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CONSUMER PROTECTION ACT 68/2008

DATE : 20 November 2009

VENUE : Midrand, Gauteng

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Presenter

• Presentation by Aubrey Mathope

Deputy Director: Education and Compliance

Office Consumer Protection,

Consumer and Corporate Regulation Division

Department of Trade and Industry

Contacts :

Tel 012 394 1553

Fax 012 394 2553

Email aubreyma@thedti.gov.za

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objective:

To provide a broad overview of the Consumer Protection Act and its impact on businesses and industry.

Role of Compliance:

•To encourage, facilitate and monitor voluntary compliance•To minimize financial and legal risk to business and consumers• to assist all stakeholders with compliance

Tools/ processes used to achieve the above:

Presentations/ WorkshopsAdvisory opinions/ ClarificationsInformation/ business contacts and meetingsNational Education Campaigns

Introduction

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The Consumer Protection Act 68 of 2008 was signed by the President on 29 April 2008.

Purpose:

The purpose of the Act is to:

• legal framework

• promote fair business

•Protection of consumers

• awareness

•Education

• efficient system of redress

The Act

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Consumer rights

Consumer rights i.t.o the Act:• Right to equality

•Right to privacy

•Right to choose

•Right to disclosure and information

•Right to fair and responsible marketing

•Right to fair and honest dealing

•Right to fair, just and reasonable terms and conditions

•Right to fair value, good quality and safety

• suppliers accountability to consumers

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Realisation of rights

Any of the following persons may ensure that the rights of consumer are realised and protected:

• an individual

•An authorised person acting on behalf of another

•Person acting as a member or in the interest of affected group or class

•Person acting in the public interest (amicus curiae/leave of tribunal or court

• association acting on the interests of its members

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Application of the act

The CPA applies to the following:

•Every transaction occurring within the Republic

• promotion or supply of any goods and services occurring within the republic

• goods or services that are supplied or performed i.t.o. transaction to which this act applies;

• exempted goods, but section 60 and 61 applicable

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Application cont.

Act not applicable when:

• goods/services promoted or supplied to the state

•Consumer is a juristic person (threshold)

• industry-wide exemption granted to regulatory authority

•Credit agreements i.t.o. NCA but not to the goods or services

•Services under employment contract

• agreements giving effect to collective bargaining agreement

•Agreements giving effect to bargaining agreement i.t.o. sec 213 of LRA

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Definitions

The act provides for numerous definitions. The critical definitions:

• consumer

•Supply chain

•Transaction

•Producer

• Distributor

• Goods

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interpretation

The basic rule is that this act must be interpreted to give effect to the purpose and spirit as set out in the Act.

When interpreting the Act, a person, court, tribunal may consider:

• foreign and international law

•International conventions, declarations or protocol

• any decision of courts provided such decision is not overturned

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Interpretation cont

Calculation of business days:

• First day out and last day included, excluding public holidays, Saturdays and Sundays

If inconsistency between CPA and any legislation:

• reconcile if possible or

• apply the provision that extends greater protection to the consumer

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The Act

• promulgated on 29 April 2009• Known as Consumer Protection Act 68 of 2008

The act has two implementation dates:

1. Early effective date: 12 months after signature (April 2010)

• chapter 1 and 5, section 120(regulations) will be operational

2. General effective date: 18 months after signature. October 2010

• date when all provisions of the act will be applicable.

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DisclosurePLAIN AND UNDERSTANDABLE LANGUAGE

Producer of notice/document/presentation that is required in terms of the CPA or any other law (pharmacy act/mrsAct)

• must be in the form prescribed by the CPA or any other law

• If no form prescribed, it must be in plain language What is plain language?•Ordinary consumer•Average literacy skills•Minimal experienceHow to determine?•Context, comprehensiveness•Organization , form and style•Vocabulary, usage and sentence structure•Use of aids, illustrations/ examples

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Disclosure con’t

PRICE• a retailer is obliged to adequately display price of goods for sale to consumers.

What is adequately displayed?

•Expressed in Rands

•Annexed/written/printed/stamped.

What is prohibited?

•Charging a consumer a price higher than displayed price

•If two prices are displayed, charge the higher price

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Trade Description

PRODUCT LABELLING AND TRADE DESCRIPTION

What is Trade Description?

any description/statement/indication relating to:

•The number, quantity, measure, weight

•Name of the producer

•Ingredients

•Country of origin

•Mode of manufacturing/producing

•Patent, privilege/copyright

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Trade DescriptionHow to apply trade description?

•Must be applied to goods/any covering or label

•Displayed together with goods

•Contained in advertisement ,catalogue, brochure, circular

What is prohibited?

•Misleading trade description

•Altered trade description

NB: a retailer must take reasonable steps to prevent anyone doing the above (staff)

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GMO’s/ parallel goods

GMOAny person who produces/supplies/imports/packages any goods with GMO ingredients must:

•Display on notice•In accordance with applicable regulations

GMO Act, 1997Section 20(regulations)Section 20 (1) (k)PARALLEL GOODSAny person who market goods:•That bear trade mark•Imported without approval/licence must apply a clear notice in the prescribed manner and form

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Fair marketing

No marketing in a manner that is false or misleading.

Marketing that is misleading/fraudulent/deceptive in respect of :

•Nature/properties/advantages/uses

•Manner/conditions on which those goods may be supplied

•The price at which they are supplied

•Sponsoring of any event

•Any other material aspect

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false representation

It is a false/misleading/deceptive representation to false state/imply:

• Supplier has particular status or affiliation

• Use exaggeration/innuendo

• Have ingredients/characteristics/uses/benefits/sponsorship

• Are of particular standard, quality, grade

• Consumer will derive a particular benefit if they assist the supplier in obtaining a new or potential customer.

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Quality service

The legal obligation of quality service require the following:

• Timely performance

• Completion of service

• goods that are free of defects/hazards

• provision of quality goods

• Goods that comply with standards i.t.o. standards act.

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Should the goods not comply with the quality of service mentioned in the above slide:

Within 6 months, consumer may return goods:

• Without penalty

• At the expense and risk of the suppliers;

• At the direction of the consumer, either:

• Repair or replace; or

•Refund the price paid for the goods

If the goods were repaired or replaced and the defect continues within 3 months the supplier must:• Replace the goods; or

• Refund the consumer

Warranty of quality

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The commission must promote the development, adoption and application of industry wide codes of practice proving effective systems to:

a) Receive notice of:

• Consumer complaints

• Return of goods because failure/defect/hazard

• Personal injury/illness/damage

• Other indication of failure/hazard/defect

b) Monitor sources of informationc) Conduct investigationsd) Notify consumer of the riskse) If the goods are unsafe, recall those goods

Safety monitoring/recall

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The supplier is liable for any damage caused as a result of:

Supply of unsafe goods;

Product failure, defect or hazards in goods provided;

Inadequate instructions or warnings.

Liability

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What is industry code?

• refers to a code regulating interaction among persons conducting business within industry or

• a code providing for dispute resolution among industry stakeholders.

The minister may prescribe or withdraw codes.

How? By regulation. Consultation, comments and final approval.

The commission on its own or from proposal from the industry can recommend the code to the Minister.

M &E of the codes is the responsibility of the commission

Industry codes

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Services offered by OCP

The Education and Compliance directorate is mandated to assist consumers and business with education and compliance with legislation and notices administered by the division through offering the following:

• Clarifications & Advisory opinions

• Presentations & workshops

• Self help advice and assistance

•Escalation of consumer complaints to the office.

To request Compliance related services:

•Contact Mr Aubrey Mathope at 012 3941553 or amathope@thedti.gov.za or Ms Bulelwa Hewu at 012 394 3873 or bhewu@thedti.gov.za

•Write to: The Chief Director, Office of Consumer Protection, Consumer and Corporate Regulation Division, Private Bax X84, Pretoria, 0001.

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THANK YOU

QUESTIONS?