Page 2 of 2 FirstFirst 12
Results 11 to 15 of 15

Thread: The Consumer Protection Act in regards to deposits for services rendered .

  1. #11
    Suspended
    Join Date
    Mar 2013
    Location
    Had enough
    Posts
    3,358
    Thanks
    114
    Thanked 213 Times in 201 Posts
    I am not sure how recruitment works, but how do you handle a new client who decides to no longer employ a successful candidate after you have spent hours, perhaps weeks meeting possible candidates and researching their backgrounds? Its a very specialised job so you could not pull the info off your existing database.
    Yes deposits is a negotiated entity. In recruitment there is no deposit. It is not done in our industry. We have to vet the client and make the call whether they are "good clients" . We work on a 3 out of 4 rule i.e. if T&C's are signed and a number of other criteria are met we then do the work, which might take up to two weeks. Yes we stand the risk of a client not paying for a candidate once sourced - we have to deal with that when it happens - we have had that happen only twice in 13 years.

    In the past companies used to ask for deposits when they have to lay out their own capital to either buy the product and / or manufacture the product, which is totally understandable , but unfortunately a lot of people will not give a deposit if there is no manufacturing to be done i.e. in this case it is only time. It is a difficult thing because deposits are also a signal of a new company starting out who does not have the cash flow to operate and then operates on clients deposits to do the work.

  2. #12
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    3,480
    Thanks
    134
    Thanked 695 Times in 593 Posts
    Blog Entries
    1
    Quote Originally Posted by HR Solutions View Post
    It is a difficult thing because deposits are also a signal of a new company starting out who does not have the cash flow to operate and then operates on clients deposits to do the work.
    Not necessarily.
    Many a client in the past sent an order, and then ducked and dived when it was complete. It could not be sold to anyone else, as it was tailor made, or had the customer's branding.

    Now a days I do not really care who the client is, I want a deposit to show commitment. on rare occasions I may not request a deposit, if the order is small, and the organization who has placed their order, has a order placing process, in which a number of departments must authorise the order. Even so, if the risk is high and the goods manufactured are branded, then I will insist on the deposit.

    After all an order is a piece of paper, and yes it is a legal document, but at what cost to litigate?
    It is cheaper to prevent the problem, than trying to cure it
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  3. #13
    Silver Member Greig Whitton's Avatar
    Join Date
    Mar 2014
    Location
    Cape Town
    Posts
    338
    Thanks
    33
    Thanked 105 Times in 86 Posts
    Quote Originally Posted by KevinW View Post
    I am always worried that once I have completed the site or get halfway they turn around and say they dont want to use me anymore for whatever reason ( even after having been in agreement with the work up to that point ) and then demand the deposit back . Can they do that , If I have put so many hours into developing the website to that point , Do i then just have to hand over the deposit and lose the time I have put in . What does the consumer protection act have to say about this sort of situation ?
    There's some good (and not so good) advice in this thread, but here is the answer to OP's primary question:

    Section 5(2)(b) of the CPA clearly states that the Act does not apply to transactions "in terms of which the consumer is a juristic person whose asset value or annual turnover, at the time of the transaction, equals or exceeds the threshold value determined by the Minister in terms of Section 6". The threshold value referred to here is R2 million (as published by the Department of Trade and Industry via Government Gazette No 34181).

    So if your clients are juristic persons (e.g. companies, close corporations) with an annual turnover (or asset value) exceeding R2 million, then they can't use the CPA to insist on a refund (which is not to say that they can't still demand a refund or even take legal action to secure one, just that they can't use the CPA to do so).

    If your clients aren't juristic persons (e.g. if you service the general public), or if they are but they fall below the threshold, then they can use the CPA to insist on a refund. This would fall under Section 54 (a consumer's right to quality service). In terms of this section, consumers may demand a refund if they believe that their supplier has failed to meet quality standards. However:

    (1) If you and your clients can't agree on whether your service is to standard or not, then it is up to them to approach the National Consumer Commission (or other relevant juristic entity). In other words, just because they claim poor service and demand a refund doesn't mean that you are legally obliged to give it to them. Of course, you would have to weigh up the potential non-legal implications (e.g. an irate customer badmouthing you on social media). But from a strictly legal perspective, you're within your rights to refuse a refund. That said, the onus will be on you to prove that your service was of sufficient quality if your customer actually does pursue legal action.

    (2) Even if you do agree to a refund, Section 54(2)(b) clearly states that it must be "a reasonable portion of the price paid for the services performed and goods supplied, having regard to the extent of the failure." So you're not obligated to refund in full. Again, your customer might insist on a full refund, but you're not legally obliged to give it (although, again, the onus will be on you to prove that a partial refund was reasonable if it comes down to that).

    Founder of Growth Surge - Helping entrepreneurs create more wealth and enjoy more freedom.

  4. Thanks given for this post:

    BusFact (22-Mar-16)

  5. #14
    Suspended
    Join Date
    Mar 2013
    Location
    Had enough
    Posts
    3,358
    Thanks
    114
    Thanked 213 Times in 201 Posts
    Mmmm that's all very well if the system worked and didn't take so long ! At the end of the day it's going to be you and the customer to decide if you are going to take a deposit or not and for what it will be for.


    To run a business in this country at the moment with all the legislation and red tape and procedures is a nightmare.

  6. #15
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    843
    Thanks
    181
    Thanked 177 Times in 146 Posts
    I have to agree with you in that regard HR. Not so much on the CPA which I think has its merits, but bureaucracy in general is a pet dislike of mine. Running a business should me more about making a good product or service, and not so much about being a parent to employees, deciphering legislation requirements and dealing with bureaucratic inefficiency.

Page 2 of 2 FirstFirst 12

Similar Threads

  1. The Consumer Protection Act - What You Need to Know
    By Eric76 in forum Consumer Protection Act Forum
    Replies: 1
    Last Post: 27-Sep-14, 12:14 PM
  2. Consumer Protection
    By MadJan in forum Consumer Protection Act Forum
    Replies: 4
    Last Post: 30-Oct-11, 08:05 AM
  3. [Question] New Consumer Protection Act
    By Blesh in forum National Credit Act Forum
    Replies: 11
    Last Post: 21-Mar-11, 07:51 AM
  4. M Ntuli on Consumer Protection Act
    By I Robot in forum Consumer Protection Act Forum
    Replies: 11
    Last Post: 09-Mar-10, 01:22 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •