to ensure that all such information is neither false nor misleading, and also that essential information will not be withheld.
The notion of a "trade description", introduced in the 1887 Act, was of a statement about goods which, on pain of prosecution, must be true. Only certain limited categories of statements were comprehended by the earlier Acts, so that while it was an offence to make an untrue statement about, for instance, the weight of an article, it was not an offence to claim falsely that it complied with a particular standard. The new Bill will remedy this by bringing within the concept of trade description virtually all kinds of statements about goods which might influence a purchaser. Trade descriptions will now comprehend statements about such matters as processing or reconditioning, fitness for purpose, compliance with a standard or test, and the standing or commercial importance of the supplier or manufacturer. A further gap is to be closed by prohibiting misleading as well as actually false statements.
There is a third general respect in which the application of the Acts to goods is being widened. The 1887 trade description had to be physically on, with or near the goods, but this Bill provides that information given by word of mouth or contained in an advertisement or in fact given in any way may be a trade description and subject to the same requirements of truth and accuracy as if it were physically attached to the goods.
One of the most controversial areas of misleading information in recent years has been in the field of price indications. These may be implied, or may be direct comparisons with former prices, normal prices, the price elsewhere, and so forth. The Bill makes it an offence to give a false or misleading indication as to the price at which goods or services have been or are being offered or for which they can be obtained elsewhere, or the recommended price or the full price which will have to be paid. I expect that this measure will end the confusion and annoyance frequently occasioned by the "4p off" phenomenon.
Another provision which I might particularly mention is the power the Bill would give to a person to seek from the courts an order prohibiting the continued publication of a particular advertisement. This was in fact recommended explicitly by the NCAC, and I am aware that their recommendation has been a cause of some anxiety to the advertising industry. After very careful consideration, I have concluded that the inclusion of this provision is called for. What the Bill in general provides for is penalties for a variety of breaches of the law after these breaches have occurred; and while it is true to say that the fear of these penalties is a powerful reason why the breaches should not occur in the first place, this reasoning cannot always be relied on. I could not accept the position that a series of seriously misleading advertisements should continue to run with no power to stop them other than the threat that at some future date the person responsible would be prosecuted, always supposing he had not left the country.
I am satisfied that the provision in the Bill is called for, and equally I am confident that we can rely on our courts to see that it is not abused by frivolous or unjustified applications. As a safeguard against this, I have provided in the Bill that where in such proceedings the High Court requires an undertaking as to damages, this may include lodgment of money in court. I consider however that it is a valuable feature of the Bill that private citizens, as well as the director of consumer affairs, should have this possibility of court action to stop advertising which is causing or is likely to cause damage or loss. The citizen thus has a part to play in enforcement and the whole burden and cost will not fall entirely on the public authority.
I believe that responsible advertisers have much to gain from the guarantees provided in this. They will be free of any danger of unfair competition by less scrupulous colleagues making misleading claims. I would like to pay a tribute to what the advertising industry itself has already done to protect the public from irresponsible advertising. Through the code of advertising standards for Ireland the advertisers, the agencies and the media have exercised a very valuable control, often of a kind which could not be exercised by legislation alone. I am sure that this form of self-discipline by the industry will continue, supplementing the controls in the Bill which will now underwrite it. Indeed the provision in the Bill whereby the director of consumer affairs can assist with the drawing up of voluntary codes and can approve codes is an earnest of my wish that codes should be fostered.
A further important feature of the Bill is the power to make orders requiring that specified information be included in advertisements in the interests of the consumer. This is necessary for cases where the omission of some essential information in an advertisement could make it misleading. It will also help in dealing with another field where complaints have been arising, for example, promotional contests. These very often do not disclose the full facts and in particular the results. I intend to use this power to ensure more frank and full information in relation to that form of promotion. Because words or expressions of imprecise meaning which yet have a ring or imputation of real or intrinsic value and worth are often used with little or no justification in relation to products, the Minister is also empowered to assign by order particular meanings to expressions commonly used in relation to goods and services to ensure that consumers are not misled by deceptive or vague descriptions.
Similarly, he may require by order that certain goods be marked with or accompanied by specified information or instructions where he feels that this is necessary in the consumers' interest. The power of making orders which is conferred on the Minister is subject to his giving notice of the making of the order and consulting with interested parties. Furthermore, the approval of the draft order by both Houses of the Oireachtas is necessary.
I think I should also say a few words about trade description applied by oral statements. It may be thought that it is going too far to expose traders to the risks of action for statements made by their employees which would amount to trade descriptions. So much use is made of oral description and so much weight attached to it when buying, that it would be quite impossible for me not to include this form of trade description in the Bill. It seems reasonable to me that traders and shopkeepers should have a responsibility for trade descriptions given orally by their employees. It is intended that legal proceedings under the Act will be taken with discretion and where the circumstances warrant them. I do not envisage that traders will be harassed by the enforcement inspectors for trivial breaches where the degree of loss or damage which might have been caused by inadvertant misdescription was negligible.
Possibly the greatest single deficiency of the Merchandise Marks Acts is that they relate only to goods and make no provision for protecting the consumer against the dishonest advertising or promotion of services. Services are an area where consumers can be misled in the same way as with goods, and they are if anything even more dependent on the supplier's descriptions and representations. The Bill accordingly prohibits the fraudulent and negligent making of statements relating to services, facilities and accommodation. The relevant sections necessarily differ in detail from those dealing with descriptions of goods, but the general aim is to apply the same rules,mutatis mutandis, to statements by advertisement or otherwise, about services as about goods.
The area of consumer protection is one which is marked by continual development of new areas of study and calls for public regulation. This is a reflection of the dynamic character of marketing and product development which, however, described from the point of view of business, contains the possibility of new forms of manipulation to which the consumer may not be alert. Potential for economic loss or damage to the consumer should be under surveillance and capable of being influenced as much asex post facto sanctions for damage or loss caused. To help to rectify this possible danger, I propose to create with this Bill the office of Director of Consumer Affairs who would be an officer of my Department charged with keeping developments in trade descriptions and advertising under review in the in-interests of the consumer, requesting the cessation of prejudicial practices, seeking injunctions where necessary and promoting the adoption of codes of good practice by business groups. The Bill also provides for officers to be authorised by the Minister for Industry and Commerce to enforce the provisions of this Bill, generally, and to assist the director.
Considerable representation has been made to me that the value of any consumer protection legislation lies in effective enforcement. It is my intention and I have already put work in train on this, to have a unified weights and measures—prices inspectorate with officers authorised to carry out the measure proposed in this and other consumer protection legislation. My first reactions are that this should be a single centralised inspectorate, under the Minister for Industry and Commerce, and regionally located. These officers will be trained to carry out their duties under the weights and measures and consumer protection law and to do this with discretion, consideration for the practice of business as it is carried on day to day, but with regard to the provisions of the law for the prevention of loss due to fraud or deception. There are other duties which I envisage these inspectors will cover such as the enforcement of the safety of electrical goods under the low voltage electrical equipment regulations, safety standard for children's nightwear, toys and so on, prescribed sizes and quantity marking of goods, food standards, and so on. I think I can say that the bringing together of inspectorate duties in the way I propose will keep this force within existing proportions and should not involve greatly increased numbers and costs, if any. I envisage that this inspectorate, while being an officer of the Minister and acting for him and taking prosecutions in his name, will be able to assist the director in similar way in carrying out his functions.
There are probably goods on the shelves or in the stores of distributors which were bought by them in good faith, but which might be held, on a strict interpretation of the new provisions, not to measure up fully to the new requirements. I think it would be harsh to leave distributors at a loss in relation to such goods which they accepted as goods freely circulating on the market, and that it would be reasonable to allow a short period to adjust to the new requirements. I will be open to suggestions on this point.
The Bill does seek to restore a balance which has titled somewhat against the consumer. I re-emphasise, however, that it also protects honest traders from their less scrupulous competitors. It also provides adequate defences for mistakes, accident and so forth and makes special provision for those who merely publish advertisements. Indeed, in referring to traders and manufacturers I would like to take the opportunity of paying tribute to those who are participating in the Guaranteed Irish Scheme.
This Bill is part of a general policy of consumer protection which could be said to contain three basic elements:
—ensuring that the consumer gets truthful information;
—ensuring that the consumer gets more, and more relevant information and,
—strengthening the consumer's position in the market place.
The first two elements are contained in this Bill and in improvements in price display provisions which are also in hand. The third will be a major preoccupation of later legislation to modernise the Sale of Goods Act, to cover services as well as goods, consumer credit and restrictive practices legislation. The overall objective of the policy is to enable the consumer to play a more equal and effective role with the producer and distributor, in an expanding competitive economy.