New Consumer Protection Act, SA Consumers Enjoy First Class Protection

The Consumer Protection Act provides significant protection for South African consumers and will have a wide impact on the way in which business is conducted in the future.

The purpose of the Act is to prevent exploitation or harm to consumers and to enable consumers to make sound decisions.  The aim is to create a strong culture of consumer rights and promote a fair efficient and transparent marketplace for both consumers and businesses.

The Act consolidates the law relating to consumer protection which was previously regulated by a number of Acts including the Trade Practices Act, the Unfair Business Practices Act, the Sales and Service Matters Act and the Price Control Act.

The Act applies not only to the supply of goods but also services.  Franchises are included as consumers and are entitled to the same rights as ordinary consumers.

To achieve its purpose the Act introduces a system of strict product liability and improved redress against producers, distributors and suppliers for damages resulting from injury, death or loss.  The Act also enables consumers to demand refunds for goods of inferior quality.

Consumers are also protected from unscrupulous businesses that attempt to induce them to waive their rights.  The Act grants consumers significant powers to cancel contracts within “cooling off” periods or contracts for a fixed duration where the consumer is not satisfied with the contract’s terms.  Consumers may also refuse to purchase “bundled” products and contracts must be clear and easy to understand to prevent consumers being misled by suppliers.

Consumer activism is also promoted by providing for accreditation of consumer group with whom consumers may lodge complaints.

The Act creates a new body called the National Consumer Commission whose purpose is both to investigate irregularities and enforce the provisions of the Act.  Businesses have been given time to get their affairs in order to comply with the Act and the Commission will only commence its operations in April 2010 and actual implementation of the Act later during October 2010.

Suppliers of goods and/or services should ensure that their contracts and trade practises comply with the provisions of the Act as they may find themselves facing stiff penalties for contravening of the provisions of the Act.

Bruce Lyle | Membership Services Manager