Introduction
A fair and transparent marketplace is fundamental to the growth and sustainability of any economy. Consumers are more likely to engage confidently in commercial transactions when they can rely on the information provided by businesses, compare products and services objectively, and make informed purchasing decisions without being subjected to deception, coercion, or exploitation. Likewise, businesses that operate ethically deserve to compete on the basis of quality, innovation, and value rather than through misleading or unfair practices.
In Nigeria, the legal framework for consumer protection has evolved significantly with the enactment of the Federal Competition and Consumer Protection Act, 2018 (FCCPA). The Act established a comprehensive legal regime aimed at promoting fair competition, protecting consumers from unfair commercial practices, and ensuring accountability in the marketplace. It also established the Federal Competition and Consumer Protection Commission (FCCPC) as the principal regulatory authority responsible for enforcing competition and consumer protection laws in Nigeria.
The FCCPA goes beyond addressing traditional fraud. It regulates a broad range of commercial conduct capable of misleading consumers, restricting informed decision-making, or exploiting unequal bargaining power. Consequently, businesses are expected to maintain high standards of honesty, transparency, and fairness in their dealings with consumers.
This article examines the legal framework governing unfair commercial practices in Nigeria, the obligations imposed on businesses, the statutory rights available to consumers, and practical measures organisations should adopt to ensure compliance with the law.
Understanding Unfair Commercial Practices
The FCCPA does not provide a single, exhaustive definition of the term "unfair commercial practice." Instead, it regulates different forms of conduct which collectively constitute unfair business practices.
Section 17(g) of the FCCPA empowers the Federal Competition and Consumer Protection Commission to eliminate misleading, unfair, deceptive, or unconscionable marketing, trading, and business practices. The Commission is also empowered to investigate complaints, resolve disputes within its statutory jurisdiction, and take appropriate enforcement measures where violations occur.
Unfair commercial practices may include:
- Misleading or false advertising;
- Deceptive pricing;
- Coercive sales tactics;
- Misleading testimonials or endorsements;
- Unfair contractual terms; and
- Any conduct that interferes with a consumer's ability to make an informed commercial decision.
The objective of the FCCPA is not to discourage legitimate marketing strategies but to ensure that businesses compete fairly while consumers receive accurate information and fair treatment throughout commercial transactions.
Misleading Representations and False Advertising
One of the principal objectives of the FCCPA is to ensure that consumers receive truthful and accurate information before purchasing goods or services.
Section 123 of the Act requires producers, manufacturers, importers, distributors, retailers, traders, and service providers to comply with prescribed standards when marketing goods and services. Businesses must not make representations that are false, misleading, deceptive, fraudulent, or erroneous in relation to goods or services offered to consumers.
The prohibition extends to representations concerning:
- the nature and characteristics of goods or services;
- quality and durability;
- intended use;
- price;
- performance or effectiveness;
- sponsorship or approval; and
- any other material fact capable of influencing a consumer's purchasing decision.
Section 125 further provides that where a business makes a false or misleading representation regarding a material fact during the marketing of goods or services, the undertaking may become liable for damages or monetary restitution where consumers suffer loss as a result.
These provisions have become increasingly significant in today's digital marketplace, where businesses rely heavily on websites, social media platforms, online advertisements, and influencer marketing to promote their products and services.
Businesses should therefore distinguish between promotional language that merely expresses opinion and factual claims capable of objective verification. Statements regarding the quality, performance, effectiveness, or certification of products should always be supported by credible evidence before publication.
Deceptive Pricing
Price transparency is an essential element of consumer protection and fair commercial practice.
Consumers are entitled to know the true price of goods and services before making purchasing decisions. Hidden charges, misleading discounts, undisclosed fees, or inconsistencies between displayed prices and the final amount charged may undermine consumer confidence and expose businesses to regulatory liability.
Section 115 of the FCCPA requires businesses to display prices clearly and prohibits an undertaking from demanding a price higher than the displayed price in circumstances covered by the Act.
To ensure compliance, businesses should:
- display prices clearly and accurately;
- ensure advertised prices correspond with the amount charged;
- disclose all applicable charges before payment; and
- avoid promotional offers capable of misleading consumers regarding the actual cost of goods or services.
Transparent pricing not only promotes compliance with the law but also strengthens consumer trust and enhances a business's reputation.
Coercion, Undue Influence and the Consumer's Right to Fair Dealings
Unfair commercial practices extend beyond misleading advertisements and deceptive pricing. The manner in which businesses conduct transactions may itself amount to a violation of the FCCPA.
Section 124 recognises every consumer's right to fair dealings and prohibits the use of physical force, coercion, intimidation, harassment, undue influence, pressure, or other unfair tactics in connection with the marketing, supply, or payment for goods and services.
The provision is particularly important where there is a significant imbalance in bargaining power between businesses and consumers.
Examples of conduct that may constitute unfair commercial practices include:
- deliberately concealing important contractual information;
- pressuring consumers into purchasing unnecessary goods or services;
- using intimidation or threats to obtain payment; and
- taking advantage of consumers who lack sufficient information to make informed decisions.
Businesses should therefore ensure that their sales representatives and marketing personnel conduct commercial transactions with honesty, transparency, and respect for consumer choice.
Testimonials, Influencers and Performance Claims
The rise of digital commerce has transformed the way businesses engage with consumers. Social media advertising, influencer marketing, customer reviews, and online testimonials have become powerful tools for promoting products and services. While these marketing strategies can significantly influence consumer purchasing decisions, they must be used responsibly and in compliance with the law.
Section 126 of the Federal Competition and Consumer Protection Act, 2018 (FCCPA) regulates representations concerning the performance, efficacy, durability, and testing of goods and services, as well as the publication of testimonials. Businesses must ensure that any testimonial or endorsement used in marketing is genuine, properly authorised, and capable of verification. Likewise, representations regarding the performance or effectiveness of a product must be supported by credible evidence before they are published.
Accordingly, businesses should avoid creating fabricated customer reviews, publishing misleading endorsements, or presenting unverified personal experiences as established facts. Every marketing communication should reflect the true qualities of the product or service being promoted.
As digital marketing continues to evolve, organisations should also implement internal review processes to ensure that advertising campaigns comply with the requirements of the FCCPA and other applicable regulations.
Unfair and Unreasonable Contractual Terms
Consumer protection extends beyond advertising and promotional activities. It also applies to the contractual terms governing the relationship between businesses and consumers.
Section 127 of the FCCPA prohibits businesses from supplying goods or services on terms that are manifestly unfair, unreasonable, or unjust. It also restricts contractual provisions that require consumers to waive statutory rights or assume obligations that are oppressive or inequitable.
A contractual term may be considered unfair where it:
is excessively one-sided in favour of the business;
places an unreasonable burden on the consumer;
results from a misleading representation;
was not adequately disclosed before the agreement was concluded; or
unfairly restricts the consumer's legal rights.
Although Nigerian law generally recognises the principle of freedom of contract, contractual freedom is not absolute. In Nika Fishing Co. Ltd v Lavina Corporation, the Supreme Court affirmed that parties are generally free to determine the terms of their agreements. However, where legislation such as the FCCPA expressly prohibits unfair contractual terms, statutory consumer protection takes precedence.
Businesses should therefore review their standard contracts regularly to ensure compliance with applicable consumer protection legislation and avoid clauses that may expose them to regulatory or judicial scrutiny.
Attempts to Exclude Consumer Rights
Some businesses seek to avoid liability by inserting broad exclusion clauses into contracts or displaying notices intended to limit consumers' legal rights. However, such provisions may not always be enforceable.
Section 129 of the FCCPA prohibits businesses from making transactions subject to terms intended to defeat the purpose of the Act, mislead consumers, or facilitate fraudulent conduct. In addition, Section 140 provides that contractual provisions seeking to exclude liability arising from pre-contractual misrepresentations are ineffective under the Act.
Accordingly, businesses should not assume that a clause stating "No Refund Under Any Circumstances" or any similar disclaimer will automatically override the statutory protections available to consumers.
Rather than relying on broad exclusion clauses, businesses should ensure that their contractual documents are drafted fairly, transparently, and in compliance with the FCCPA.
Evidence and Substantiation of Commercial Claims
Evidence is central to effective consumer protection and regulatory compliance.
Businesses making claims regarding the quality, performance, durability, or effectiveness of goods and services should maintain documentary evidence capable of substantiating those claims. Such records may include technical reports, laboratory tests, product specifications, certifications, approvals, or other relevant documentation.
A practical compliance principle for every business is simple:
Every commercial claim should be supported by credible evidence before it is published.
Consumers also have an important role to play in protecting their rights. Documents such as receipts, invoices, payment records, contracts, correspondence, and screenshots of advertisements may prove invaluable where disputes arise regarding the representations made during a transaction.
Maintaining adequate records promotes transparency, facilitates dispute resolution, and strengthens the administration of justice where enforcement becomes necessary.
Enforcement and Available Remedies
The FCCPA provides several avenues through which consumers may enforce their rights where unfair commercial practices occur.
Under Section 146 of the Act, a consumer may first raise a complaint with the supplier of the goods or services. Where the dispute remains unresolved, the consumer may refer the matter to the appropriate sector regulator, file a complaint with the Federal Competition and Consumer Protection Commission (FCCPC), or seek redress before a court of competent jurisdiction.
Depending on the circumstances of the case, available remedies may include:
damages;
restitution;
corrective measures;
regulatory sanctions; and
any other relief provided by law.
For businesses, compliance should be viewed as an essential aspect of corporate governance and risk management rather than merely a regulatory obligation.
Constitutional Context
The regulation of unfair commercial practices is consistent with the broader economic objectives contained in the Constitution of the Federal Republic of Nigeria 1999 (as amended).
Section 16 of the Constitution requires the State to promote national prosperity, social justice, and an efficient economic system that operates for the welfare of its citizens. Although these provisions form part of Chapter II of the Constitution and are generally non-justiciable, they provide important constitutional support for legislation aimed at protecting consumers and promoting fair commercial practices.
The FCCPA therefore remains the principal legislation governing consumer protection and unfair commercial practices in Nigeria.
How Sun Natha-Alade & Partners (SNATHAP) Can Help
Navigating Nigeria's consumer protection and commercial regulatory landscape requires practical legal guidance. At Sun Natha-Alade & Partners (SNATHAP), we advise businesses, entrepreneurs, and individuals on compliance with the Federal Competition and Consumer Protection Act and other applicable regulatory frameworks.
Our services include:
Consumer protection advisory;
Regulatory compliance;
Commercial contract drafting and review;
Advertising and marketing compliance;
Corporate risk management;
Regulatory investigations; and
Commercial dispute resolution.
Whether you are seeking to ensure that your business complies with consumer protection laws or require legal assistance in protecting and enforcing your rights, our team is committed to providing practical, commercially focused legal solutions tailored to your specific needs.
Conclusion
The Federal Competition and Consumer Protection Act, 2018 has significantly strengthened consumer protection in Nigeria by providing a comprehensive legal framework against misleading representations, deceptive pricing, coercive practices, unfair contractual terms, and other unfair commercial conduct.
For businesses, compliance should be proactive rather than reactive. Marketing materials should be truthful, commercial claims should be properly substantiated, contractual terms should be fair and transparent, and consumers should be treated with honesty and respect throughout every stage of the commercial relationship.
For consumers, understanding the protections provided under the FCCPA is equally important. Knowledge of these rights empowers consumers to make informed decisions and pursue appropriate legal remedies where unfair commercial practices occur.
Ultimately, fair commercial practices promote consumer confidence, encourage healthy competition, and contribute to sustainable economic growth. Businesses that embrace transparency and integrity are better positioned to build lasting relationships with consumers while reducing regulatory and legal risks.
Disclaimer
This article is provided for general informational and educational purposes only and does not constitute legal advice or create a solicitor-client relationship between the reader and Sun Natha-Alade & Partners (SNATHAP). The information contained herein reflects the relevant legal authorities discussed as at the date of publication. Readers are advised to obtain professional legal advice on the specific facts and circumstances of their matters before taking or refraining from taking any action based on the contents of this publication.
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