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Thread: MARKETING IN GENERAL UNDER THE NCA

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    Silver Member Eugene's Avatar
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    MARKETING IN GENERAL UNDER THE NCA

    Undoubtedly the NCA results in many markets, companies, small businesses, banks and the consumer , manufacturing and services industry at large having to change their respective business practices, so as to ensure compliance with its many provisions. This will undoubtedly result in increased costs due to the additional administrative burdens which the ACT will create – and which ultimately will be passed onto the Consumer.

    For example- all amendments to agreements whether written or not will now have to be reduced to writing and signed by the Consumer , and a copy thereof provided to him within a prescribed time period- if not- such amendment is of no force;

    A consumer now has the right to cancel certain agreements and contracts , including ones which are continuous in nature, such as his gym membership or his cell phone contract, simply by giving the required prescribed number of days notice- ranging from 5-10 days in some cases and 1 month in others- kiss your long term contracts good bye.

    Discounting and trade incentives to your customers are also a history, and so are those great loyalty programmers which are prevalent into day’s competitive market.

    Promotional competition will be more rigourlesly controlled and additional labelling requirements will have to be satisfied. Overbooking and unfulfilled reservations are now subject to strict control and if breached – damages , including consequential will; be due and awarded to the aggrieved consumer. Telesales and buying your goodies over the internet are controlled and the use of customer lists and information harvesting , negative marketing and other such new age practices are outlawed.


    The last biggest concern which has been raised by the Legal Brains is this- if you, the Consumer , have a complaint and seek compensation – you have a choice of forums who have the rights (jurisdiction) to hear your complaint

    – the National Consumer Commission;
    – an ombudsman;
    – a Tribunal; or
    – a Provincial consumer court.


    All of the above are forums which are not in the true sense – courts of law- rather they are quasi- judicial bodies who are not obliged to follow and apply proper court procedure and due process. They can declare and set there own rules and apply their own principles and approach and are not bound to apply the audi alterim partem principle in terms of which all who are charged and who are brought before a court – are to be given a fair opportunity to be heard and to state their case and their defense to any such claim.

    This will most definitely result in a separation of powers and will give rise the classical Kangaroo Court scenario where decisions and rulings will be handed down without following proper legal process.

    It gets worse- these forums have the right to impose administrative penalties- being 10% of the respondent's annual turnover during the preceding financial year AND R 1 000 000.

    Extract from the submission paper by Enrico du Plessis from the Marketing Assosciation ofSouth Africa

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    just me duncan drennan's Avatar
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    Audi alteram partem (no it is not a new car model):

    Audi alteram partem (or audiatur et altera pars) is a Latin phrase that means, literally, hear the other side, but is generally interpreted in English as hear both sides. It stands for the principle that no one should be condemned without a hearing in which they are given the opportunity to respond to the accusations against them.

    From Wikipedia
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    Turn ideas into products | The Art of Engineering blog

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    Eugene,
    When you say "loyalty" programs, are you referring to "Voyager Miles" programs?
    Cell phone contract terms - Are you absolute sure?
    Yvonne

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    Silver Member Eugene's Avatar
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    Yvonne, I have sent a mail to Enrico to enquire about the specifics as I am not sure what is meant by "loyalty programs" he is referring to. The submission paper also included some extracts pertaining to the Consumer Protection Bill that will in all probability see the light before the end of the year. will investigate some more and send to a PM.

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    No feedback on this?

    I have tried to read and understand the credit act and it is way beyond my understanding.

    Has anyone had a new credit application form drawn up since the NCA came into law?

    I was told that the wording of the credit application was now vital should your company wish to sue for non payment of an account, even if your company was not required to register with the NCA?

    Our company supplied goods and accepted a cheque in payment, cheque is R.D. Telephoned and advised that the goods must be returned immediately until cheque is honored, and the goods have been sold.

    To my understanding it is classified as fraud to issue a cheque knowingly when funds are not available to meet the cheque.

    What recourse does a company have, when clearly no agreement was made to sell the goods on terms.

    Yvonne


    Yvonne

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    Site Caretaker Dave A's Avatar
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    Eugene took a moment to PM me that he's had a little crisis involving a faulty geyser and his computer - apparently they don't go together.

    An unmet cheque is still a classic collection case, I think. At worst, it might be incidental credit, but I'm sure someone will clarify that.

    The biggest irritation is that you can only recover your legal costs at the prescribed tariff, as opposed to on an attorney-client scale (unless you have one of those stamps made up for all the details to be filled in on the back of the cheque).

    On the fraud side, I believe that only applies if it is a cash cheque.
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member Eugene's Avatar
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    Yvonne, sorry for the delay in response. I ran into some trouble (like Dave mentioned that a laptop computer and a burst geyser does not gel). With regards to the RD cheque, gave a look at section 4(5):

    Section 4(5)
    If a person sells any goods or services and accepts, as full payment for those goods
    (a) a cheque or similar instrument upon which payment is subsequently refused for any reason; or
    (b) a charge by or on behalf of the buyer against a credit facility in terms of which a third person is the credit provider, and that credit provider subsequently refuses that charge for any reason,

    the resulting debt owed to the seller by the issuer of that cheque or charge does not constitute a credit agreement for any purpose of this Act.


    It is thus clear that it was never the intention that the parties enter into a credit agreement (and I believe that this is the main reason why the legislature inserted this section). I also believe that it could not be classified as and incidental credit agreement, but an interesting question would be if the buyer now wants to pay off the amount of the RD cheque by means of installments. The wording of the subsection suggests that “the resulting debt owed to the seller by the issuer of that cheque does not constitute a credit agreement for any purpose of this Act” – it is unsure if the paying by installments now would suggest an incidental credit agreement.

    As to your criminal remedies: nail the bugger as it constitutes fraud. There is some conflicting case law regarding the issue if a cheque made out to “cash” is a pre-requisite for opening a fraud case. I have consulted my (old) Department of Justice Prosecutor notes and it seems that any cheque tendered as payment that RD’s, constitutes fraud.

    One must also be careful when labeling a mere information document filled in by a customer as a “credit application” (although we often use that in practice). Seeing that your company does not extend credit, I would suggest that you include as part of your sales invoice that your company retains ownership until all goods are paid in full.

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