The Competition and Fair Trading Commission has ordered six companies, including Standard Bank and FDH Bank, to compensate affected customers and pay administrative penalties after finding evidence of unfair trading practices, misleading conduct and defective products.

By Edwin Mauluka

Six Malawian companies, including two commercial banks, have been ordered to refund consumers and pay administrative penalties after being found guilty of unfair trading practices and breaches of consumer protection laws.

The Competition and Fair Trading Commission (CFTC) has directed the companies to refund customers a combined MWK126 million and pay a further MWK361 million in administrative fines.

Speaking in Lilongwe on Monday, CFTC Chief Executive Officer Desmond Kaunda said the Commission’s 75th meeting, held on 8 May, considered and adjudicated cases involving anti-competitive conduct and unfair trading practices under the Competition and Fair Trading Act.

“Fourteen cases were considered, out of which three were closed at a preliminary stage due, among other reasons, to lack of merit and the early resolution of the issues at hand,” Kaunda said.

Standard Bank ordered to refund customer

Standard Bank Malawi was fined MWK100 million for engaging in unconscionable conduct, failing to disclose material information and using unfair consumer contract terms, in contravention of Sections 51(g), 51(p) and 52 of the Act.

The case stemmed from a complaint by a customer who took out a MWK4.5 million loan on 22 October 2021, repayable over three years. Although the loan term ended in October 2024, deductions from the customer’s account continued beyond that date.

Following its deliberations, the Commission ordered the bank to write off the loan, refund all amounts deducted from the customer’s account from November 2024 onwards and provide a detailed record of those deductions. The bank was also instructed to amend the disputed contract clause.

FDH Bank fined over insurance deductions

FDH Bank was fined MWK200 million for misleading conduct, unconscionable conduct, failure to disclose material information and unfair consumer contracts, contrary to Sections 51(d), 51(g), 51(p) and 52(1) of the Act.

According to the Commission, the bank altered insurance terms without customers’ consent, made unexplained deductions from an account and later failed to rectify the matter.

The Commission ordered FDH Bank to refund MWK200,000 that was erroneously deducted for the creation of Keyman Insurance and reverse a further MWK120 million deducted from the customer’s account.

Fertiliser supplier sanctioned

Nitro Phos Limited was fined MWK50 million for supplying defective fertiliser and excluding liability for the resulting damage, in breach of Sections 51(b) and 51(e) of the Act.

Kaunda said investigations found that certain batches of the company’s CAN fertiliser failed to meet required standards. The Malawi Bureau of Standards confirmed inconsistencies relating to product specifications, import approvals and compliance requirements.

“Market surveillance established that Nitro Phos fertiliser was widely distributed through agro-dealers, and multiple farmers across different districts reported similar crop damage following its application,” Kaunda said.

Submissions from distributors and affected farmers, he added, corroborated findings that defective fertiliser had been supplied to the market and was linked to crop losses.

The Commission ordered the company to compensate affected customers, including refunding purchase costs and addressing losses associated with the defective product.

Courier, dry cleaner and realtor also penalised

CTS Courier was fined MWK5 million for excluding liability for defective services and engaging in unconscionable conduct after failing to compensate two customers for items lost while in transit.

The company was ordered to reimburse the full market value of the lost or damaged goods and refund the original service charges.

Modern Dry Cleaners was fined MWK3 million after the Commission found it had damaged a customer’s clothing and relied on contract clauses that limited its liability.

According to Kaunda, the company initially offered MWK180,000 in compensation — equivalent to 10 times the cleaning fee — but the complainant rejected the amount as inadequate.

Investigations found that the company’s invoices excluded liability for damaged clothing, capped compensation at 10 times the cleaning fee and allowed for the disposal of uncollected garments without prior notice.

The Commission ordered the company to pay MWK1.4 million for the damaged clothing and refund MWK18,000 in cleaning charges.

Urban Realtors Limited was also fined MWK3 million and ordered to refund MWK3.8 million to a customer after being found guilty of misleading conduct, unconscionable conduct and failure to disclose material information in a land transaction.

The customer had purchased two plots valued at MWK2 million but was never allocated the land.

“The Commission found that the respondent failed to disclose material information, including timelines, risks and refund terms, thereby depriving the complainant of informed decision-making,” Kaunda said.

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