THE CONSUMER PROTECTION ACT

The Consumer Protection Act was issued in 2008 and came into force fully on 31 March 2011. It is supported by regulations issued by the Minister of Trade and Industry, and provides for the protection of consumers whenever they purchase goods and services. It covers most of the consumer rights that are internationally recognised as “The United Nations Guidelines for Consumer Protection” adopted in 1985, as well as the Consumer Food Rights which were prepared by Consumers International and adopted by the United Nations in 1996.
It is possible to give only a brief overview of the Act in the space available here, and if you are interested you should refer to the Act itself and its regulations, or to the more comprehensive books available on the subject.

Applicability and coverage

The Act applies to most transactions with individual members of the general public for goods and services (including those provided by the authorities), and to the promotion (advertising, etc) of such goods and services in South Africa. It does not apply to credit agreements (which are governed by the National Credit Act) but it does cover those goods and services supplied under credit agreements. The Act also covers franchises and certain classes of juristic persons, but those are beyond the scope of this booklet.

Fundamental consumer rights

The largest chapter of the Act (Chapter 2) deals with your nine fundamental rights as a consumer, as outlined below. All the rights are qualified in the interests of fairness, and you should therefore not regard the brief statements here as absolutes. With rights come responsibilities, and if you attempt to exploit the Act unreasonably you are unlikely to get very far.

  1. a) Right of equality in consumer market
    • All consumers must be treated equally.
    • Suppliers may not vary the availability, quality or pricing of goods and services in a discriminatory manner to you, irrespective of your race, gender, marital status, etc (as per the Constitution).
  1. b) Consumer’s right to privacy
  • Direct marketing (e.g. via the telephone) may not take place on Sundays or public holidays, or outside the hours of 09:00-12:00 on Saturdays, and 08:00-19:00 on weekdays (these hours are set by regulation, and are subject to change)
  • You can opt out of direct marketing by notifying a central registry, which direct marketers are obliged to heed.
  1. c) Consumers’ right to choose
  • You are entitled to shop around freely for the best deal.
  • You can cancel fixed-term contracts by giving 20 business days written notice. In the absence of advance notification from your supplier, fixed contracts will continue after expiry on a month-by-month basis under the same terms and conditions. The supplier may not renew a fixed-term contract for a further fixed term unless you agree to it.
  • Repair and maintenance service providers may not charge you for drawing up estimates or quotations, and may not charge for work done beyond what you have authorised.
  • You can cancel direct marketing transactions without reason or penalty during a cooling off period of 5 business days. Any money paid must be refunded to you in full within 15 business days of cancellation.
  • You can cancel advance reservations, bookings and orders without incurring unreasonable cancellation fees.
  • You can reject goods before or after purchase, if they are faulty or do not correspond with a display sample or catalogue description.
  • You can reject goods if they are not delivered at the agreed time and/or place.
  • You can keep unsolicited goods and not pay for them unless the supplier informs you of an error within 10 business days, and collects the goods within a further 20 business days.
  1. d) Right to disclosure and information
  • Notices, conditions and agreements must be legible and in plain language, without technical or legalistic jargon.
  • Prices must be displayed for all goods and services on offer, and the displayed prices must be honoured (the lowest price, if more than one).
  • Promotional prices must be honoured during stated promotional periods.
  • Product labelling and trade descriptions must not be misleading.
  • The presence of genetically modified organisms must be declared for certain classes of products.
  • Reconditioned or grey market goods must be declared as such.
  • You can demand receipts and/or invoices as confirmation of purchases made (except from street vendors)
  • Deliverers, installers and direct marketers visiting you must identify themselves on request.
  1. e) Right to fair and responsible marketing
  • Suppliers may not market goods and services in a false or misleading manner.
  • Bait marketing is prohibited (i.e. advertising something that is not available or at a cheaper price than is charged).
  • Negative option marketing is prohibited (i.e. where you are assumed to accept an offer or condition unless you expressly decline it)
  • Catalogue and mail-order suppliers must provide you with appropriate information, including complaints and returns policies, before an order is accepted.
  • Trade coupons and promotional offers must deliver what they promise.
  • Customer loyalty programmes must deliver what they promise.
  • You may not be informed that you have won a competition where no competition was in fact conducted, or where receiving the prize is subject to additional requirements.
  • Organizers of promotional competitions may not require you to submit entries through premium-rated SMS or other communication channels from which they derive income.
  • Alternative work schemes, or work-from-home schemes, may not make false claims, and may not charge any fees for work not actually assigned to you.
  1. f) Right to fair and honest dealing
  • Suppliers must not use physical force, duress, harassment or unfair tactics against you with regard to marketing, negotiation, supply, payment or recovery of goods and services.
  • Suppliers must not lie, conceal, exaggerate, or otherwise mislead you regarding their goods and services.
  • A wide range of fraudulent financial and get-rich schemes, as well as pyramid schemes, multiplication schemes, chain letters and the like are prohibited.
  • You have the right to assume that suppliers are entitled to supply the goods and services they sell. The supplier is liable for any third-party claims in that regard.
  • The conduct of auctions is tightly controlled by the Act and its Regulations.
  • If a supplier substitutes goods with your approval, then all other aspects of the original sales agreement (e.g. guarantees) must remain unchanged.
  • Suppliers must not sell or accept reservations for products or services that they have no reasonable chance of supplying. If, despite this, the supplier is unable to fulfil the obligation to you at the specified time and date, and cannot provide an alternative acceptable to you, then that supplier must refund you all monies paid plus interest, and in addition compensate you for direct costs incurred as a result of the failure to supply.
  1. g) Right to fair, just and reasonable terms and conditions
  • One-sided contracts that favour the supplier and force you unreasonably to assume obligations or waive supplier’s liability are not permitted.
  • Any terms in consumer agreements that limit the risk or liability of the supplier, pass this on to you, or require you to indemnify the supplier, must be conspicuous, written in plain language, and drawn to your attention before you sign or pay.
  • You are entitled to receive a free copy, or free electronic access to a copy of written agreements.
  • Suppliers must keep records (e.g. recordings of telephone conversations) of non-written agreements.
  • The imposition of certain listed terms and conditions that restrict your rights in agreements and transactions are prohibited. If included, and even if signed by you, such terms and conditions are considered to be void (unenforceable).
  1. h) Right to fair value, good quality and safety
  • Suppliers providing services to you must do so timeously (or provide timely notice of unavoidable delays) in a manner and quality that you are entitled to expect, use any goods and materials that are of high quality and free from defects, and return your property in at least as good a condition as it was at the start of the work. If not, you can demand that the supplier rectifies any defects, or refunds a reasonable portion of the price you paid.
  • Any goods supplied (except at auctions) must be reasonably suitable for the intended purpose, of good quality, in working order, durable, free from defects, and comply with standards issued by the SABS or other public regulation.
  • In addition to any other warranty, there is an implied warranty of 6 months on all goods supplied, during which time you may return defective or unsafe goods and demand (at your own discretion) repair, replacement, or refund of the price originally paid.
  • If the supplier repairs such returned goods and the problem persists or recurs within 3 months after the repair, the supplier must replace the goods, or refund the price you originally paid for the goods.
  • There is a similar implied warranty of 3 months on every new or reconditioned part installed during repair or maintenance work.
  • The supplier of any activity or facility that is subject to any unusual risk, or a risk that could cause serious injury or death, must draw this fact to your attention up front in a way that is conspicuous and in plain language.
  • Suppliers of products that require safe disposal in terms of legislation must accept the return of such goods for disposal.
  • All persons in the supply chain are jointly and severally liable for any harm caused to you by unsafe goods, product failures, defects, hazards, inadequate warnings or instructions, irrespective of whether the suppliers were negligent or not (in the past persons claiming compensation had the difficult task of proving that the suppliers were negligent).
  1. i) Supplier’s accountability to consumers
  • If you purchase goods on a lay-by and the supplier cannot deliver them when you have paid up in full, then you can choose whether to accept an offer of equivalent or superior goods at no extra cost, or whether to demand double your money back for the breach of contract.
  • The unredeemed portion of prepaid certificates, credits and vouchers (e.g. gift vouchers) must be redeemable for at least three years after issue.
  • If you pay a once-off or periodic membership fee to secure services (such as access to a gym) more than 25 business days in advance, and the facility is closed, you must be refunded the unused balance of the membership fee within 5 business days of closure.
  • If you make any prepayment, deposit, or membership fee, the supplier is responsible for safeguarding it on your behalf until it is repaid or used up.
  • If you are required to pay a deposit for a bottle or container, then the supplier must refund you the same amount when you return it.
  • A supplier who replaces any components while repairing or servicing your goods or property must return the replaced components to you unless you decline them.

How can you enforce your rights as a consumer?

  • As a first step you should always give your supplier the opportunity to set things right, as indicated later in this booklet. The Act provides a number of routes you can follow if the supplier’s response is unsatisfactory.
  • The Act provides for industry groups to develop Codes of Conduct and to appoint industry ombuds to deal with consumer complaints. Where such an ombud exists, he/she should be your next target. The Department of Trade and Industry and some provinces have consumer protection offices which you may approach next. Some provinces have Consumer Courts to which the matter can be escalated further. After that you may approach the National Consumer Commission, which may as a last resort refer the matter to the National Consumer Tribunal for a ruling. Claims for compensation can be pursued as civil cases through the courts. The “T” is left off on the proof – The Act also makes provision for accreditation of consumer protection groups who may be able to assist you in different ways (e.g. with advice, class action suits, etc).
  • The Act allows for concurrent jurisdiction, which means that the same case can be dealt with simultaneously by the different authorities. In practice, however, these bodies are likely to steer you through the bottom-up approach described above.

How must businesses conduct their affairs?

  • A supplier may only do business with you under a properly registered business name, or under the supplier’s real name.
  • The primary place (i.e. street address) at which the business is conducted must be indicated on all documentation, including circulars.
  • Suppliers must comply with applicable industry codes of conduct prescribed by the Minister of Trade and Industry.

Consumer Protection Institutions

  • The Act established the National Consumer Commission as an organ of state, but outside the public service.
  • The Commission is responsible for implementing the Act, developing codes of practice relating to the Act, promoting legislative reform, promoting consumer protection within organs of state, conducting research and providing public information, liasing with other regulatory authorities at all levels, and advising the Minister of Trade and Industry.
  • The Act also widens the scope of the National Consumer Tribunal originally established under the National Credit Act with powers of adjudication.
  • The Act recognises provincial consumer protection authorities, which have powers to act within their respective provinces and to refer unresolved disputes to provincial consumer courts.

Enforcement

  • The National Consumer Commission is empowered to monitor the consumer market, investigate alleged prohibited conduct and offences, and to issue and enforce compliance notices.
  • The Commission can hear disputes and promote their informal resolution, but may not adjudicate on them. If all parties agree, the Commission can submit the agreement to a court or to the National Consumer Tribunal be issued as a consent order. If the parties cannot be brought to agreement then the Commission can refer the matter to a provincial consumer court or to the National Consumer Tribunal for adjudication.
  • Issues regarding equality are dealt with by the Equity Court.