Because we are all consumers, in one way or another, the new Consumer Protection Act (CPA) has bearing on each and every individual in this country. Helaine Leggat, founder and owner of Legate ICT Consulting, is an Information Communication Technology lawyer specialising in information security, governance and privacy, disciplines which require a working knowledge of Records and Information Management (RIM). She addresses what the new legislation means for the ordinary consumer.
The Act, which came into full force and effect in April 2011, replaces the provisions of five previous acts in a new and simplified manner. There are nine basic consumer rights, all of which have important implications for both the consumer and the supplier.
In a bid to dispel any confusion surrounding the new legislation, this second part in a series of articles aims to explain exactly how the new legislation will impact you, as a consumer.
Who Does the CPA apply to?
As the name implies, the CPA is designed to protect you, the consumer. But first of all, who is a consumer? Consumers are persons to whom goods or services are marketed, who have entered into transactions with suppliers and are users of particular goods or recipients or beneficiaries of services, said Leggat.
She goes on to explain that the CPA applies to every transaction occurring within South Africa, as well as the promotion or supply of any goods and services occurring within the country.
Two types of consumers are afforded protection in terms of the Act. These are ‘natural’ persons (human beings) in all the above-mentioned circumstances, and ‘juristic’ persons (bodies corporate, partnerships, associations or trusts) who have asset value or annual turnover, at the time of the transaction, under the ‘threshold’ determined by the Minister of Trade and Industry. The threshold is currently R2m.
The CPA has very broad application, and all South Africans should be aware of their key consumer rights and obligations, she said.
Who May Lodge a Complaint?
According to the new legislation, you may lodge complaint if you are an individual, an authorised person acting on behalf of another, a person acting as a member or in the interest of an affected group or class or a person acting in the public interest.
The Nine Rights of Consumers
The nine key consumer rights, as enshrined in the CPA, are as follows:
1. Right to Equality in the Consumer Market and Protection Against Discriminatory Marketing Practices;
2. Right to Privacy;
3. Right to Choose;
4. Right to Disclosure of Information;
5. Right to Fair and Responsible Marketing;
6. Right to Fair and Honest Dealing;
7. Right to Fair, Just and Reasonable Terms and Conditions;
8. Right to Fair Value, Good Quality and Safety;
9. Right to Accountability by Suppliers.
Rights numbers 4, 5 and 6 will be discussed.
Consumer Right No.4: The Right to Disclosure of Information
The right to disclosure of information means, having the right to information in plain and understandable language. Consumers have the right to demand that any contract or agreement entered into is presented in easily-understood and plain language, said Leggat.
She goes on to explain that consumers have the right to request the unit cost of goods and services, so as to avoid any ‘hidden costs’. In addition, they have the right to demand to pay the lower price for goods displaying two varying prices. By the same token, suppliers are not permitted to charge consumers the higher price for the same goods, Leggat adds.
The right to disclosure of information means that suppliers are required to display labelling and descriptions of products in such a way that do not mislead the consumer. A consumer has a right to know basic information regarding the product, such as the country of origin and expiry dates, Leggat noted.
Suppliers are also required to disclose the presence of any genetically modified ingredients, in accordance with international and South African law.
Finally, in terms of sales records, consumers have the right to demand confirmation of purchases made from suppliers, such as receipts or invoices which include details such as contact information, VAT registration numbers, name and description of goods, total price of transaction, applicable taxes etc.
Consumer Right No.5: Right to Fair and Responsible Marketing
This right protects the consumer against misleading marketing in terms of pricing, properties or uses of goods or services. The consumer has a right to be informed by the supplier about limitations in respect of the availability of goods or services with advertising.
Consumers are also protected against negative option marketing and direct marketing, said Leggat. If consumers receive unsolicited (unwanted) goods or services, they are under no obligation to pay for these goods or services. Consumers also have a right to cancel agreements within the cooling-off period of five working days, and suppliers are obliged, in terms of the law, to inform consumers of this right.
The Right to Fair and Responsible Marketing also protects the consumer in the case of catalogue marketing (an agreement initiated by the consumer where the consumer is not given the opportunity to inspect the goods), trade coupons or similar promotions and customer loyalty programmes. Leggat explained: In these cases, the consumer has the right to know pertinent information such as supplier contact details, currency for sales, delivery arrangements, cancellation, return, exchange and refund policy, and instructions on lodging a complaint.
Consumer Right No. 6: Right to Fair and Honest Dealing
This consumer right protects the consumer against unconscionable conduct. This means behaviour that is unethical or improper, said Leggat. It means suppliers are not allowed to use physical force, coercion, undue influence, pressure, harassment or unfair tactics when marketing, supplying or recovering goods from consumers, or when collecting payment for goods or services.
Consumers are protected against false, misleading or deceptive representations, and suppliers are not permitted to use exaggeration, innuendo or ambiguity when referring to goods or services.
This right also protects consumers against fraudulent schemes and offers, as well as pyramid and related schemes. In terms of the law, persons are not permitted to promote or knowingly join, enter into or participate in schemes such as multiplication, pyramid or chain letter schemes, or any other fraudulent scams, said Leggat.
Finally, consumers have the basic right to assume that suppliers have the legal right or authority to supply goods and products that are on sale, or promoted, by the suppliers.
How Does the Ordinary Consumer Ensure Compliance?
Compliance and risk mitigation apply not only to suppliers, but also to consumers, said Michael Springer, managing director of Pitney Bowes South Africa. The simplest and most effective way for consumers, especially juristic person consumers, to comply with the CPA is to manage their records in a responsible way. While there is no obligation imposed on natural person consumers to keep records, it makes sense that they do so.
Pitney Bowes, in consultation with legal experts in the field such as Leggat, is at the forefront of thought leadership in the field of compliance and risk mitigation through records and information management.
There is an increasing need for individuals to manage their digital and paper information, said Springer. The CPA is there to protect the consumer, and to promote a fair, accessible and sustainable marketplace for consumer products and services. However, the onus is on individual consumers to know and understand their rights, and to manage the information they have at hand accordingly.
He noted that the outcome of any consumer complaint is highly dependent on the ability to prove the facts at issue. This further emphasises the importance of good record-keeping and the ability to locate and produce records such as invoices, statements and delivery notes, he concluded.
