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Dummies’ guide to the consumer act

With the Consumer Protection Act, companies can no longer charge you exhorbitant rates to enter SMS competitions.

With the Consumer Protection Act, companies can no longer charge you exhorbitant rates to enter SMS competitions.

Published Apr 1, 2011

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RYAN CRESSWELL

Business Editor

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It’s official, the ordinary consumer now has so much clout that business, possibly the heavyweight champion of South Africa, has to box clever in future.

The Department of Trade and Industry’s long-awaited Consumer Protection Act, passed by then- president Kgalema Motlanthe in 2009, was intended to become effective last October but this was deferred until midnight last night because neither the department nor businesses were ready.

This follows months of hype by government and consumer bodies, and warnings of trouble ahead by some business sectors and analysts.

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The Consumer Protection Forum, an umbrella body for consumer organisations which has participated in the drafting of the act, has said its implementation will be “instrumental” in achieving higher levels of consumer protection.

Western Cape MEC for Economic Development and Tourism Alan Winde said last week consumers now had statutory recognition of their right to confidentiality, access to information, disclosure, fairness, transparency, safety and redress.

Ashley Searle, the director of the Western Cape Office of the Consumer Protector, said the act went as far as to state that a supplier may not enter into an agreement with a consumer that is patently one-sided, unreasonable or unfair.

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However, Dawie Roodt, chief economist for the Efficient Group, has warned that the act allows consumers to cancel deals for the slightest fault and this could eventually cause businesses to close and “millions” of jobs to be lost. Some law experts also argue that the act could lead to complex court battles.

There are further complaints because some of the regulations pertaining to certain sectors have been made public too late for companies to get ready by today.

But, punch for punch, what does the act really mean for the new contender, you, the consumer? The Cape Argus and our sister newspaper The Star have sourced and simplified the following new rules for you.

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Direct marketing:

l Consumers can now cancel any direct marketing agreement within five business days, allowing you to change your mind about a purchase.

l You can also now make use of an “exclusion register” whereby you can register a pre-emptive block against receiving any electronic communication.

l The act now outlines the times and days during which you may be contacted for direct marketing.

l From now on a salesperson visiting a consumer must wear an identification device such as a badge.

Deliveries

l 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.

l 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.

l 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.

Returns and refunds

l Consumers have six months to return faulty or unsafe goods.

l You will have a choice between the supplier repairing or replacing these, or refunding you in full.

l If the product fails again within three months, the supplier must replace it or refund you, barring gross negligence on your part.

Liability

l A producer, distributor, importer or retailer can now – in certain instances – be held strictly liable for any harm or damages suffered by a consumer using a product, irrespective of whether negligence can be attributed to them.

l You will need to approach the courts to institute any claim for damages based on “strict liability”.

Repairs

l Companies have to provide you with an estimate for the work – which you must approve – and cannot charge you more than that estimate.

l If more work is required above and beyond the estimate, they first have to get the go-ahead from you.

l Companies also can’t charge you for preparing their quote, unless you agree to this.

SMS competitions

l Companies can no longer charge you an exorbitant R5 or R10 to enter an SMS or MMS competition, but will have to stick to the usual network rates.

Contracts

l 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.

l Note that the contract will continue on a month-to-month basis until you make your choice.

l You will also be able to cancel contracts at any time. If you’re unhappy, give the company 20 days’ notice and you’re home free.

l You still have to pay anything you owe the company up to the date of cancellation, and you might also be charged a cancellation fee.

l Suppliers have to use understandable language in contracts.

Warranties

l You will be able to return and claim refunds for poor-quality goods because there is now an implied warrantee of six months for any goods purchased – irrespective of other warranties.

l However, you can’t insist on a refund because it is cheaper at another store or the design no longer fits in with your décor. Also, if you have tampered with the goods in any way, then a demand for a refund or replacement can be denied.

Voetstoots

l No longer is it a case of what you see, or don’t see because it is hidden, you get. The act identifies the consumer’s rights to good-quality products in good working order and fit for their purpose.

l Suppliers must let you know of all defects.

Reservations

l If you cancel a booking or reservation, the supplier is entitled to charge you a reasonable cancellation fee.

l If the booking is cancelled because of the death or hospitalisation of the person who made the booking, no cancellation fee can be charged.

The odds have been evened, and one thing is for sure, it is about to get very interesting in the financial ring.

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