CONSUMER PROTECTION IN SOUTH AFRICA
Consumer Protection – We have all been there. Saw the ‘professional quality’ power tool at a very reasonable price, bought it, used it for a few hours, only for it to break down. I have personal experience in buying an item from a large Cell Phone Operator, the item did not work as advertised, and they refused to refund me. When I took it up with the manager, I was bullied by being reminded of their ‘no cash refund’ policy. Even after I quoted sections of the CPA, all I got was a smile and a hint – ‘talk to our legal department…’
Admittingly, that was back in 2011, when the CPA was still in its infancy stage. Has anything changed? What does the CPA offer us as vulnerable consumers?
A previous blog on the matter dealt with the rights of a consumer. Let us thus focus on the practical implication of the act on our lives.
HOW DOES THE CONSUMER PROTECTION ACT HELP US?
The CPA is applicable to any individual or entity with an annual turnover of up to R3mil. It covers transactions in goods and services, including the marketing thereof, occurring within the Republic of South Africa. It applies to both physical and online purchases. The Act is, however, not applicable in the following cases:
- Goods or services promoted or supplied to the state;
- Industry-wide exemption being granted to regulatory authorities – this may be done by the minister from time to time;
- Credit agreements, in terms of the National Credit Act, but not agreements for goods or services;
- Services under employment contracts;
- Agreements giving effect to collective bargaining agreements; and
- Agreements giving effect to bargaining agreements (Section 213 of the Labour Relations Act).
DOES THE CONSUMER PROTECTION ACT GUARANTEE THE QUALITY OF GOODS?
The CPA states that any goods or products originating from a transaction within the Republic will have a six months implied warranty. Furthermore, this implied warranty allows consumers to return failed, unsafe or defective goods and get the seller to repair it, replace it or get a full refund. The best things about this is that the consumer, and not the seller or supplier, elects which of these options they would prefer. So, do not allow a retailer to push you towards accepting a repair. You have the option to demand your money back.
Having said that, there is a grey area around this. There is still debate on whether goods that were not paid for in full, qualifies for a refund. An example is a cell phone that is bought under 24-month contract; is it yours? Can you demand a full refund on something that is still technically the property of the seller? The jury is still out…
However, suppliers also have rights. This 6-month warranty is only applicable if the goods were returned due to a manufacturing defect, or if a totally unsuitable product was sold to you. If you fiddled or damaged the goods, the seller may charge for repairs. The seller also has a reasonable time to have the goods inspected.
Furthermore, it is important to note that there is no general right of return. For example, when a consumer buys an item from a store and the next day they regret spending so much money, or simply do not like the item, the consumer cannot return the item simply because they have had a change of heart. Some retailers do allow consumers to do this, but it is not a consumer’s legal right to do so. A change of heart is not a legal reason to return an item.
WHAT IS MEANT BY ‘TRANSACTIONS ORIGINATING WITHIN SOUTH AFRICA’?
Broadly speaking, if a transaction took place within the borders of the country, ie, both the seller and customer are stationed in the country, then the CPA applies. However, again there are some grey areas. What about so-called ‘grey’ goods? “Grey” goods or parallel imports, are goods that have been imported into a country through unofficial or unauthorized distribution channels. Grey goods are not illegal. They are, however, not imported and sold though the official distributer. The CPA covers this – if the goods, grey or not, was sold to you by an entity inside the Republic, the CPA applies.
There is also the modern tendency for consumers to order goods from online stores overseas. While one can make an argument that the order was placed from within South Africa, the seller is overseas and is not bound by the laws of this country. Trying to use the CPA to recover damages suffered will thus be futile.
HOW DO I KNOW IF I AM BUYING A QUALITY PRODUCT?
There are so many products of dubious quality out there. Especially with the flurry of Chinese imports. Packaging shouts out ‘professional quality’ and carries all kinds of unknown marks of ‘approval’. How do you know that the product you are buying is suitable for the intended use? The DIY enthusiast who needs an electric drill for ad hoc work around the house, versus the construction worker who needs the drill as part of a bridge building project. The best advice will be to do research before you go out to buy a product. Look for online reviews, or forums where products are discussed.
Let logic prevail – if you need an industrial strength product, a chain store is not the place to buy it. If the price is very low, it may be indicative of poor quality. The CPA expects suppliers to train their sales staff property. They should be able to provide professional and accurate guidance to ensure you buy the product you need. Ask questions and record the answers on a note pad if required. If you end up buying an inferior or unsuitable product based on the advice of a salesperson, you will need to prove it.
WHAT ABOUT THE SMALL PRINT – CAN A COMPANY INCLUDE AN EXEMPTION CLAUSE IN AN AGREEMENT?
By law nobody can prevent a company from adding exemption clauses to an agreement. However, since the advent of the CPA the basic rights offered by this act cannot be exempted. The law trumps any ‘no cash refund’ or ‘no guarantee’ or similar clauses, should such clauses be in contravention of the Act. Shops with a huge generalised ‘no refunds’ sign at the till, aikona…
WHAT ARE THE KEY POINTS OF THE CONSUMER PROTECTION ACT?
Manuals and other product information:
Information must be in plain and understandable language.
Unwanted marketing is restricted. Discriminatory marketing is prohibited. Marketing efforts must be factual and accurate and may not mislead you in any way. The CPA also enables pre-emptive blocking of email, phone or printed direct marketing.
The CPA provides a five business day cooling-off period for transactions that come from direct marketing i.e. transactions not initiated by yourself, and includes both verbal and written agreements. You have the right to cancel without reason or penalty, by notice to the supplier in writing, or another recorded manner and form. This also applies to bookings and reservations, but you may be liable for a “reasonable charge”.
The Act prevents the automatic renewal of a fixed term contract, but you have the responsibility to terminate or renew the contract. Failing this, the contract will continue on a month on month basis on the new terms as notified by the supplier. You can also cancel a contract before its expiry date by providing a 20 day notice, but will be liable for “a reasonable cancellation penalty”.
Overselling and Overbooking:
A supplier may not accept payment for goods or services if it has no reasonable intention to supply the goods or services, or if it intends to supply goods or services that are materially different to those the Consumer has paid for. The supplier can be penalised if they fail to deliver goods, services or reservations for which they have accepted payment. However, the supplier will not be penalised if similar goods or services are offered, or if circumstances beyond the suppliers control lead to the breach and the supplier took reasonable steps to inform the Consumer.
Implied Warranty of Quality:
The CPA provides for an implied warranty of quality. The producer/importer, distributor and retailer each warrant that the goods comply with the requirements and standards outlined in the CPA. Failed, unsafe or defective goods may be returned to the supplier within six months after the delivery of the goods to you. You have the choice to be refunded, or have the goods replaced or repaired.
Prepaid Certificates, Credits and Vouchers:
Any gift or similar vouchers will expire either upon redemption or after three years, which prevents vouchers under the CPA from expiring before you can use them. In addition, the CPA provides that prepaid vouchers are the property of the bearer until such time that the voucher is redeemed.
DOES THE CONSUMER PROTECTION ACT HAVE TEETH?
If you feel your rights as a consumer have been violated, you can lay a complaint with the National Consumer Commission. A complaint form can be downloaded from this website.
However, it is always a good idea to take your case up with the supplier first. In many cases, the correct approach works wonders and the problem can get sorted out locally.