Consumer News: A ‘victory for consumers’ as Ministry gets tough on scratch-and-win contests, but beware of new scams.

The New Straits Times 


A ‘victory for consumers’ as Ministry gets tough on scratch-and-win contests, but beware of new scams.

KUALA LUMPUR: It is the end of the road for scratch-and-win contests. The Domestic Trade and Consumer Affairs Ministry is also setting up a task force to book those running get-rich-quick schemes and direct-selling scams.

Minister Datuk Mohd Shafie Apdal said the enforcement unit would go after companies which continued offering scratch-and-win schemes.

These companies risk losing their licences.

“We are also coming down hard on multi-level marketing companies involved in such scams. We are doing this to protect consumers.

“These schemes are mostly scams and benefit no one,” Shafie said.

The ministry said scratch-and-win contests had been abused by several companies, which had represented themselves as direct-selling firms.

“They offer many attractive prizes like cash, cars, motorbikes, household items and holiday packages.”

It said 20 direct-selling companies had their licences revoked for conducting scratch-and-win activities between 2005 and October.

“Many complaints have been received on get-rich-quick schemes, lucky draws and scratch-and-win tactics.

The statement said 2005 saw 1,571 cases filed with the Consumer Claims Tribunal, 241 complaints lodged with the police and 1,066 at the Public Complaints Bureau.

Between 2005 and September last year, the ministry’s enforcement division seized more than RM4 million worth of goods involving 145 scratch-and-win cases.

In an interview with the New Straits Times on Oct 1, Shafie had indicated the possibility of banning scratch-and-win contests.

He was quoted as saying that he had instructed his officers to look into the matter.

They would look into it from the legal, implementation and malpractice aspects.

Meanwhile, Federation of Malaysian Consumers Associations (Fomca) president Datuk N. Marimuthu welcomed the move.

“We want the ministry to learn something from this and not wait till people lose millions.”

Marimuthu added that even though scratch-and-win contests had been banned, the ministry should keep tabs on the direct-sales industry.

“Sometimes, the industry is more intelligent than the regulators and will come up with new scams.”

National Consumer Complaints Centre director Darshan Singh described the ministry’s move as a “victory for consumers”.

“With this, we hope that there will be no more problems arising out of scratch-and-win contests.”

Consumer Claims Tribunal chairman Rungit Singh said the move was timely due to the large number of cases filed with the tribunal.

“This business cuts across all walks of life, affecting consumers of various backgrounds. It’s timely the law has stepped in to stop it.”

“Although the tribunal has been bringing companies to book, a ban will send a clear signal that such a transaction is not allowed by law.”

The public should contact the ministry at 1-800-886-800, SMS 32255 or email, if they come across scratch-and-win contests.


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