World Consumer Rights Day – commemorated on March 15 – creates awareness of the laws in place to protect consumers and the bodies established to champion their rights. Championing these rights is the National Consumer Commission.
How are consumer rights protected in South Africa?
The Consumer Protection Act (CPA) of 2008 came into effect in 2011 and the following month, the National Consumer Commission (NCC) began exercising its mandate to enforce the provisions of the act. These developments meant South African consumers now had a dedicated regulator to protect and advance their rights.
Apart from the NCC, South Africa has two ombud schemes accredited as mediators between suppliers and consumers. These are the Consumer Goods and Service Ombuds (mediates on matters relating to goods and services), and the Motor Industry Ombudsman of South Africa (mediates on disputes relating to motor vehicles).
Three things to guard against
The NCC lists three current threats to consumers:
Consumers entering into a fixed-term contract must understand the terms and conditions, the duration of the contract, and the terms for terminating the contract. In other words, do not sign the contract if you are unhappy with the terms and conditions.
When transacting online, always ensure that you do so with a legitimate business. Visiting review sites and seeing what other consumers are saying about the supplier may be beneficial.
Do not take delivery of defective goods (with a promise that the defect will be fixed at a later stage). Inspect the goods you are accepting delivery of. Remember that you have a right to safe, good-quality goods. If the goods fail to meet this, you are advised to take them back to the supplier for a full refund, repair or replacement.
Pyramid scheme warning
While pyramid schemes are prohibited under Section 43 of the CPA, NCC spokesperson Phetho Ntaba says consumers find it difficult to distinguish between genuine investments and pyramid schemes. She says that if the emphasis is on recruiting more people to the scheme, it is not a legitimate investment business.
The warning signs of illegal/ pyramid schemes: • Promises of high returns, especially above 20% of the repo rate (the rate at which the Reserve Bank lends money to commercial banks). • You are asked to recruit more members for you to earn your profit. • Pay-outs are made from new recruits, not from profits. • The scheme is not registered with the Financial Sector Conduct Authority as a financial service provider.
Championing the rights of consumers
The Office of the Consumer Goods and Services Ombud (CGSO) closed 19% more cases in 2021 than in the preceding year.
Established in line with the Consumer Protection Act, the CGSO enforces the Consumer Goods and Services Industry Code of Conduct by dealing with consumer complaints – free of charge.
Ouma Ramaru, CGSO media liaison unit’s training and outreach manager, says while the number of complaints decreased by 6.8% year-on-year, from 12 951 complaints in 2021 to 13 831 in 2020, 19% more cases were closed, thanks to improvements in resourcing.
In 2020, the CGSO closed 12 194 cases, compared with 14 516 in 2021.
Ramaru says their target is to close cases within 60 days.
Of the complaints received last year, 91% were lodged via the CGSO website. The balance was received via email (8%) and the call centre. The most complaints (48%) were received from Gauteng, followed by the Western Cape (18%).
Ramaru says most complaints are about defective goods, overcharging, the cancellation of agreements, goods or services that differ from the order or requirements, and goods and services not provided in time.
Prior to the lockdown in March 2020, online shopping accounted for 6% and 4% of complaints by sector for 2018/19 and 2019/20, respectively. However, Ramaru this jumped 23 percentage points in 12 months, with the e-commerce sector accounting for 27% of the complaints received in 2020/21.
“This trend has continued into the current financial year,” she says.
The most common complaint (45%) was the time it took for products to reach consumers.
“We attributed this to companies being unprepared for the online shopping rush in the wake of the first lockdown, but almost 24 months on, not much seems to have changed. This quarter alone, just under 20% of all complaints received (443) were related to online shopping. Among these were delivery issues (63%), followed by goods not as per description or order (9%).”
10 need-to-know consumer rights
1. Right to choose or examine goods Do not be threatened by ‘if it breaks, consider it sold’ notices in shops. The Consumer Protection Act (CPA) states that consumers may not be held liable for any loss or damage suffered by a supplier due to the consumer’s actions, unless it can be proven that the consumer was grossly negligent.
2. Right to request pre-authorisation for repairs or maintenance services Consumers have the right to request written cost estimates from suppliers for any repairs or maintenance services. Suppliers are not permitted to charge consumers for drawing up cost estimates/quotations. Consumers are not liable to pay for repairs or maintenance services done without their prior approval. In addition, suppliers are not permitted to charge consumers for any diagnostic work/inspections required in compiling cost estimates/quotations, unless there was prior agreement. Consumers have the right to pre-authorise or refuse any additional repairs or maintenance services.
3. Right to select suppliers Consumers have the right to choose the suppliers they want and to shop around for the best price for goods and services, and not to be required to enter into additional contracts to get these goods. Suppliers must allow consumers to buy only one item and are not permitted to force consumers to buy ‘bundled’ goods.
4. Right to protection against unconscionable conduct Suppliers are not permitted to use physical force against consumers, coercion, undue influence, pressure, duress, harassment, unfair tactics or any other similar conduct when marketing goods or services, supplying goods or services, negotiating, concluding, executing or enforcing agreement to supply goods and services, demanding or collecting payments for goods or services, or recovering goods or services from consumers. Suppliers are not permitted to take advantage of consumers who are unable to protect their interests due to mental or physical disability, poor literacy, ignorance or inability.
5. Display of prices Section 23 of the CPA regulates the disclosure or advertisements of the price of goods. A retailer may not display goods for sale without displaying the price. The price must be in rands, attached to the item, or clearly displayed on a shelf or display.
6. Right to protection against overselling and overbooking Suppliers are not permitted to accept payment or other consideration for goods or services if they do not intend supplying those goods or providing those services, or if they intend to supply goods that are materially different from the goods or services for which payment was accepted. Suppliers are required to honour the commitments made to supply specific goods or services on specified dates and times. Consumers have the right to demand refunds for full amounts paid in respect of commitments or reservations, together with interest, at prescribed rates, from the date of payment until the date of reimbursement.
7. Right to cancel reservations Consumers have the right to cancel any advance reservations, bookings or orders, while suppliers are entitled to request a reasonable advance deposit for reservations, bookings or orders, depending on the nature of the business and circumstances. Suppliers are also entitled to impose a reasonable charge for the cancellation of reservations, bookings or orders, depending on the nature of the business and specific circumstances.
8. Right to cancel or renew a fixed-term agreement Consumers have the right to cancel fixed-term agreements upon expiry of the contract period, without penalty or charge. However, they must give suppliers 20 business days’ notice – in writing or other recorded means. If notice is not given, suppliers must extend fixed-term agreements on a month-to-month basis. While consumers may cancel fixed-term agreements during a contract period by giving the supplier 20 business days’ written notice, reasonable penalties may apply.
9. Right to full disclosure Consumers have the right to request the unit cost of goods and services, so as to avoid any ‘hidden’ costs. Suppliers are required to specify the duration of any promotions in catalogues or brochures, failing which consumers have the right to purchase the goods or services at the specified prices. Consumers have the right to demand paying the lower price for goods displaying two varying prices.
10. Right to implied warranty of quality In any transaction or agreement pertaining to the supply of goods to consumers, it is an implied provision that the producer or importer, distributor and retailer each warrant that the goods comply with the requirements and standards of being safe, of good quality and durability. Consumers are permitted to return goods to suppliers, without penalty and at the suppliers’ risk and expense, within a period of six months after delivery. If the goods are of inferior quality, unsafe or defective, suppliers are obliged to refund, repair or replace the goods.
Four NCC milestones
NCC spokesperson Phetho Ntaba says four recent NCC achievements have increased the level of consumer protection enjoyed by South Africans:
The promulgation of Regulation 350 (prohibiting suppliers from engaging in price gouging) during Covid-19 not only resulted in successful prosecution by the NCC, but also saw suppliers self-correcting and adhering to the regulations.
The Commission successfully investigated Ford Motor Company of South Africa. The company was fined R35m for providing vehicles that were not safe at the time of distribution. This related to the 56 Ford Kuga vehicles, distributed between 2014 and 2017, that caught fire. Over and above the R35m administrative fine, the affected consumers had their cars replaced or repaired and also received an amount of R50 000 each as compensation, resulting in a combined amount of R2 509 179 as redress to consumers.
The curtailment of the influx of non-compliant textile goods into South Africa, as per Section 24 of the CPA (read with Regulation 6), is another example worth noting. This enforcement ensured that the NCC curbs the proliferation of non-compliant textiles into the country.
Working with other regulators, the NCC successfully investigated and prosecuted the operators of the Up Money pyramid scheme. “This led to the collapse of the scheme that masqueraded as a grocery stokvel,” says Ntaba.