Cambodia to crack down on pyramid schemes and false advertising

The Commerce Ministry is launching a crackdown on false advertising and operators of pyramid schemes that promise money to investors for recruiting others into the company and tricking them into paying membership fees. The ministry’s Director General of Consumer Protection, Competition and Fraud Repression (CCF) made the announcement at a national conference organised by the European Chamber of Commerce and attended by around 300 members of the local and foreign business communities in Cambodia. “I would like to appeal against false advertisements, cheating and convincing advertisements. We will start enforcement this month and we will look into pyramid schemes as well,” Phan Oun said. “We need to differentiate between pyramid schemes and multi-level marketing. Multi-level marketing is a tool used to promote business growth. If it is a pyramid scheme the penalty is up to 80 million CR or $20,000,” he said. The Consumer Protection Law was approved in November 2019 to guarantee shoppers’ rights. The government also set up the National Commission for Consumer Protection (NCCP) which promotes the effective implementation of the Consumer Protection Law and has the power to jail offenders, close businesses and correct misleading information. It is also working with lawyers, who are consulting with business and consumer groups, on a National Consumer Protection Program (NCPP). Oun says the CCF’s workload increase during the Coronavirus pandemic as officers cracked down on fake alcohol sprays, which offer no protection against Covid-19, and rice wine mixed with methanol, that led to dozens of deaths during the alcohol ban and hundreds of fatalities in recent years. He said other initiatives include cracking down on food manufacturers who falsely label their goods, for example as healthy snacks containing vitamins and minerals. He said penalties range from a warning or fine to criminal charges if the ingredients are harmful. “Even though Cambodia has been considered a young country in protection or competition, Cambodia has committed to protect consumers and their rights through collecting and compiling regulations and laws, effective law enforcement, transparency and fairness,” he said. Oun was keen to stress that consumer protection laws should not be a barrier to business. Companies and consumers all stand to benefit from increased clarity, according to Sok Vanseka, Managing Partner at Sethalay Law Office, a research and consulting centre that aims to help businesses adopt international best practices. Her firm has been commissioned to draft the NCPP under the support of the GIZ ASEAN German Cooperation PROTECT project. The programme follows up recommendations from the United Nations and ASEAN to set global standards for consumers, while recognising the differences in commerce in individual countries. Vanseka said it as important to tell companies about best practice as it is to warn them about what not to do. “In our law on consumer protection we do not provide a positive list of what is fair conduct because we believe that it should be subject to the free market. But we provide a negative list: what is unfair conduct and unfair practice. As long as you do not practice that unfair conduct and unfair practice you are safe,” Vanseka said. The NCPP focusses on six main areas: firstly access and sustainable consumption, then protection of consumers, economic interest and privacy, thirdly health and safety, next the right to information and education, fifthly dispute resolution and redress and finally the role of consumer groups. With the work of the CCF and NCCP, bolstered by a new National Consumer Protection Programme, the old concept of caveat emptor, or buyer beware, is being replaced by caveat venditor. So sellers: if it doesn’t do what it says on the label…watch out. This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources. Khmer Daily