Commission: Consumer protection needed

The
Cayman Islands Law Reform Commission is seeking to introduce the country’s
first consumer protection law. “Consumer protection is essential against those
who profit from mass consumption, engage in cost-cutting measures at all levels
of production and, at the same time…adopt predatory practices which ultimately
abuse customer interests,” members of the commission wrote in their annual
report.

The
commission said it was “likely” the current review would point to the need for
consumer protection legislation in the Cayman Islands. It did not state when
that review might be completed.

There
is some protection against price gouging in the Cayman Islands during times of
emergency – hurricanes and other natural disasters, for instance. But there is
no consumer protection law, nor a full-time agency such as a better business
bureau, where complaints can be made.

The
Cayman Islands Chamber of Commerce functions in this capacity to a certain
extent with its own membership. However, if a business is not a member of the
Chamber organisation, there is little the agency can do to protect consumers.

The
Law Reform Commission intends to present a number of recommendations on areas
like consumer fraud, warranties, product safety and liability and debtor
rights.

In
forthcoming legislation, the commission stated it would seek to ensure goods
sold for local consumption meet safety standards, are of reasonable quality and
are offered on fair terms.

The
proposal will create some mechanism where consumers can receive information and
access to legal remedies if need be. In this regard, the Office of the
Complaints Commissioner operates as something like a consumer advocate, but its
authority does not extend beyond government agencies. The commission will
explore establishing such an office to deal with private sector complaints and
mediating customer disputes.

Such
an entity might also conduct tests or surveys on local products and services,
the commission’s report stated.

“(Our)
objective is to produce an issues paper seeking public input on the
introduction of consumer protection legislation,” the
commission stated.

 

Strata and timeshares

In
somewhat related measures, the Law Reform Commission is reviewing Cayman’s laws
on strata titles and considering whether there should be laws regulating
timeshare operations.

According
to the commission, the main problem with various strata is the ineffective
management of those schemes.

The
commission recommended that the current Strata Titles Registration Law be
changed to allow a majority of owners (possibly 65 per cent) to vote on whether
to sell a strata.

“The
powers of some developers under strata schemes were too many and led to
problems including unfair distribution of insurance proceeds after Hurricane
Ivan,” the commission stated.

The
commission also noted that some strata had poor bylaws and generally lacked
accountability. Others were negligent in ensuring members obtained good quality

insurance premiums.

The
government recommended back in 2006 that a review of timeshare properties be
conducted, and the commission expects a draft bill on the matter will be
produced by next month.

A
number of problems were found in the management of time share properties
worldwide, including lack of cancellation rights, loss of deposits and
pre-payments by investors, unclear information about what exactly is being sold
to customers, and misleading claims about the financial position of the
timeshare business.

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