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Thread: K Motlanthe approves Consumer Protection Bill

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    K Motlanthe approves Consumer Protection Bill

    President Motlanthe approved Consumer Protection Bill

    30 April 2009

    President Kgalema Motlanthe has signed into law the Consumer Protection Bill. The primary purpose of the new Act is to prevent exploitation or harm on consumers and to promote the social well being of consumers. The Act seeks to create and promote an economic environment that supports and strengthens a culture of consumer rights and responsibilities, whilst through the measures adopted therein; it seeks to promote fair, efficient and transparent market place for consumers and business. The Consumer Protection Act will introduce general principles of consumer protection and serves as an overarching governing statement on consumer protection matters in 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.

    Consumers are now empowered to cancel contracts if not satisfied with the terms of contract. Further, consumers will have a final whether they would like their contracts to be renewed or not. Consumers will now be protected from the unscrupulous businesses that tend to induce them to waive the obligations and liability of the supplier in terms of agreement.

    For the first time, the Act promotes consumer activism by providing for accreditation of consumer groups for lodging complaints on behalf of consumers and provide for possible financial support for activities such as consumer advice, education, publications, research and alternative dispute resolution through mediation or conciliation, noted Maseti.

    For implementation purposes, the National Consumer Commission, which is an enforcement /investigative body on consumer protection issues, will be established after 12 months from the date of signing of the Bill by the President. The National Consumer Commission will commence implementation of the Act after the period of 18 months from the date of signing of the Bill by the President. It is envisaged that the provided time period will afford business reasonable time to align their trading practices for the purposes of complying with the Act.

    The Act replaces, in a new and simplified manner, existing provisions from five acts, including the Consumer Affairs (Unfair Business Practices) Act of 1988, Trade Practices Act of 1976, Sales and Service Matters Act of 1964, Price Control Act of 1964, and Merchandise Marks Act of 1941 (specifically Sections 2-13, and 16-17).

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    Last edited by Dave A; 01-May-09 at 08:24 AM.

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    It is a pity about the timeline given. I am sure most of us have a few suppliers in mind when it comes to these much needed changes. However the consumer council will have to take into consideration that there staff cannot perform simple tasks as is.

    It is true that you do get one or two staff members that are truly outstanding. However it has been my experience that most of the staff members are unmotivated, slow and will neglect complaints if you do not interact constantly.

    Secondly it will prove necessary for government to take on more stuff and improve facilities. Above all training programs must be implemented for the system to work effectively.

    I also belief that the consumer council is not the only entity that can do with upgrading, other government entities such as the CCMA is also poor performers at best of times. To my personal experience the CCMA is slow to react at best of times.

    I feel that the Consumer Council is a public defence mechanism and there protection is invaluable to the public sector. So extra consideration must be made when dealing with new implementations acts and laws in general, otherwise the system will be ineffective and nothing more than a burden to the taxpayer.

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    Site Caretaker Dave A's Avatar
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    I suspect business is going to have to adapt some too. Another reason for the extended timeline.
    The trouble with opportunity is it normally comes dressed up as work.

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    Gold Member garthu's Avatar
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    I don't know about this one. A new act/bill always come with enough loopholes to hang several of innocents in time. Take the rental housing protection - as per usual the devious get away with everything. Every promise to correct it has come up with more challenges.

    I am sure most of us have a few suppliers in mind when it comes to these much needed changes
    Agreed, all of us will see the value in this. One company leapt to mind quickly.

    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.
    This really gives me the shivers. How well is it written? We looking at an "American style" lawsuite system here. Economic loss???? Sell a guy an ink cartridge, it fails at a crucial moment, he sues for loss of a contract lost due to the printer failer. Death injury loss, again, very general... I install an electric fence, the cat gets dead on it (sorry for gruesome) i get sued for family loss etc...

    Consumers may return the goods to the supplier, without penalty and at the supplier’s risk and expense
    Scary

    Consumers are now empowered to cancel contracts if not satisfied with the terms of contract
    Guys, don't know where to even start with this. YES i have had one i would have implemented here BUT we all use contracts. NOT SATISFIED WITH THE TERMS, this could really put every single contract in jeopardy. Electrical, building etc etc. Imagine your 100K pc upgrade contract cancelled halfway through as they decided the payment terms of 30 days is no longer acceptable and want 60 days. This is what it reads like to me. This could be a huge problem easily abused by the corporates (they are also consumers) or I install an electric fence, the guy doesn't like the colour!!

    No doubt consumers need protection, cant deny, but Really all sounds very open ended.... Obviously don't have the detail, but experience tells me the loop holes for both sides will be there to be abused
    Garth

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    Site Caretaker Dave A's Avatar
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    The latest draft I could find on the DTI website is here.

    I don't know if this will be the final form, but reading it my first general concern is the legislation appears to continue the trend towards subjective terms such as "unfair" and "unconscionable."

    Something else that has caught my eye in news releases on the Bill is it is expected to provide the best consumer protection in the world. Now I'd like to point out two undesirable consequences of over-enthusiastic "consumer protection" that I'm aware of from elsewhere that relate to my original speciality, property inspections for the presence of wood-destroying organisms:
    • In the USA, these inspections exclude inspection of the roof void because of the nature and volume of claims experienced.
    • In Australia, no inspection will result in the issuing of a clearance certificate or any other indication that no problems were found. A recommendation to treat any pests that might be able to attack the building will be recommended every time - once again due to the nature and volume of claims experienced.

    I consider such situations to substantially impair the primary objective of the service, but they are the unintended consequences of legal precedent.

    In terms of the draft, the courts are burdened with the responsibility to build a volume of common law. Each precedent case is certainly going to have to be thoroughly explored before judgement is given to avoid such unintended consequences becoming part of the local legal landscape too.
    The trouble with opportunity is it normally comes dressed up as work.

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    I think the passing of the Bill will do a lot to protect consumers but will be quite a burden on businesses.

    I've set up a Compliance Advisory Services firm in the hope that I'll do a lot of Compliance risk management work on the Act.

    The potential market for this is substantial I think because of the wide array of industry sectors affected.

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