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Thread: New Consumer Protection Act

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    Full Member Blesh's Avatar
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    Question New Consumer Protection Act

    Is anyone aware of a checklist that a small manufacturing concern can use to make sure that they comply with this Act.

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    Moderator IanF's Avatar
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    Here is quite a nice summary of the act http://www.dti.gov.za/ccrd/Consumer_protection_bill.pdf
    My next goal is to get to know this act better than the average consumer so the business can be protected. First item will be all deposits are non refundable.
    Only stress when you can change the outcome!

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    KimH (19-Mar-11)

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    • You know the scene: your waiter brings you your meal at a restaurant, but it’s only half the size of the advertised picture.
    • Or your toaster dies an unexpected, flaming death on day 101 of your 100-day-guarantee.
    • Or a telemarketer calls you up halfway through lunch and you find yourself signing up for an insurance policy between mouthfuls.
    Yes, it’s a dangerous world for consumers. But that’s all about to change.

    On March 31, the new Consumer Protection Act (CPA) comes into play.
    RETURNS AND REFUNDS
    • It’s all about you in the new act, especially when it comes to returning goods or asking for refunds.
    • Consumers will now have up to six months to return faulty or unsafe goods.
    • You will have a choice between the supplier repairing or replacing these, or refunding you in full.
    • If the product fails again within the next three months, the supplier is once again obliged to replace it or refund you.
    • But remember, this applies only to the general wear and tear of your appliances, not gross negligence on your part.
    • The supplier may charge you a small amount to repackage the product.

    DELIVERIES
    • Ordering online? Goods will have to be delivered at an agreed date, time and place. If not, you will be free to accept or cancel the agreement – it’s your choice.
    • Companies are also obliged to deliver goods that match the sample or description of the product. You have the right to examine your purchases before accepting them, and reject them if you’re not happy.
    • If you didn’t get a chance to examine the product and are unhappy with it, it can be returned at the supplier’s expense.
    SMS COMPETITIONS
    • As of March 31, companies will not be allowed to charge you an exorbitant R5 or R10 to enter an SMS or MMS competition, but will have to stick to the usual network rates.
    REPAIRS
    • Sending your laptop in for repairs? Getting that leaky roof fixed?
    • As of March 31, companies have to provide you with an estimate for the work – which you must approve – and cannot charge you more than that estimate.
    • If more work is required above and beyond the estimate, they first have to get the go-ahead from you.
    • Companies also can’t charge you for preparing their quote, unless you’ve agreed to that.

    PRIVACY
    • Gone are the dreaded telemarketer calls and junk mail flyers. At least in theory.
    • According to the new act, salespeople cannot bombard you with calls and leaflets at certain times of the day and certain days of the year.
    • You can also put your name on a blocking registry to one-up the telemarketers before they even begin to dial. How exactly this will be enforced, however, is still anybody’s guess.
    COOLING-OFF PERIOD
    • Impulse buyers, this one’s for you.
    • According to this clause, you will have five business days to change your mind about that mid-life-crisis Harley or the seaside cottage you fell in love with.
    • Notify the company in writing, and they’ll have 15 days to pay you back in full. If goods have already been delivered to you, you’ll have to return them before you get your money back.
    • Note that this applies only where you bought in response to direct marketing, which is when things are advertised to you directly, in person, in the mail, or electronically.

    CONTRACTS
    • Ever been billed for that gym or cellphone contract you thought had expired?
    • Thanks to the new act, automatic contract renewals will be no more. Companies will have to contact you – in writing – between 40 and 80 business days before your contract expires. They have to give you the option to continue your contract, change its terms or cancel it.
    • Note that the contract will continue on a month-to-month basis until you make your choice.
    • You will also be able to cancel contracts at any time. No more waiting for the full 24 months to end. If you’re unhappy, give the company 20 days’ notice – in writing – and you’re home free.
    • And while you won’t have to pay the full value of the contract, keep in mind that you still have to pay anything you owe the company up to the date of cancellation.
    • The company might also charge you a cancellation fee, possibly no more than 10 percent of the amounts still owed.

    VOETSTOOTS
    • Voetstoots – especially in the car industry – means buying it as you see it. Don’t go complaining to the seller when your 1962 skedonk no longer gets you from A to B. What you see is what you get. But not anymore.
    • According to Broekmann, “The CPA specifically identifies the consumer’s rights to good-quality products, in good working order, free of any substantial defects, and fit for their purpose.”
    • From March 31, suppliers will have to let you know of all defects – both obvious and hidden – of your purchase, and you have to agree to buying the product in that condition.

    RESERVATIONS
    • This one is still on you. Cancel a booking or reservation, and the supplier is entitled to charge you a “reasonable” cancellation fee. The “reasonableness” depends on how early you cancel and if the supplier can fill your now-empty spot.
    • If, however, the booking is cancelled because of the death or hospitalisation of the person who made the booking, no cancellation fee can be charged.

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    wynn (17-Mar-11)

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    Site Caretaker Dave A's Avatar
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    On the issue of contracts:
    Quote Originally Posted by Andrew_ZA View Post
    The company might also charge you a cancellation fee, possibly no more than 10 percent of the amounts still owed.
    I wouldn't go to bank on the 10% limit speculated here just yet. The Act states that the cancellation fee must be reasonable, and I suggest the definition of "reasonable" might well end up pretty close to what one could expect currently.

    The first precedent setting case is sure going to be interesting on this one.

    I'd also point out that in the absence of a renewal notification, by my understanding the contract automatically becomes a month-to-month arrangement. Timeous notification of end of contract will only become critical if either party is seeking a more extended duration.
    The trouble with opportunity is it normally comes dressed up as work.

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    Email problem KimH's Avatar
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    What impact will the new CPA have on professional service business - accountants, consultants, etc. We don't deal with the consumer directly but offer services to other business entities.
    Other than doing away with unsolicited sales (flyers, email marketing), will it have any impact at all on us ?

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by KimH View Post
    We don't deal with the consumer directly but offer services to other business entities.
    Those businesses are consumers of your services.

    It'll be interesting to hear views on how consultants are going to be affected - particularly those ones that charge a fat bill for telling business owners what they already know about their business.
    The trouble with opportunity is it normally comes dressed up as work.

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    Moderator IanF's Avatar
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    Quote Originally Posted by Dave A View Post
    Those businesses are consumers of your services.

    It'll be interesting to hear views on how consultants are going to be affected - particularly those ones that charge a fat bill for telling business owners what they already know about their business.
    What happens if you want to return the advice given as it had no value to you? The test cases are going to be interesting.
    Only stress when you can change the outcome!

  10. #8
    Email problem KimH's Avatar
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    Ian, thanks for the link.

    I have read through the summary and the message I get from it is that those of us who subscribe to honest and ethical business practices have nothing to be concerned about. This is as it should be.
    Reading Dave's response to my initial post, it is clear that he does not have much regard for certain types of Consultants, can't say I blame him, I have come across way too many of them in the past - however there are those of us
    that have a real desire to help struggling small business owners in the areas where they lack expertise, for instance one of my usp's is that I will charge a fee in relation to what is realistically affordable to my clients. Small business is essential to the growth and economy of SA and should be preserved.

    Slightly off topic - I have resigned and will be putting my full attention to my new business venture as from 1st April - Ian, I will pm you in due course regarding some printing work, providing you courier to Cape Town.

  11. #9
    Moderator IanF's Avatar
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    KimH,
    Good luck with the new business, we do courier to Cape Town. We have also found that registered post works very well. With this new CPA I agree with you most companies with a lot of notable exceptions err on the side of the customer.

    ( I remember watching a very large lady returning a pair of high heel shoes which had split on the heel, the returns lady didn't even blink and gave her credit slip for them. I probably would have made a nasty crack about a large weight on a small heel)

    One thing I have learnt that you must look for good customers, you will get the ones that complain about everything get rid of them. One bit of advice is look for customers who spend other peoples money, and service the hell out of them.
    Only stress when you can change the outcome!

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    Gold Member daveob's Avatar
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    Quote Originally Posted by IanF View Post
    One thing I have learnt that you must look for good customers, you will get the ones that complain about everything get rid of them.
    Those are the 80/20 customers - where 80% of your energy goes into servicing 20% of your customers - they usually aren't worth it unless they generating large profit.
    Watching the ships passing by.

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