I’m sorry to have to tell you, dear readers, that the bit of the Act which has been much looked forward by consumers - an end to lock-in contracts - has been watered down to the point that it’s no big boon anymore.
Forget being able to cancel a fixed term contract - such as cellphone or gym - early and pay just 10% of the remaining subscription - that’s no longer a consumer right in terms of the Act.
The final regulations pertaining to the Act, which were made public only on Friday afternoon, make no mention of that 10% provision, which was in the initial version of the Act, released by Trade and Industry Minister Rob Davies four months ago.
Remember, the CPA does not apply to fixed term contracts entered into before April 1, 2011.
The cellphone industry were said to be lobbying to be able to ‘ringfence’ payment of the handsets which are given to consumers as part of post-paid cellphone contracts, to avoid subscribers canceling early, paying just 10% of their remaining subs and keeping their phones.
But the final regulation on early cancellation of fixed term contracts has been watered down dramatically.
It states that if a consumer cancels a fixed term contract early, the supplier can demand ‘the value of goods which will remain in the consumer’s possession” - that would be a cellphone.
It also says the supplier can demand a “reasonable” amount as a cancellation penalty taking into account a whole lot of things, such as the duration of the contract; “losses suffered or benefits gained by the consumer as a result of entering into the agreement” and “the reasonable potential for the service provider, acting diligently, to find an alternative consumer”. Huh?
It does say that the cancellation fee may not have the effect of negating the consumer’s right to cancel a fixed term agreement, but clearly consumers are going to have a very different idea of what is reasonable, from that of the service provider.
Very disappointing.
Here’s a quick look at the other final regulations:
- Stopping Spam
You can now put a sign on your postbox stating “NO ADVERTS” which will make it an offence for any direct marketer to put ads in, on, or around the postbox or anywhere on your property.
You can register all your details with a national “registry”, which will block all direct marketers in the country from sending you mail, SMSs or phoning you with offers, from 30 days after your registration.
The administrator will have to ensure that this information is secure, and screen any direct marketer seeking access to it.
The National Consumer Commission will be the custodian of this information.
Oh, and you can’t register yet, as an “administrator” of this new national registry has not yet been appointed. The Dti has put out a tender for this function.
- Those after hours telesales calls
Again, the final regulation has been slightly diluted from that published in November – to the consumer’s detriment.
No direct marketer may direct communication (via any means) to a consumer at home at the following times:
Sundays and public holidays
Before 9am and after 1pm on Saturdays (originally after noon)
After 8pm and before 8am on weekdays (originally not after 7pm)
-Entering competitions by SMS
The total cost of entering a competition via SMS is capped at R1,50. Entrants can’t be forced to have their photos taken for publicity or marketing purposes, and any prize with a value of more than R1 will make the undertaking a promotional competition.
- Protecting the vulnerable
Any advert for an “alternative work scheme” will have to declare – in the same size font as the rest of the advert - that any examples, results or testimonials (about how much money someone has made) is no guarantee that anyone will achieve the results promised or implied.
- Labelling genetically modified foods
All foods which have more than 5% genetically modified organisms must carry the following words prominently on the label: “Contains genetically modified organisms”.
If GMO content is less than 1% the label may state: “Does not contain genetically modified organisms”.
If goods are produced using a genetic modification process, this must be declared on the label.
- Grey goods
Such goods, including cellphones and other electronic goods, must declare in all marketing and promotional material the fact that the goods have not been imported with the approval or licence of the authorised, registered agents and does not carry the manufacturer’s warranty in this country.
- Cars on auction
This is significant as many people have bought cars on auction based on sight only, and when they have broken down soon afterwards, they discover there are no comebacks.
The regulation states that all vehicles placed on auction must carry a notice giving heaps of information, including:
Details of the auctioneer or auction house and whether or not they are “liable to discharge a duty of repair or not”;
Whether the auction is being conducted on behalf of a motor dealer or bank and whether they are liable to discharge a duty of repair or not;
Name and address of the last owner or a statement that these details are available on request;
Whether or not the odometer (mileage reading) is guaranteed or not; and
Full details of the car, including serial numbers.