What is the Consumer Protection Act?
Before the passing of the Act in 2009, consumer protection in South Africa was not sufficiently regulated. The Act now provides a legislative framework that protects the rights of consumers.
As stated in the Act, its main goals are to:
• Promote a fair, accessible and sustainable marketplace for consumer products and services
• Establish national norms and standards relating to consumer protection
• Provide for improved standards of consumer information
• Prohibit certain unfair marketing and business practices
• Promote responsible consumer behaviour
• Promote a legislative and enforcement framework relating to consumer transactions and agreements
Why should the Consumer Protection Act matter to you?
Every person in South Africa (no matter their occupation or background) can be classified as a consumer in certain contexts. The Act is therefore vital for ensuring that all our rights as consumers are protected and that we aren’t exploited by unethical service providers or marketers.
Do you know that, according to the Act, you as a consumer have the right to:
• Privacy. This includes a right to refuse unwanted direct marketing such as phone calls, SMS’s, letters, or spam emails.
• Choose your product. This includes the right to renew or cancel fixed term agreements; to request quotations for maintenance and repairs; to return defective goods and seek redress for unsatisfactory services; to cancel direct marketing contracts; to cancel reservations, bookings or orders; and to choose or examine goods, even after purchase and delivery.
• Fair and honest dealing. This includes the right to assume that suppliers have a legal right to sell products or services; to protection against pyramid schemes and related schemes and protection against false, misleading or deceptive representations by suppliers.
• Disclosure of information. This includes a right to receive information in plain, informative language, and a right to receive sales records.
• Fair and responsible marketing.
• Accountability by suppliers. This includes the right to full refunds in certain circumstances.
• Fair value, good quality and safety of products purchased. This includes the right to warranties; to receive warnings on the facts and nature of possible risks of a product; to have products monitored for safety and/or recalled, and to claim damages for injuries caused by unsafe or defective products.
By knowing your rights as a consumer, you are empowered to act whenever you feel like any supplier is treating you unfairly.
Why does the Consumer Protection Act matter for businesses?
Since all businesses are primarily designed to serve consumers, the Consumer Protection Act is just as vital as any other legislation governing business in South Africa. In order to run their enterprises legally and ethically, business owners need to have a sound knowledge of the Act’s contents. Businesses and its employees who deal with consumers should also make a point of familiarising themselves with the Act.
These are a few of the reasons why:
• By not complying with the Act, businesses open themselves up to legal action from consumers. Even if a business wasn’t aware that their actions didn’t comply with the Act, they could still be found guilty of wrongdoing. The consequences could include fines, hefty legal costs, and settlements.
• Not adhering to the Act could result in serious damage to a business’s reputation. An unhappy consumer is rarely good for business, especially in an age where people’s views spread like wildfire over social media. This could have a devastating impact on the size of the customer base and the profitability of a business, so ethical business owners have to ensure that their actions comply with the law.
• Customer service is key to staying ahead of the competition. In the increasingly competitive world of business, customer service is often what sets one business apart from another. By respecting the rights of consumers, businesses can build a reputation for customer service excellence, thereby attracting more customers.
• It is extremely important that businesses know that if an employee or agent is liable under the CPA for anything done or omitted in the course of that person’s employment or activities on behalf of the principal, the employer or principal is jointly and severally liable with that person.
Ultimately, a business’s success only comes from the way it treats its consumers.
What happens if there is a contravention of the Act?
Section112 states that an administrative fine may be imposed if a supplier is found guilty of prohibited conduct. The fine must not exceed the greater of 10% of the supplier’s annual turnover (total income during the preceding financial year) or R 1 million.