Protection of Customers – The New Act

The Consumer Protection Act 68 of 2008 has been enacted and will be in effect from 31 March 2011. The provisions of the Act are far –reaching and consumers and suppliers alike will need to be familiar with the provisions to protect themselves under the new law.

INTRODUCTION

The rationale behind the Act is to provide for a fair, accessible and sustainable marketplace for consumer products and services and, for that purpose, to establish national norms and standards relating to consumer protection.

THE ACT

The Act seeks to provide the legal framework within which consumers will be given greater bargaining power and protection within the South African economy The Act provides consumers with the rights to equality in the consumer market, to proper disclosure and information, fair marketing practices with reasonable terms and conditions. The Act also enshrines the right to quality goods and services.

The Act provides for the protection of consumers, not only in relation to goods but also to services.

The following transactions are exempt from scrutiny under the Act –

* goods or services that are promoted or supplied to the State;

* instances where the consumer is a juristic person (ie a Close Corporation or Company) whose asset value or annual turnover equals/exceeds the threshold value determined by the Minister;

* a credit agreement under the National Credit Act, 2005

* where services are to be supplied under an employment contract giving effect to a collective bargaining agreement; or a collective agreement as set out in the Labour Relations Act, 1995.

SO WHAT DOES ALL OF THIS MEAN?

The Act provides that the consumer is entitled to fair marketing practices which are not discriminatory; such marketing practices include bait marketing, direct marketing and customer loyalty programmes. In addition, consumers will be afforded a mandatory cooling off period for any transaction concluded after direct marketing took place.

Subject to a reasonable cancellation charge, consumers are allowed, to cancel advance reservations, bookings or orders. This fee is not applicable however, in the event of the consumers’ death or hospitalisation.

Importantly, consumers are entitled to have all contracts, standard terms and conditions as well as indemnification notices set out in plain language. Overbooking or overselling is unlawful and a consumer who experiences this from a supplier may be entitled to seek a refund of any amount paid to the supplier, as well as to consequential damages sustained by the consumer.

Contractually, clauses which are unreasonable or one-sided are unlawful. Contractual clauses or indemnification signs in which a supplier seeks to limit liability must be compliant with the Act.

The Act greatly extends liability for all suppliers within the supply chain for damage caused by goods, including importers and retailers. The amendments to the law under the Act also may impact significantly on the use of the voetstoets clause.

Whilst this note is intended to give the public a basic appreciation of the contents of the new Act, it is in no way to be relied upon. The Regulations to the Act have yet to be published and for the Courts to interpret the provisions contained in the Act.

About the authorAndrea Goldman is a Partner at Goldman Schultz Attorneys. For more information contact info@gslaw.co.za or www.gslaw.co.za