Businesses should take the Consumer Protection Act seriously and not doubt its enforcement by government, warns Divorcelink owner and Pravda & Knowles Attorneys consultant Roger Knowles.

The Act means a complete change in attitude for everyone in business, and requires immediate planning for massive capacity, faster systems and the ability to provide customers with the service they are now entitled to, he adds. Knowles, in association with other specialists, is monitoring the introduction of the new Act and how business and society can understand and engage with it.

Consumers have known about the Act for a long time and are already rattling the cages of corporate South Africa, he says. However, despite the challenges and legal changes, the Act presents opportunities for businesses, particularly those in information technology.

He explains that the vision and purpose of the Act are to empower the man in the street and it is creating a situation where David (the consumer) can and will take on and is taking on Goliath (business).

Until April this year, if goods or services were acquired, the legal slogan was ‘caveat emptor’, or ‘let the buyer beware’. Now it is ‘let the seller beware’. Providers of goods and services have to ensure that consumers understand exactly what it is they are being provided with and what they can expect it to mean to them or their businesses (sole proprietor-ships).

Similarly, all contracts now require total transparency, are to be written in plain and simple language and signatories must fully understand what they are agreeing to. Further, contracts cannot have clauses to avoid complying with the Act.

He describes the Act as the country’s first ‘American-style legislation’, comparable to the huge power given to the US consumer, although he clarifies that South Africa will not have the huge damages claims prevalent in the US.
If there is a defect in a product or fail-ure to pass on proper instructions and guidance regarding the product and it causes damage, the person who suffered as a result does not have to prove fault on the business’s part anymore. However, consumers still have to prove that they suffered damage or harm.

Further, the whole supply chain can be sued – held jointly, proportionately or severally liable. He says one of the worrying issues for employers is that, where an individual in the business becomes liable in terms of the Act, the employer is jointly and severally liable, except where the offence is criminal. Hence, every employee needs to know how his or her job could impact on this, says Knowles.

Consumers also need to be informed of any potential danger in using the product.

Be Prepared
The Act empowers the Consumer Commission and the courts to develop it and to develop the common law to achieve the objectives of the Act. If there is an ambiguity, it instructs the courts to choose the interpretation that best favours the consumer.

The commission is required in terms of the Act to prepare practice manuals for every trade and industry, unless a manual is already in place. As the Act does not provide a list of requirements for businesses to comply with, Knowles calls for businesses to prepare their own practice manuals, work out how the Act affects their particular business and how to comply.

Although government is exempted as a user, its employers are consumers and, thus, can claim if affected by damaged goods.

Juristic persons are only considered consumers if they have a turnover of less than R2-million a year. He adds that, according to Section 14, any fixed-term contract can be cancelled with a 20-day notice, although juristic persons are excluded from this. So, for example, if someone buys a cellphone in the name of the juristic person or company, as opposed to doing so in his or her own name, the contract cannot be cancelled. Credit agreements are not covered, but anything sold in terms of the credit agree-ment is covered in the Act.

Reportedly, a number of industries are applying for exemption from the Act.

In the Consumer’s Hands
In the past, suppliers could decide whether to send faulty products to agents to be checked or repaired, or to replace or refund. Consumers now hold that decision.

Consumers also have rights: to equality in the consumer market; to privacy; to fair and responsible marketing; to choose products, suppliers and services (a business is required to get a consumer’s consent before undertaking work/repairs valued at an amount greater than R1); to disclosure of information on prices and the nature of products/services; to fair and honest dealing (pyramid or multiplication schemes are illegal); to fair, just and reasonable terms of conditions; to fair value, good quality and safety (almost every product is guaranteed for nothing less than six months); besides other rights.

Consumers also have the right to be shielded from unwanted marketing. Reportedly, the National Consumer Commission can establish a registry or recognise a registry that enables consumers to register a pre-emptive block against direct marketing. Businesses will have to interface their own database with the register’s database, possibly on a daily basis, to avoid sending marketing to those on the register, he says.

Knowles was speaking at information and communication technology company Dimension Data’s Accelerate 2011.

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