Eight consumer protection rights
The Consumer Protection Act (CPA) was signed into law by Kgalema Motlanthe (then President of South Africa) on 24 April 2009 and published in the government gazette on 29 April of the same year. The Act will be implemented in two phases and come into full
What do companies have to do to comply with the Act? We won’t know the exact obligations until regulations for the Act have been drafted. In the interim we’ll share a brief introduction to the Act as presented at the fifth AON Annual Health conference, held in Sandton on 29 September 2009. In her presentation titled Legislation and the Pending Environment, Esme Prins of Benguela Health discussed the Act and its implications for companies in the healthcare environment. We’ll focus on the eight consumer rights the Act is based on.
The “eight” consumer rights
The CPA is an extensive piece of legislation. “The act is applicable to any transaction, to any good being supplied, or service being performed,” said Prins. One of the interesting aspects of the Act is how it deals with conflicts. If an aspect is dealt with in more than one Act, then the CPA is written in such a way that the provisions in both Acts are complied with wherever possible. If this is not possible it urges compliance with one of the provisions without conflicting with the other. Failing that, says Prins, the Act favours “the provision extending the greater protection to the consumer!” There are eight consumer rights that are central to the Act. Each right (listed below) is described in detail in a section of the CPA. The consumer has:
· The right to equality – there are two main protections in this category. Suppliers of goods or services may not “unfairly” exclude people from access to goods or services, nor may they charge differentiated rates!
· The right to privacy – a consumer will be able to inform the marketer of particular goods or services that they no longer want to receive marketing communications. Any further approaches from the company will be a transgression of the CPA. The Act provides for a central registry where consumers can indicate their preference in this regard. Further provisions will regulate when direct marketers (specifically telemarketers) will be allowed to contact consumers at their homes.
· The right to choose – specific rights will be conferred on the consumer to allow them to ‘choose’ their supplier. This is a difficult concept to understand, but Prins used the example of a cell phone contract which mixes the purchase of a handset and the provision of airtime. The Act will also allow any fixed-term agreement to be cancelled with 20-days notice and will provide for ‘cool-off’ clauses in direct sales contracts.
· The right to disclosure of information
· The right to fair and responsible marketing – suppliers will have to comply with general standards for marketing. Loyalty programmes like Vitality, Voyager and e-Bucks will have to comply with separate regulations and will have to allow consumers to ‘access’ their rewards. Great news is that promotional competitions will also be regulated. Another provision of the Act is that the supplier will have to ensure the consumer can legally contract with it.
· The right to fair and honest dealings – this part of the Act combats unconscionable conduct such as force, coercion or undue influence by a supplier during the promotion, execution or enforcement of a contract. The Act will also outlaw pyramid schemes, chain letters and the like.
· The right to fair, just and reasonable terms and conditions – the Act prevents agreements that are one-sided against the consumer, adversely impact the consumer, or involve unfair or unreasonable waiving of rights, unjust terms or unreasonable prices! Terms and conditions will have to be in simple language – conspicuous and understandable! The Act absolutely prohibits the waiver of rights in terms of the Act, or the indemnifying of the supplier for gross negligence.
· The right to fair value, good quality and safety – consumers have the right to demand quality service!
Advice aspects remain under the FAIS Act
There are going to be a number of exemptions to the provisions in the Act. Among these are “goods and services promoted or supplied by the State,” said Prins. She added that juristic persons with an annual turnover that exceeded a ‘yet to be determined’ amount would be able to conduct business outside the Act. “Brokers fall under the FAIS Act, and therefore they are exempt,” said Prins. By the time the Act comes into full operation in October next year businesses will have no excuse for non-compliance. “Government is giving us time to change our operations and our practices in anticipation of the full implementation of the Act,” said Prins.
Editor’s thoughts: It’s going to be tough for businesses to comply with the provisions contained in the Consumer Protection Act. We welcome the regulation as a step towards forcing corporate South Africa to extend appropriate levels of service to their customers. Why should we accept the “take it or leave it” attitude entrenched at many of the country’s major companies. Will the CPA force banks and telecoms companies to treat their customers with more respect? Add your comments below, or send them to gareth@fanews.co.za
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