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Consumer Protection

Broad regulations against misleading advertisements

  Patong

July 2016

Consumers of products and goods in Thailand frequently ask legal counsel whether liability can arise from ‘misleading advertisements.’ Essentially, the question is posed as such: "I was promised something in an advert
I saw and the product I purchased due to the advert is not what was promised. Do I have any claim for compensation?"

One legal mechanism that has been used to ‘police’ advertisements in Thailand is the Consumer Protections Act of 1979, which created a number of rules about the advertising of, and the sale and purchase of, goods and services in Thailand. The Act also created a so-called ‘consumer protection board’ to accept complaints from consumers about the sale and purchase of goods and services.

Generally, the Consumer Protections Act provides certain rights to ‘consumers,’ which are defined as "person[s] who buy or obtains services from a businessman or person[s] invited by a businessman to purchase goods or obtain services…" Therefore, in order to qualify for protection under the Act, a person must be a ‘consumer’ and must have purchased, or at least have been offered for purchase, goods or services. Once falling under this definition, the Act provides broad protections, and indeed Section 4 of the Act specially states that a consumer is entitled to the following:

1. The right to receive correct and sufficient information and description as to the quality of goods or services;
2. The right to enjoy freedom in the choice of goods or services;
3. The right to expect safety in the use of goods or service;

4. The right to a fair contract, and
5. The right to have injury considered and compensated under law.
Because the Act protects consumers from incorrect ‘information,’ it naturally deals with advertisements for goods and services, which by their very nature are intended to deliver information on a product, whether it be a good or a service. Indeed, section 22 of the Act states that "an advertisement may not contain a statement which is unfair to consumers or which may cause adverse effect to the society as a whole" and then goes on the specify that an advertisement is unfair or causes adverse affect to society if it is (1) exaggerated or false; or (2) causes misunderstanding in the essential elements of the goods. The Act specifies other ways an advertisement can be harmful, but for the purposes of this short brief, the above two points are the most relevant.

The role of the Consumer Protection Board in determining which advertisements offend the provisions of the Act is broad. Consumers who feel they have been mislead by an advertisement can petition the board for consideration of their case and redress. In fact, the board can ultimately enjoin the use of an advertisement it ultimately deems to be ‘harmful to consumers,’ or order the advertiser to clarify statements found to be misleading, and where not clear, they have the power to order the advertiser to substantiate what they have claimed about such advertised good or services. Advertisers who are found to be in violation under the Act, may also liable for injury compensation at law to those who have purchased their goods or services as a result of the advertisements.

As such, it is important for business people making statements and representations in advertisements about products in Thailand to be offered to consumers, to ensure that such statements be reviewed for compliance with the Consumer Protection Act. The good news for advertisers who are unclear is that they have the opportunity to pre-empt action by submitting their intended advertisements to the Board for an opinion and feedback. Opinions generally must be supplied within 30 days, or the advertisements submitted are deemed to be acceptable and not in violation of the Act.

In Phuket, the question of misleading advertisement often arises in connection with purchases of property – be it a condominium or a villa. Purchasers ask if the Act’s provisions apply to such property ‘products,’ and the general response from lawyers is, yes – ‘potentially.’ However, due to the often complex nature of property investment, combined with the complex provisions of the Act, it is important for consumers to check with legal counsel as to whether the factual circumstances of a property purchase and related advertisements fall within the Act’s provisions.

Author: Robert Krupica – Hughes Krupica Consulting Company Limited
Hughes Krupica has a Senior Arbitration Specialist, Victor Smith, as part of its growing practice. Victor is experienced in sitting on arbitrators panels and advocating for parties in arbitration proceedings.
www.hugheskrupica.com

 Contact info:

Hughes Krupica Consulting (Bangkok) Co. Ltd

Bangkok Office:
179 Bangkok City Tower, Fifth Floor,
South Sathorn Rd, Sathorn, Bangkok 10120
Tel: +66 2 679 5688

Phuket Office:
23/123-5 Moo 2, Kohkaew Plaza,
The Phuket Boat Lagoon, Tambon Kohkaew, Amphoe Muang, Phuket 83000
Tel:+66 76 238473-4

enquiries@hugheskrupica.com
www.hugheskrupica.com

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