Analysing the “No Refund Policy” of Service Providers in Nigeria, Vis-à-Vis the Provisions of the Federal Competition and Consumer Protection Act


On the 28th of July, 2021, Patrick Chukwuma, a legal practitioner, filed a Suit that has not been filed before. He instituted an action against Peace Mass Transit Limited, challenging the latter’s policy of “no refund of money after payment”. The brief facts of the case that led to the Suit occurred on the 10th of February, 2021, when Patrick Chukwuma bought a ticket from the Obollor-Afor branch of Peace Mass Transit Limited to convey him to Enugu.

After a two-hour delay occasioned by the absence of passengers, the Plaintiff returned to the ticketing office and asked for a refund of the N500.00 he paid as transport fare. However, staff of the Defendant refused to refund the money, insisting that their company policy was that money paid for transport fare cannot be returned to the passenger, citing the statement written on their ticket to that effect as conclusive proof of their position.

This disquisition seeks to explain the legality or otherwise of the above policy vis-à-vis the provisions of the Federal Competition and Consumer Protection Act (FCCPA), employing the above case as a case study.


The Federal Competition and Consumer Protection Commission, empowered by the Federal Competition and Consumer Protection Act, is the body charged with regulating commercial activities in Nigeria, with the mandate to promote fair, efficient and competitive markets in the Nigerian economy to facilitate access to safe products by all citizens and secure the protection of rights for all consumers[1].

Section 1 of the Federal Competition and Consumer Protection Act provides for the objectives thus:

The objectives of this Act are to-

  1. Promote and maintain competitive markets in the Nigerian economy;
  2. Promote economic efficiency;
  3. Protect and promote the interests and welfare of consumers by providing consumers with wider variety of quality products at competitive prices;
  4. Prohibit restrictive or unfair business practices which prevent, restrict or distort competition or constitute an abuse of a dominant position of market power in Nigeria; and
  5. Contribute to the sustainable development of the Nigerian economy.

While section 2 provides for the scope of the application of the Act thus:

  1. Except as may be indicated otherwise, this Act applies to all undertakings and all commercial activities within, or having effect within, Nigeria.
  2. This Act also applies to and is binding upon-
  3. A body corporate or agency of the government of the federation or a body corporate or agency of a subdivision of the federation, if the body corporate or agency engages in commercial activities;
  4. A body corporate in which a government of the federation or government of a state or a body corporate or agency of government of the federation or any state or local government has a controlling interest where such a body corporate engages in economic activities; and
  5. All commercial activities aimed at making profit and geared towards the satisfaction of demand from the public.

A meticulous reading of the above provisions indicates that the provisions of the FCCPA apply to ALL commercial activities in Nigeria, and it is the primary law on questions of consumer transactions in the country. The supremacy of the FCCPA in regulating commercial transactions and protecting consumer rights is provided for in section 104 of the FCCPA thus;

“Notwithstanding the provisions of any other law but subject to the provisions of the Constitution of the Federal Republic of Nigeria, in all matters relating to competition and consumer protection, the provisions of this Act shall override the provisions of any other law.”

What this means is that policies by service providers or terms and conditions included in commercial transactions, must conform with the provisions of the FCCPA.

Back to the case instituted by Patrick Chukwuma against Peace Mass Transit Limited, the sole question before the Court was whether the Defendant’s (Peace Mass Transit Limited) policy of “no refund of money after payment” violates the provision of section 120 of the FCCPA, especially when the contractual obligation to convey the Plaintiff to his preferred destination was terminated. A thorough analysis of the provisions of the FCCPA shows that apart from section 120, section 129 also deals with the subject matter of this article. The provisions of the above-mentioned sections are reproduced verbatim below.

Section 120 of the Federal Competition and Consumer Protection Act provides that:

  1. A consumer shall have the right to cancel any advance booking, reservation or order for any goods or services, subject to a reasonable charge for cancellation of the order or reservation by the supplier or service provider.
  2. For the purpose of this section, a charge is unreasonable if it exceeds a fair amount in the circumstances, having regard to-
  3. The nature of the goods or services that were reserved, booked or ordered;
  4. The length of notice of cancellation provided by the consumer;
  5. The reasonable potential for the supplier or service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice, and the time of the cancelled reservation, booking or order, and
  6. The general practice of the relevant industry.
  7. A supplier or service provider may not impose any cancellation fee in respect of a booking, reservation or order if the consumer is unable to honour the booking, reservation or order because of the death or hospitalization of the person for whom, or for whose benefit the booking, reservation or order was made.

Section 129 of the Federal Competition and Consumer Protection Act also provides that:

  1. An undertaking shall not make a transaction or agreement subject to any term or condition if-
  2. Its general purpose or effect is to defeat the purposes and policy of this Act, mislead or deceive the consumer, or subject a consumer to fraudulent conduct;
  3. It directly or indirectly purports to-
  4. Waive or deprive a consumer of a right to return defective goods or any right set out in this Act,
  5. Avoid the undertaking’s obligation or duty under this Act,
  6. Set aside or override the effect of any provision of this Act,
  7. Authorize the undertaking to do anything that is unlawful under this Act, and
  8. Or fail to do anything that is required under this Act,
  9. It purports to-
  10. Limit or exempt the undertaking from liability for any loss directly or indirectly attributable to the gross negligence of the undertaking or any person acting for or controlled by the undertaking,
  11. Constitute an assumption of risk or liability by a consumer for the said loss,
  12. Impose an obligation on a consumer to pay for damage, or
  13. Otherwise assume the risk of handling any goods displayed by the supplier;
  14. It falsely expresses an acknowledgement by the consumer that before an agreement was made, no representations or warranties were made in connection with the agreement by the undertaking or a person acting on behalf of the undertaking or the consumer has received goods or services, or a document that is required by this Act to be delivered to the consumer, and
  15. It expresses an agreement by the consumer to-
  16. Deposit with the undertaking, or with any other person at the direction of the undertaking, an identity document, credit or debit card, bank account or automatic teller machine access card, or any similar identifying document or device, and
  17. Provide a personal identification code or number to be used to access an account.
  18. A purported transaction or agreement, provision, term or condition of a transaction or agreement, or notice to which a transaction or agreement is purported to be subject, is void to the extent that it contravenes the provisions of this section.

A community reading of the above-quoted provisions reveals that the policy of ‘no refund of money after payment’ by service providers offends the provisions of section 120 of the FCCPA. Pursuant to section 120, what a service provider is entitled to in the situation where a consumer cancels a booking or reservation is a reasonable charge, subject to some conditions, and not the entire sum paid by the consumer. The implication of the foregoing is that the inclusion of this policy in the terms and conditions of service providers contravenes section 129 of the FCCPA.

This was the decision of the Court in our case study where the Court held that the policy of ‘no refund of money after payment’ by the Defendant is illegal, null and void in light of the provisions of sections 120, 104, 129(1)(a) and (b)(iii) of the FCCPA. The Court further ordered the Defendant to pay the sum of N500,000.00 as damages to the Plaintiff.


The decision reached in the above case is that of a High Court and is still subject to appeal to two other superior Courts. However, the judgement in this case, is sound, cogent and convincing, and very likely to be affirmed by the Court of appeal and Supreme Court, should the Defendant exercise its right of appeal.

This case puts service providers in Nigeria on notice, that more citizens are now alive to their rights as consumers, and will not hesitate to enforce same should the need arise. It should also serve as a piece of advice to service providers to acquaint themselves with the provisions of the FCCPA, and engage the services of a lawyer before drafting company policy, or including terms and conditions in commercial transactions.


  1. The explanatory memorandum of the Federal Competition and Consumer Protection Act, 2018

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