The Consumer Protection Act

The Consumer Protection Act

From 2011 and after the implementation of the Consumer Protection Act (“The Act” or “CPA”), South African consumers will be among the best protected consumers in the world. South Africa, a company with a diverse population and history of persecution has been the breeding ground for many empires preying on not only the uninformed but also the misfortunate consumers.

The CPA will have far-reaching implications, much further than most business operators currently anticipate by promoting and advancing the Social and Economic welfare of consumers in South Africa with regard to both products and services, and in essence, prohibit certain unfair marketing and business practices in order to protect against exploitation in respect of transactions concluded and the promotion of goods within the Republic of South Africa. The Act places great emphasis on honest and fair dealings as well as responsible conduct of service providers within the Republic of South Africa.

The Acting Deputy Director General in the Department of Trade and Industry, Ms Nomfundo Maseti, says “the primary purpose of the Act is to protect consumers from exploitation and unfair practices in the marketplace from unscrupulous businesses, and to empower consumers to make wise purchasing decisions. It achieves this by introducing, amongst others, a system of product liability and improved redress.”

“Producers, distributors or suppliers, will be liable for any damages in the form of death, injury, loss, or damage to property and economic loss, to the consumer or third party. This Act decriminalises certain conduct and subjects it to administrative sanctions, while also enables consumers to demand refund if the goods are of inferior quality”.

“Consumers may return the goods to the supplier, without penalty and at the supplier’s risk and expense, if the goods fail to meet the required standard”, added Maseti.

The CPA is a further development of South African Law which challenges both product and service-based industries which focuses on promoting a fair, accessible and sustainable platform upon which service providers and retailers must conform to and for that purpose:

• ·         Establish national norms and standards of consumer information,
• ·         To prohibit unfair marketing and business practices
• ·         To promote responsible consumer behaviour
• ·         To promote a consistent legislative and enforcement framework relating to customer transactions and agreements

The Act extends further than just to transactions of a sales and service based nature but also includes the way in which these companies market themselves to the end-user consumers.

The Act is a definite step in the direction of ensuring the protection and equality of all consumers. Some of the provisions, although seemingly Draconian in nature expose companies which otherwise would have been indemnified against risks inherent to their trade including both their acts and omissions.

It is extremely important for the interpretation of the Act to understand the definition clauses of both the Supplier as well as the Consumer.

Definition of a Supplier:

A person or an entity who markets Goods and Services, irrespective of whether the supplier:

• Resides or has its principal office within or outside the Republic
• Operates on a for-profit basis or otherwise
• Is an individual, company, close corporation, partnership, trust, organ of state, an entity owned or directed by an organ of state, a person contracted or licensed by an organ of state … or is a public-private partnership
• Is required or licensed in terms of any public regulation to make the supply of the particular goods or services available.

Definition of a Consumer:

• A  person to whom particular goods or services are marketed in the ordinary course of the supplier’s business
• A  person who has entered into a transaction with a supplier in the ordinary course of the supplier’s business
• A user of those particular goods or recipient or beneficiary of those particular services, irrespective whether that user, recipient or beneficiary was a party to a transaction …
• A  franchisee in terms of a franchise agreement

Author:             Bradley Berman