South-African consumers given teeth
South Africans are soon to be protected by some of the most far-reaching consumer law in the world. The Consumer Protection Act was signed into law by outgoing President Kgalema Motlanthe on 24 April 2009. It will come into action in October 2010 when all the necessary structures and processes have been put in place.
The new law is a radical overhaul of previous laws, and fundamentally changes how consumers are protected and the responsibilities of suppliers.
Previously consumer protection was based on a “buyer beware” principle, but the new Act will protect consumers from exploitation and unfair practices by unscrupulous businesses, and also empower consumers to make wise purchasing decisions.
Good news for consumers:
South Africans will have a host of new rights as consumers and will have the power to enforce them. For example, they will legally be able to cancel contracts if they are not satisfied with the terms. Further, suppliers will not be allowed to automatically renew contracts. Consumers will also be protected from unscrupulous businesses that pressure them into waiving the obligations and liability of the supplier in the terms of agreement.
Supplier responsibilities:
From the supplier point of view, the onus has shifted from the consumer proving that they were hard done by, to the supplier needing to prove that they are not at fault.
More specifically, amongst other things, companies will have to make sure their contracts and business processes are up to date. For instance, in the case of a fixed term contract, a supplier will have to alert a customer that the contract is coming to an end within a certain amount of time, ahead of the expiry date. Suppliers will also have to inform the customer of any changes to the terms of the contract at this stage. Unless they receive written authorisation from the customer to renew, they will have to continue the service on a month-to-month basis when the contract expires.
Another example is that companies will have to make sure their direct marketing activities do not contravene the consumer's right to privacy, which is upheld in the new law. This includes only carrying out direct marketing activities at certain times of the day. In addition, certain marketing tactics such as bait marketing will be illegal.
An added complication for both consumers and suppliers is that the Act will only come into full operation in October 2010, once the National Consumer Commission is set up and begins implementing the law. From a consumer point of view, the Act is not retrospective, according to the Department of Trade and Industry. This means that consumers aren't protected by the new laws at the moment, but should definitely be brushing up on their consumer rights knowledge in the meantime.
From a supplier point of view, companies have the next 18 months to make sure they comply with the Act. A challenge is that much of the detail of the Act's implementation will only be decided on in the next few months. So, using the fixed term example above, the minister of trade and industry needs to specify the exact time period before a contract expires that the customer needs to be contacted.
The Act is to be applauded for the massive protection of South African consumers.
Suppliers should take the view that excellent customer service makes good business sense, and see complying with the law as a great opportunity to make sure they are offering their customers the best service levels.”
If you want to know more, both consumers and suppliers can refer to the getclosure! website, www.getclosure.co.za to keep up to date with ongoing developments. In addition, consumers can use the portal to complain about bad service and compliment good service, and suppliers can use the site to discreetly manage online complaints.
(www.getclosure.co.za), an independent online consumer affairs portal that assists with the discreet resolution of customer complaints. More than 827 South African suppliers – including leading banks, retailers, cell phone companies, insurers and car dealers – are making active use of the getclosure! service.
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