What is the Consumer Protection Act?
The Consumer Protection Act (the “CPA”) has been promulgated into law to regulate the terms in which consumers enjoy special protection against suppliers, which main goals are to:
- Prohibit certain unfair marketing and business practices;
- Promote a legislative and enforcement framework referring to consumer transactions and agreements;
- Provide for improved standards of consumer information;
- Establish norms and standards relating to consumer protection; and
- To promote a fair, accessible and sustainable marketplace for consumer products and services.
While the CPA notably amplifies consumer protection, which is greatly welcomed, the act also led to some unforeseen consequences such as increased prices as wholesalers, retailers and producers are required to take steps to mitigate their potential losses and payments of civil judgments.
Who is regarded as a consumer?
A consumer includes a person, whether natural or juristic, to whom goods and services are supplied. The act further extends the term “consumer” to mean a person other than one who entered into a purchase agreement with a supplier and paid for goods and services.
The act further provides protection for businesses insofar their annual turnover does not exceed R2 million. They may also lodge complaints to the various ombuds or Provincial Consumer Affairs offices for redress.
Several of the foremost common complaints by consumers include, but are not limited to:
- No return/no refund/warranties signs on business premises of in their agreements (Section 56),
- Failure to disclose goods and services offered (particularly in the day and age of online shopping)
- Proof of receipts/payment (section 26)
Some measures to prevent this include:
- “Having a return and refund policy and complaints procedure displayed;
- Have a complaints desk and dedicated person to attend to consumer complaints;
- Ensure that staff is correctly trained on the provisions of the Consumer Protection Act, and
- Keep records of all complaints and resolutions.”
Damage causing goods as a liability in terms of common law and the act
The significant difference between the legal position codified in Section 61 of the CPA and the common law is that in terms of the common law, any person who is a link in the supply chain of the goods to a consumer must have been negligent or in breach of an explicit or implied contractual term.
Whereas the act imposes a no-fault liability on any producer, manufacturer, importer, retailer or a distributor of any goods for any damage caused wholly or because of the supplying of any unsafe goods, product failure, defect or hazard in any goods, irrespective whether the damages suffered is because of negligence by the supplier. Therefore, it flows that the consumer can choose from who and all persons in the supply chain in solidum to be held accountable for the harm suffered by that person.
Consumer Protection and why it matters for businesses
Seeing that businesses are primarily designed to serve their consumers, the CPA is therefore at the forefront of legislation governing businesses and operating it legally and ethically. Thus businesses should make a point of familiarising themselves as well as their employees with the act, as a failure may result in:
- Businesses could expose themselves to litigation from consumers, whether or not they were aware of the non-compliance with the Act;
- Failure to adhere may cause severe damage to a business’s reputation, particularly with social media having a significant effect on people’s views, which in turn could have a devastating impact on the size of the customer base and profitability;
- Customer service is key to staying ahead of the competition. By respecting the rights of the consumers, a business can build a reputation for consumer service excellence, thereby attracting more customers, especially during the pandemic.
The manner in which the business treats its consumers is thus paramount.
Need assistance with the Consumer Protection Act in your business? Contact your nearest SEESA Legal Advisor to assist you. Alternatively, “SMS” the word “SEESA” to 45776 and we will contact you.
About the author:
Avian May started his career at SEESA in 2021 and is currently a Legal Advisor at SEESA’s George office . He obtained his LLB degree from the University of the Western Cape in 2016 and was admitted as an attorney in 2020.
Resources:
- Section 26, 56 and 61 of the Consumer Protection Act 68 of 2008;
- https://www.thencc.gov.za