Date: March 31, 2011 - 9 am
Category: Advice, Alerts, Consumer Protection, Plain Language
The Consumer Protection Act came into force on 31 March 2011! Do you comply? The President of South African signed the Consumer Protection Act on 24 April 2009 and it was published in the government gazette on 29 April 2009. There have been delays but now it has commenced on 31 March 2011. You need to comply. You need to act now! We provide various Consumer Protection Act services – quick and practical solutions. We have extensive experience and expertise. You can download the Consumer Protection Act by clicking here.
The Act is going to have a huge impact on virtually every business in South Africa. We therefore thought that we would give you a heads up on some of the practical implications of this Act for you.
We’re going to refer to it as the Consumer Protection Act or just the Act. Many people still incorrectly refer to it as the Consumer Protection Bill rather than as the Consumer Protection Act. A Bill is a draft Act that has not yet been enacted.
What is the timeline? Regulations?
There are two things to bear in mind:
- There are currently no final regulations for the Act. The final regulations are expected on 31 March 2011 or during April 2011. It is difficult to consider all the implications of the Act without the final regulations. Once the regulations are out you will have to comply immediately.
- The Act commenced on 31 March 2011.
What the Labour Relations Act did for employees, the Customer Protection Act will do for consumers
The practical implications
So what does the Consumer Protection Act mean for you? Here are some of the most important things:
- South African consumers are the most protected consumers in the world. If you are consumer facing, this is not good news. However, as with many challenges it can also be seen as an opportunity. You are required to comply with the law, so why not do so and use the marketing opportunity to tell your customers how much you protect them. The businesses that comply first might well be viewed favourably by consumers.
- If your goods are shrink-wrapped (such as shrink-wrapped software) you might run into problems with regards the consumer’s right to inspect goods. The definition of goods includes intangible goods such as software.
- If you have fixed term agreements with your customers you may be required to give them notice prior to the expiry of the fixed term. This could place an administrative burden on you.
- All agreements with consumers must be in plain and understandable language. You are probably going to have to re-draft or amend your terms, your sale agreements and your advertisements into plain language. If you don’t, then your customers might be able to get out of the agreements, you might be guilty of unconscionable conduct, or you might be sued.
- The general theme of the Act is to protect the poor and the vulnerable and is in a way the Bill of Rights for the consumer.
- The Act alters the common law to be more favourable to consumers. By default, you give the consumer various warranties and indemnities. The warranties that you give in your agreements are no longer the only warranties that apply.
- The Act also applies to legal services provided by attorneys so it impacts on attorneys directly too. The ambit of the Act is very wide. Depending on what is contained in the regulations, a lessee may be viewed as a consumer and therefore lease agreements may need to comply with the Act. The Act does not apply to employment contracts. A franchisee will be a consumer and therefore franchise agreements will have to comply.
- The court will be given the power to redraft (well order you to change them actually) your contracts, terms of business, terms of sale and other consumer related terms. Radical I know – it took me a while to get my head around this. We can review your agreement to ensure compliance with the CPA.
- Courts must interpret standard form contracts in favour of consumers.
- Promotional competitions will be governed by this Act, rather than the Lotteries Act. The way in which promotional competitions was dealt with in the Lotteries Act was (with respect) a mess and it is a good thing that those provisions are being repealed. At least now we will have more certainty. You must prepare competition rules before you run in competition – be they online or offline.
- If you are currently ABC (Pty) Ltd, trading as XYZ, you will have to register the business name XYZ.
- The consumer protection provisions in the ECT Act are not repealed and therefore there is a potential overlap.
- You are going to have to revisit your refund policy.
- Your marketing campaigns are going to be affected and conducted in accordance with the Act.
- Mechanisms are put in place to enable consumers to enforce their rights.
Need help?
We can help you to determine the practical implications of the Consumer Protection Act for you and help you to comply. Read more about the Consumer Protection Act Services we offer. Otherwise please contact us.
Are you a consumer with a complaint?
If you are a consumer with a complaint you can:
- First try to sort out the issue with the company concerned.
- Lodge a complaint directly with the National Consumer Commission (NCC) by calling 0860 266 786.
- Visit the National Consumer Forum website and find out where you can complain.
- Send Michalsons Attorneys an email to CPAcompliant@michalsons.co.za asking for legal advise.
Tags: Consumer Protection, consumer protection act, consumer protection bill, cpa
39 Comments
nicolem on March 17, 2010 - 9 am
What is the definition of a refund – does a retail business have to refund cash or can they offer a credit note/gift voucher for returned goods?
nicolem on March 17, 2010 - 9 am
I refer to point 51.(j) (i) and (ii) in the CPA – can we still use an SA ID number to activate a Loyalty card? It is important to note that no retention of the ID document/or copy is required thereafter. Plus the only access to use is the Loyalty Card which is initially activated against this ID number as it is unique and cannot be duplicated on the system.
Nicholas Hall on March 26, 2010 - 2 pm
I apologies for the lateness of this response,
Unfortunately there isn’t a clear answer to your question. The Act does not give a definition of “refund”, and “refund” is used quite liberally in the Act without much clarification of what is exactly intended. As such, one would need to try and give a definition to refund by looking at the context that it is in, and intent of the clause and statute as a whole. Given that the Act was drafted to empower consumers and promote consumer rights, one would probably have to give definition to “refund” that benefited the consumer.
Basically I think it will come down to why the person is returning the product. If they are suffering from buyer’s remorse, or simply don’t want the item, then a non-cash refund would be fine. If the product was faulty or broken, then a cash refund would probably have to be offered alongside a non-cash refund. At the very least in such circumstances I don’t think a customer could be denied a cash refund if they demanded one.
I’m sorry that I can’t give you a clearer answer, to do so would require quite a lot more research into the topic. If you would like us to formally research the topic, please don’t hesitate to contact us at Michalsons Attorneys at instruct@michalsonsattorneys.com .
Regards
Nick
Nicholas Hall on March 26, 2010 - 3 pm
Section 51(j) talks about “depositing” the identity document. So long as the customer is not required to physically hand over the ID document to the supplier for keeping, the agreement won’t be illegal. The scheme you described above is fine, your only using an ID number to generate an account, you are not actually keeping the person physical copy of the ID.
Be aware that an ID number will fall under the definition of “personal information” under the Protection of Personal Information Bill (which is due to be enacted this year). When this Bill is enacted you will have to consider how you are processing this information, and may be required to change your processes, as it may fall foul of the Bill. For more information on this topic I suggest looking at some of the articles found here
Hope this answers your question.
Regards
Nick
Sindhu on February 03, 2011 - 3 pm
If a company (eg Joe’s Painting Services – contractor) is an approved service provider by a product manufacturer (eg Dulux), what recourse does a consumer have with the contractor and manufacturer, if the approved service provider does not perform to the standards and levels published by the product manufacturer?
southworth on March 30, 2011 - 10 pm
Hi
Could you shed some light on Direct Marketing under the CPA? We run a medium-sized supermarket and send out a monthly Specials flyer which is dropped in mailboxes in our surrounding areas. Does this constitute direct marketing and are newspaper ads exempt under the new regulations?
Thanks in advance
Nicholas Hall on April 04, 2011 - 10 am
Dropping flyers in postboxes constitutes ‘direct-marketing’ under the Act. So if someone puts a notice on their postbox that says “no flyers” or something similar, you cannot give them the flyer. Ads in newspapers do not count as direct marketing.
dancki on April 10, 2011 - 8 am
I have bought a car which has had huge electrical problems. I have had to spend in excess of R15 000 to fix the problems, all within the first 2 years of buying it. It was a second hand vehicle, but less than 5 years old. Bought from a dealer.
What are my rights withing the consumer protection act?
Nicholas Hall on April 11, 2011 - 12 pm
Hi, it all depends on when you purchased the car. If you bought it before the 1st April 2011 the CPA will not apply. However you should still contact the Motoring Ombudsmen and lay a complaint there. You can contact the motoring ombudsmen on : +27 12 841-2842 or via email at :mi.ombudsman@netactive.co.za. They also have a website located here: http://www.miosa.co.za/
seakle on April 14, 2011 - 8 am
Hi. I have a small business offering consulting and training. For marketing the training services we have build up a mailing list over a number of years. The mailers always have an unsubscribe option, over and above the fact people who receive the mail can just reply and ask to be taken from the list which we do immediately. Any reason why a recipient can still “report us for malicious spam under the CPA”?
John Giles on April 14, 2011 - 8 am
We currently have a opt-out regime. At the moment you need to make sure you comply with section 45 of the ECT Act and sections 12, 12, 28 and 32 of the CPA. But the law that really applies to email marketing is the Protection of Personal Information (POPI) Bill (not yet an Act). When POPI becomes law, email marketing will change from an opt-out regime to an opt-in regime.
Chanel on April 18, 2011 - 9 am
Hi
I took a cellphone contract out 9 months ago. The phone has been in for repairs 4 times already and the cellphone company can not seem to resolve the problem of the phone freezing, as well as it not being able to enter into competitions. The phone is faulty again. They tell me to cancel my contract I will have to pay for the rest of the months that is remaining on the contract. Is this correct, or has it changed with the new act ?
Your reply will be appreciated
SmkClaven on April 18, 2011 - 5 pm
Hi. I bought a car radio that stopped working and returned it to Hi-Fi Corporation. They told me that the product has to be repaired and not replaced, which I accepted. When I gave them the radio they told me that there is a fee involved. I have to pay for the repair and if I do not wish to proceed with the repairment I have to pay R400 for the trouble they went through (disassemble etc.). So either way whether it is fixed or not I have to pay for it! And the product is still under guarantee. And nowhere on that guarantee does it state that I have to pay for anything. If I have to pay what is the guarantee for? Then I can just go to any electrical store and get it fixed… So I want to know if I they can do that and if I have to pay them? Thanks.
cayla_mack on April 19, 2011 - 8 am
Hi. PLease help – does the “price u see is the price u pay” apply to cars on a showroom floor. For example while shopping around for cars i have spotted a new car at a dealership. THis dealership advertises the prices of their cars by means of stickers on the windscreen. The one particular car on the showroom floor looks to me as if it is missing a digit of the price on the windscreen. Can i hold the dealership to the price that is acutally advertised on the windscreen?
Nicholas Hall on April 20, 2011 - 9 am
Hi,
Under the CPA they would still be allowed to charge a “reasonable” cancellation fee. Unfortunately because you entered into the contract before the Act came into effect it will not apply.
Nicholas Hall on April 20, 2011 - 9 am
Hi,
If you would like the CPA to apply, We will need to know when you bought the goods. Was it before 1 April 2011 ?
Nicholas Hall on April 20, 2011 - 9 am
Short Answer: Yes, the price you see is the price you pay will apply to car dealers, however, if the price is incorrect and it would be reasonable for a consumer (thats you) to think that the price was in fact wrong (for example a car is sold for R1) then the Dealer will not be bound by it. Also the dealer will have an opportunity to rectify the mistake prior to you entering the contract.
wessels123 on April 25, 2011 - 2 pm
Hi! HELP! Stupid me went and took out a gym contract in February last year! i agreed to 10 months (you know how they force things) so it came to an end in Decmber! Lo and behold, i log onto my internet banking and there it is1 They deducted for this month! I have been working in the middle east since December! How could they just go to my SA bank and say that I am a stop order client this year??!! My friend said i should possibly ask here for advice. Im fuming! and there is not much i can do from this side??!!
rufinus on May 06, 2011 - 9 am
Can the CPA be used to compel a municipality to properly deliver services, e.g. filling in potholes in roads, keeping water quality up to standard, or providing any of the many other services which municipalities provide to residents?
rufinus on May 06, 2011 - 10 am
Just answered my own question. The CPA only applies to high-capacity municipalities, but to them, it does indeed apply. The application of the CPA to all other municipalities was deferred by 221 Consumer Protection Act (68/2008): Notice to defer the application of the Act to municipalities 3 34116
Query where one can find whether Knysna, for example, is a high, medium or low capacity municipality?
zax on May 06, 2011 - 10 pm
Hi, Ive been insured with Company ABC for six years and then recently switched to another insurance. Sent ABC my cancelation notification and phoned them aswell but yet still debited my account on 1st of the month normally paid in advance. How this new act protect me in a situation like this? what can i tell then to get my money refunded.
Coco on May 12, 2011 - 9 pm
quote:a lessee may be viewed as a consumer and therefore lease agreements may need to comply with the Act.
I am having a retail space lease signed for 3 years. Due to serious health issues I would rather sooner then later close the business. The lease is still for 1 more year and no option to terminate.
Today someone told me that with the new CPA this is not legal and I would have the right to give 20 days notice to terminate the lease agreement.
Would you agree or have more insight where I could read about is?
Thank you!
John Giles on May 13, 2011 - 8 am
You might be able to, but it depends on various factors that relate to your specific circumstances. Who signed the lease? Who is the landlord? When was the lease signed? And so on. We would need to consult with you properly in order to give you advise. The other problem is that the law is not yet certain. SAPOA is currently trying to get clarity from the powers that be. See http://www.property24.com/articles/more-cpa-clarity-for-property-sector/13518
Quicny on June 01, 2011 - 5 pm
HI there,
Great site. Quick question: If I take out a cellphone contract on Monday and then want to cancel it in 2 days time because I now have the money to buy the phone cash, how does that work?
The cellphone company wants to charge me the rest of the subscriptions (i.e. 24 months) in order to cancel. I thought the CPA says that a “reasonable” fee should be charged? I don’t see 24 months as reasonable.
What should I do?
Nicholas Hall on June 13, 2011 - 11 am
Hi,
You will need to raise a complaint with the National Consumer Commissioner that the cancellation fee is unfair. you can contact them on: 086 026 6786
SeanSylvia on July 12, 2011 - 12 pm
Can I ask a quick question, the act states that an unwanted good can be returned within 10 working days?
If i am selling someone a hi-end electronic good such as an iPad, I am obligated to comply with this law, which now leaves me with an opened and devalued product? I don’t understand how this makes sense to the people drafting the act????
tumelo on July 13, 2011 - 3 pm
I just bought a car which was involved in an accident (08-07-2011), the dealer made me aware of that. I bought it cash and I signed the form which stated no I have no guarantee. The problem is when I took it to wheel alignment they found out that 2 wheels had bubbles (11-07-2011). I had to change them at the spot because it was too risky to drive a car in that condition. It cost me a lot of money to change them, can I claim the money back from the dealer?
Nicholas Hall on July 20, 2011 - 11 am
Hi Sean,
Short answer: yes, but only in certain circumstances.
Long answer: read this post: http://www.michalsons.co.za/returns-under-the-consumer-protection-act/9191
Nicholas Hall on July 20, 2011 - 11 am
Hi Tumelo,
If you where made aware of the fact that the wheels had problems then no. If you where not told specifically then you might have a claim (regardless if you signed a waiver of guarantee or not). If the dealer gives you issues you will need to contact the NCC on: 0860266786
Shamrock on August 25, 2011 - 10 am
If a customer buys a product from you, pays with a credit card, returns the product for a valid reason, may he/she insist on a cash refund or can we as a business refund the customer via EFT?
Nicholas Hall on August 30, 2011 - 10 am
Hmmm, this is a good question. I don’t think the customer has the right to dictate how the refund gets made, as long as they get refunded. A very strict reading of the CPA could be interpreted to say that the customer does have the right to dictate how they should be refunded, however I don’t agree with this interpretation in this particular instance.
Vicky on October 22, 2011 - 10 am
In April 2011 I got quotes from various removal companies, accepted the lowest and paid the required deposit. Less than 48 hours before the agreed date to pick up my furniture, the company phoned and informed me that their truck had broken down and they could not fulfil their obligation to me. I had to find another company on very short notice and had to pay them immediately in full to ensure my furniture gets picked up. Can I hold the original company reliable under the CPA for the difference in cost I had incurred as a direct result of their breach of contract?
Thank you.
Nicholas Hall on October 26, 2011 - 2 pm
Hi Vicky,
Whilst I think you will be able to get your deposit back, I do not think that you will be able to get the original company to pay you the difference.
Shakera24 on December 22, 2011 - 1 pm
I purchased a second hand BMW from a BMW dealer in August 2011. I asked the right questions like does the vehicle have any damage or has it been involved in an accident, has it had any repairs and so forth. The salesman told me NO. So I proceeded to purchase the vehicle. I have had problems with the vehicle twice and when I took it to a another BMW dealership for repairs they tell me I have to pay for the repairs as it is not covered under the motor plan as the vehicle has been tampered with and the roof has been resprayed. When I called the BMW dealership saleman I bought the vehicle from he said that the other BMW dealer is wrong and he picked up my car from the other dealer and had it repaired.
How do I go about addressing this situation? How am I covered under the comsumer protection act? What do I need to do to return this defective vehicle to BMW and get my money back? Please help me understand what steps I should take to get BMW to take back this vehicle and give me my money back or supply me with a vehicle that was not involved in any accidents or had any prior repairs done to it?
Thank you
DBS on December 28, 2011 - 6 pm
Good day Nicholas. I am not sure if I am on the right track and if we must get a lawyer to assist. Our Company has sold a second hand notebook about 3 months ago to a customer. The notebook was in good working condition. After the customer bought a 3rd party program and wanted to install it on the notebook, it asked for service pack to be installed. They can not get it installed and now says it is something wrong with the notebook and want to take us to the cunsumer commision. The question is – are we liable for software from microsoft that does not want to load? Does the manufacturer conditions apply to the customer or our company?
Thank you in advance
Tommy
Nicholas Hall on January 09, 2012 - 1 pm
Hi Tommy,
Can I ask you to please drop me a mail at nicholas at michalsons dot co dot za ?
Nick
clarice on April 23, 2012 - 12 pm
Hi, I have a small ‘business’ making cosmetic products (body butter) and selling them to close friends and family only. It started out as a hobby to earn pocket money, but I am now thinking about selling it to the general public via an online shop and perhaps a few boutiques. What laws do I need to comply with (as a registered business)? Your reply will be greatly appreciated
John Giles on April 23, 2012 - 4 pm
Hi, I think you will find the following link very interesting and probably what you need http://onlinelegal.co.za/products/Online-Store-templates.html.
Esti Louw on May 14, 2012 - 11 am
Hi Clarice, you will obviously have to register your business in terms of the new Companies Act and comply with that piece of legislation. The other obvious piece of legislation that will affect you would be the Consumer Protection Act, that will govern the sale of your products. You will also have to comply with the ECT (Electronic Communication and Transactions Act) if you sell products online.