The small business sector, known as the backbone of the Nigerian economy, plays a crucial role in job creation and economic growth.
However, the existence of unethical and illegal practices within this sector, particularly online, threatens its integrity and hampers its potential.
While some entrepreneurs strive to operate ethically and within the confines of the law in the quest for profit, others veer off the legal path. Grab your detective hat and let’s take a journey through the intriguing world of Nigerian entrepreneurship from a legal standpoint.
Refusal to disclose the price of goods (“DM for price”)
Have you ever come across a store or online business that displays their products without mentioning the price? Well, did you know that this is actually illegal in Nigeria?
According to the Federal Competition and Consumer Protection Act, businesses are required to clearly display the prices of their goods and services. Unfortunately, many vendors, especially on social media, fail to do so.
While it might sound amusing, in the grand scheme of things, it is plain illegal. This can be frustrating for customers who are interested in buying but have no idea how much things cost.
So, remember, transparency is key!
Breach of laws on data privacy (Loan Sharks/Network Providers/Banking Institutions)
Have you ever downloaded a loan app that asked for permission to access your contacts?
Well, did you know that some of these apps actually misuse personal information? This is a breach of a person’s right to privacy, which is protected by the Nigerian Constitution and The Nigerian Data Protection Act.
These loan apps may promise to keep your information safe, but they often share it with other apps or even with unsavoury characters who can harass or blackmail you.
They come as friendly neighbourhood financiers, but they are actually loan predators, who extort, blackmail or harass users and their contacts. This behaviour is not only morally wrong but also illegal. The people responsible for this should be held accountable.
Refusal to give refund for goods (Egúngún Be Careful)
Have you ever bought something online and later realized that it was defective or not as described? Well, according to the Federal Competition and Consumer Protection Act 2018, you have the right to get a refund in such cases.
However, some vendors refuse to give refunds and only offer exchanges. This leaves buyers with faulty products and no way to get their money back.
Vendors should do better by allowing customers to return goods within a reasonable time and receive a full refund.
Refusal to give a refund where the good is unsafe, defective, or does not correspond with the description is illegal according to Sec. 122 Federal Competition and Consumer Protection Act 2018.
However, it further provides that the buyer must within a reasonable time after the delivery of the goods communicate this to the vendor.
False and misleading misrepresentation (What I ordered vs. What I got)
Nigeria is known for its ingenious marketing strategies that are used to capture the hearts and wallets of consumers, but there’s a fine line between creativity and deception.
Some small businesses resort to misleading advertisements, making promises that even our most beloved Nollywood movies couldn’t fulfill.
Have you ever seen an advertisement that promised something amazing but turned out to be a disappointment?
Well, some businesses in Nigeria use deceptive marketing tactics to attract customers. This is against the law. The Federal Competition and Consumer Protection Act 2018 prohibits businesses from making false or misleading representations to consumers.
It’s important for consumers to know their rights and for businesses to be honest in their advertising.
Manufacture, sale or distribution of unregistered substances (VeryB****Man vs. *****Glow)
Have you seen videos on social media of people selling skincare products or miracle supplements that are not registered with the appropriate authorities?
Well, this is not only illegal but also dangerous. These unregistered products can harm your health. Concoctions mixed in unsanitary environments with promises of flawless skin and cures for various skin ailments.
This not only breaches Sec. 1 of the Food, Drugs and Related Products (Registration, etc.) Act, it also puts consumers’ health at serious risk.
As a buyer, make sure to only purchase ingestible or topical products that are registered with NAFDAC. And if you’re a manufacturer or distributor, remember to register your products legally.
Let us be better.
Small businesses are the backbone of Nigeria’s economy, but they must operate within the boundaries of the law. Engaging in illegal practices can lead to legal troubles that can damage reputations and disrupt operations.
To succeed in the long run, entrepreneurs must be diligent in following the laws and regulations that govern their businesses.
Promoting ethical and legal practices in Nigerian businesses requires a multi-pronged approach. Enhancing regulatory oversight and enforcement, addressing systemic corruption, and promoting transparency and accountability are essential steps.
Hiring legal counsel can be a helpful step in ensuring compliance. Remember, it’s not just about avoiding legal trouble; it’s about building sustainable, trustworthy, and prosperous businesses.
So, let’s run the marathon of entrepreneurship with integrity and resilience, and enjoy the sweet taste of success without the bitter aftertaste of legal issues.
This article is a part of Startup Suits, a collaborative project between TechCity and Cresthall Attorneys. Startup Suits is an intermittent Twitter Spaces chat hosted on @techcityng.
