consumer protection act socap presentation a business perspective janusz f luterek, pr.eng attorney...
TRANSCRIPT
Consumer Protection Act
SOCAP PresentationA Business Perspective
Janusz F Luterek, Pr.Eng
Attorney and Patent Attorney
Partner at Hahn & Hahn Attorneys
www.hahnlaw.co.za
This presentation is prepared and presented by J F Luterek in whom all copyright therein vests. No part of this presentation may be reproduced or used for any purpose whatsoever without the express written permission of J F Luterek – © November 2010
Consumer Protection Act
The purpose of this Act is to promote and advance the social and economic welfare of consumers in South Africa by establishing a legal framework for the achievement and maintenance of a consumer market that is fair, accessible, efficient, sustainable and responsible for the benefit of consumers generally, and in particular the previously disadvantaged.
The Act grants consumers a number of rights and sets a number of obligations on the supplier.
Consumer Education
Consumer Protection ActApplies to
All transactions exceptState is consumer - but where state then supplies the
public it is includedConsumer has turnover or net asset value above a
threshold (to be determined)Exempted class of transactions at discretion of
Minister
Identifying Applicable TransactionsPrivate individualSmall business such as hairdresser or pharmacyOther Business to Business transactions excluded
but Strict Liability (S61) still applies
I KNOW MY RIGHTS.
DO YOU KNOW YOURS?
You have rights as a consumer.
Understand them.
Enforce them.
Consumer Protection Act
1. Right to equality in the consumer market and protection against discriminatory marketing practices
Free and unlimited access to goods and services
Right to high quality goods and services
Right to fair pricing of goods and services
Right to lodge complaints.
Consumer Rights
2. Right to privacy *
Right to restrict unwanted direct marketing
Right to discontinue receipt of direct marketing at any time
* New Protection of Personal Information Act due shortly!
Consumer Rights
3. Right to choose
Right to select the supplier of your choice
Right to cancel or renew a fixed-term agreement
Right to request pre-authorisation for repairs or maintenance services
Right to cancel direct marketing contracts within the cooling-off period
Right to cancel advance reservations, bookings or orders
Consumer Rights
3. Right to choose cont.
Choose or examine goods, even after purchase and delivery *
Right to return goods and seek redress for unsatisfactory services**
Right to retain and not pay for unsolicited goods or services
FYI: a consumer has right to return goods for full refund within 10 days if they are unsuitable
Consumer Rights
4. Right to disclosure of information
Right to information in plain and understandable language*
Right to disclosure of prices of goods and services
Right to product labelling and trade description
Right to clear disclosure of reconditioned or grey market goods
Right to sales records
Right to disclosure of intermediaries
Right to identification of deliverers, installers and others
Consumer Rights
Consumer Rights Information in Plain and Understandable Language
Plain language is required on packaging and insertsOrdinary person of the class of intended consumer with
average literacy skills, but no special skills as a consumer, must understand its significance and importance
Layout, use of vocabulary, use of images, etc all considered
Guidelines will be published for determining the aboveEspecially important for manuals, warnings on boxes, etc
5. Right to fair and responsible marketing
Right to protection against bait marketing
Right to protection against negative option marketing
Right to protection against direct marketing
Right to protection in catalogue marketing
Right to protection in terms of trade coupons and similar promotions
Right to protection in customer loyalty programmes
Consumer Rights
6. Right to fair and honest dealing
Right to protection against unconscionable conduct
Right to protection against false, misleading or deceptive representations
Right to protection against fraudulent schemes and offers
Right to protection against pyramid and related schemes
Right to assume that suppliers are entitled to sell goods
Procedure for sales by auction
Right to changes, deferrals and waivers, and substitution of goods
Right to protection against over-selling and over-booking
Consumer Rights
7. Right to fair, just and reasonable terms and conditions
Right to protection against unfair, unreasonable or unjust contract terms
Right to obtain notice for certain terms and conditions
Right to obtain free copies of agreements/contracts
Right to refuse prohibited transactions, agreements and terms or conditions
Right to approach the Court to ensure fair and just conduct, terms and conditions.
Consumer Rights
8. Right to fair value, good quality and safety **
Right to demand quality service
Right to safe, good quality goods
Right to implied warranty of quality
Right to a warranty on repaired goods
Right to receive warnings on the fact and nature of risks
Right to recovery and safe disposal of designated products or components
Right to have products monitored for safety and/or recalled
Right to claim damages for injuries caused by unsafe/defective goods
Consumer Rights
Consumer RightsConsumer’s rights to demand quality service
timely performance of services, and timely notice of any unavoidable delay in the performance of the services
the performance of the services in a manner and quality that persons are generally entitled to expect
Consumer may require the supplier to either remedy any defect in the quality or refund to the consumer a reasonable portion of the price paid
Return calls when promised
Consumer’s rights to safe, good quality goodsevery consumer has aright to receive goods that are fit
for purpose, good quality, in good working order and free of any defects,know packaging, know safety warnings, know company standards.
Consumer RightsFit for Purpose
The packaging and circumstances surrounding the marketing of a product are used to interpret what the intended purpose isEg product sold to hairdressers, marked
“professional use only”Fitness equipment advertised as gym quality or
for professional athletesPower tools sold as “heavy duty” – picture on box,
text… If goods not fit for purpose then can be returned for
a refund within 6 months of sale – at sellers risk!Regardless, a consumer has right to return goods for
full refund within 10 days if they are unsuitable
Consumer Rights Warning concerning fact and nature of risks
Notice that meets the plain language requirements of this Act or any other applicable standards, providing the consumer with adequate instructions for the safe handling and use of those goods
Use of hair relaxers, hair colours, and the like where if used incorrectly there is a risk of chemical interaction or allergic reaction etc
Allergens in foodstuffs and beverages
Consumer Rights
Misrepresentations by call centrePay careful attention not to misrepresent facts to
consumer by labeling or marketing or on the phoneDo not tell a consumer you are at the offices of a
company when you are not – if asked a direct questionBe clear that you are not investigator or technical
person and merely note the complaint and route it to relevant person whoch will then resolve it as they see fit
Correct any misconception by the consumer of which you are awareQuality of productUse of productONLY IF YOU KNOW!
9. Right to accountability from suppliers
Right to protection in lay-bye agreements
Right to protection with regard to prepaid certificates, credits and vouchers, and access to prepaid services and service facilities
Consumer Rights
Consumer Protection Act Strict Liability S 61
Producer, importer, distributor, or retailer liable for any harm caused wholly or partly -supplying any unsafe goods;a product failure, defect or hazard in any goods; or inadequate instructions or warnings provided to the
consumer irrespective whether the harm resulted from any
negligence on the part of the producer, importer, distributor or retailer, as the case may be.
Supplier of services using goods, such as electrician or caterer, is also liable as if they had supplied the goods/service
CPA - Defences to Liability
unsafe product characteristic, failure, defect or hazard wholly attributable to compliance with any public
regulation; did not exist in the goods at the time it was
supplied by that person to another person alleged to be liable
wholly attributable to compliance by that person with instructions provided by the person who supplied the goods to that person
unreasonable to expect the distributor or retailer to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person’s role in marketing the goods to consumers; or
the claim for damages has prescribed (expired) (3 years from date when damage discovered.)
CPA – Strict LiabilityLiability for Economic Loss
Indeterminable riskConsequential losses, even those very remote and
unforseable e.g. computer crash loss of data
Call centres and returns counters – DO NOT MAKE ADMISSIONS OF LIABILITY as these will bind the company and be very difficult to argue against later leading to claims against company being successful, damages being paid and potentially fines being imposed.
CPA – Penalties and Administrative fines
Consumer Commission may issue “compliance notice” and set deadline for compliance
Non-compliance can be referred to Tribunal
Fine greater of R 1,000,000 or 10% of turnover
Offences in terms of the Act Disclosure of confidential information by inspector,
complainant, or any party to proceedings can lead to a 10 year prison sentence
Any other offence can lead to a 12 month prison sentence e.g. ignore compliance notice
COMPLAINT OPTIONS
Where can the consumer complain?
Supplier
Manufacturer
Accredited ADR
Industry Ombud
Consumer Tribunal
INDUSTRY CODES Industry associations such as CGCSA will have codes
which are accredited by the Minister and creates an Industry Ombud
Industry ombudsman will have the power to resolve customer complaints in terms of the Act and to avoid more complicated measures
Investigative powers
Consumer can choose not to accept the outcome but then would need to convince the Commission to take on the matter despite ombudsman ruling
CALL CENTRE INFO, DO’S, DON’TS Consumer recommended to first take up complaint with the
retailer where product purchased
Call centre number - consumer does not have to call the number
Consumer can choose to go to industry ombud if retailer does not resolve complaint
Admissions of liability by Call Centre when fielding calls will cause liability for Company
Rapid complaint handling to prevent escalation of complaints through system is essential
Training in both procedures and technical matters required for Call Centre Consultant s – understand top line aspects of Act, understand procedure for handling complaints under CPA, and with Liability
DO’S AND DON’TS Let consumer explain story in full in own words – note
information
Delays on product testing, careful on delays
Irrelevant empathy statements. Careful on apologies
Importance of getting product back, establish if consumer has product and how it is being stored etc BUT do not advise how it should be done
Going to someone else? Ask if they are complaining elsewhere as well, for example, the retailer
Ensure consumer happy with outcome BUT do not concede liability
Handling on behalf of retailer - have you had other similar complaints – can’t disclose, not aware, not permitted to discuss other complaints -
Conclusion Awareness of Act is important
Don’t panic. Handle cases as normal
Stick to script!!
Follow up as promised vital
Procedures more critical – important to know these and to follow them
Note information in consumer’s own words
Escalation is important
Cases handled well by the Call Centre less likely to escalate to demands for liability payouts
This presentation is prepared and presented by J F Luterek in whom all copyright therein vests. No part of this presentation may be reproduced or used for any purpose whatsoever without the express written permission of J F Luterek – © November 2010