Chapter 8

CHAPTER 8
CONSUMER PROTECTION &
BAD DEBTS

LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE

 Chapter 8

CONSUMER PROTECTION

Definition: All activities targeted towards protecting consumer rights is known as consumer protection.

WHAT IS CONSUMER LEGISLATION?

These are laws, acts or rules which are set by the government to protect consumers from unfair trading
activities.

REASONS FOR CONSUMER PROTECTION?

1. Unfair trading practices of businesses are kept in check.

2. Consumers can make claims or sue the company if the product or service purchased is not as per the
advertisement.
3. Consumers feel more protected that the products will not endanger their health or life.
4. At times, the consumer protection act may safeguard religious beliefs of consumers. (Eg. Writing
HALAL)

RIGHTS OF THE CONSUMERS

1. Not to be charges extra.

2. Should not get expired items.
3. Should be given a reasonable after sales services.
4. Should not get item items with harmful ingredients (without the customers knowing it)
5. Should not get unhygienic items.
6. Should not be treated rudely.
7. Should be given goods of proper measurement.
8. Seller should not make a misleading advertisement during the time of selling.

HOW THE CONSUMERS ARE SECURED FROM ANY MALPRACTICES OF A BUSINESS

1. Self-awareness by consumers by checking the price, quantity, expiry date and ingredients before
buying the product or service.
2. Government legislations, agencies such as the Ministry of Consumer Affairs & Competition
Commission.
3. Consumer associations who test products to find any defects.
4. Consumer councils where consumers are members and they can place complains.
5. Radio and TV awareness programs.

LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE

 Chapter 8

BAD DEBTS

Bad debts are debts or due of customers that cannot be recovered. Bad debts increase business
expenditure and therefore affects the profitability of businesses. Moreover, it reduced cash in-flow and
therefore also affects the liquidity of businesses.

WAYS TO REDUCE BAD DEBTS

1. Offering early settlement cash discounts to customers.

2. Charging interest on overdue accounts.
3. Withholding future supplies on credit until the previous debts are cleared.
4. Chasing debtors on a timely manners.

THANK YOU!

LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE

 Chapter 8

QUESTION PRACTICE

1. Mention 5 rights of the consumers.

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2. What are the ways consumers are protected?

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3. Describe the ways in which bad debts can be reduced?

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LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE