It was inevitable, of course, but the lack of knowledge and understanding of the Consumer Protection Act - on the part of both consumers and companies - has been a huge source of disappointment and frustration for me this year.
I’ve focused on many facets of this since the act became effective in April, but written little about the provisions relating to lay-by agreements.
Two emails I received this week - one from a national, Joburg jewellery store, and another from a Pretoria consumer - highlight the continuing ignorance of what the law says on the issue.
First of all, what is a “lay-by”?
The system allows a consumer to choose an item - usually clothing, furniture or a piece of jewellery - and pay it off every month, with no interest added.
The key element is that the goods remain the property of the store until the client pays in full.
Previously, the law allowed the consumer to cancel the agreement at any time, and the store had to repay all monies paid, minus 10 percent as a cancellation penalty. But in practice, many smaller independent stores refused to refund customers at all.
Since April 1, the CPA makes lay-bys an even more attractive proposition for consumers, but less so for the stores, who may now retain only 1 percent of the purchase price of the goods if the consumer cancels the agreement.
So, say a customer sets aside a R600 jacket and pays R100 a month for four months, and then cancels. The store must refund R394, keeping just R6 as a cancellation penalty.
So on Monday, more than eight months since the act came into effect, I received an email from a woman who handles the refunds for that major jewellery store.
“I am in desperate need of concrete information that the legal amount that is allowed to be deducted when a lay-by is cancelled is only 1 percent.
“There is still great confusion regarding the percentage… your assistance will be greatly appreciated,” she wrote.
Well, I do have some sympathy, given that the National Consumer Commission’s website does not yet feature the detail of the regulations. (www.nccsa.org.za)
So I was happy to put her right. And then I asked her if the company would continue to offer lay-bys to its customers.
“For now, I suppose yes, as the full effect of the CPA has not yet been felt,” she said.
“But retailers will probably eventually shy away from lay-bys, and I suspect we will follow suit.”
What I suspect she meant by the full effect of the act not being felt yet, is that consumers have been ignorant of their new rights.
Yesterday Lindiwe Sibeko e-mailed me to complain about SA Image, a clothing store at the Sancardia Centre in Arcadia, Tshwane.
She’d put down a lay-by deposit of R100 on a R180 dress on November 21, and then when she’d wanted to cancel the deal and buy something else in the store last week, she was told “no refunds”.
Her printed “agreement” also states “no refunds”, and the period the agreement covers is not specified.
In fact, Sibeko is entitled to a refund of R98.20.
I contacted the store about this, but had difficulty communicating with the apparently Chinese woman who undertook to deal with my call.
She said Sibeko should visit the store and speak to the boss about the issue, which I have advised her to do.
Bottom line - the CPA makes us among the most protected consumers in the world, but that’s worth nothing if we don’t empower ourselves by getting clued up on the act, and then only do business with companies which have chosen to comply with it.
There is an enforcement mechanism, starting with the National Consumer Commission, but lack of capacity means justice is slow in coming. - The Star