What Does It Entail?
The new Consumer Protection Act (due to become law on 1 April 2011) protects South African consumers against a number of unfair and unethical business practices.
The Act reads like a bill of rights for consumers, with a corresponding number of new duties on businesses that sell their wares to consumers. Businesses that don’t comply with these new rules may find themselves dealing with cancelled contracts, compulsory refunds, contractual damages or even criminal penalties.
Who And What Does The CPA Apply To??
Who is a consumer?
A consumer is any individual, small business (with annual turnover below R3 million), club or association to whom goods or services are marketed and sold AND any end users of those goods and services.
What goods and services are covered?
Most goods are included:
1. Consumables (food, clothing etc);
2. Other goods that can’t be consumed but can still be used and enjoyed by a consumer;
3. Content and entertainment products (books, music, movies, games, information products, software) and includes the licenses to use those products;
4. A legal interest in fixed property; and
5. Gas, water and electricity.
Services covered are:
- Building, renovation and/or repair services;
- Education, information, advice or consultative services (doctors, lawyers, training companies, universities etc.)
- Banking and insurance services not regulated under the FAIS Act, Long Term and Short Term Insurance Acts;
- Transportation services (tour buses, taxis, lift clubs);
- Accommodation and hospitality services (hotels, B&B’s, restaurants);
- Entertainment services (cinema’s, theatres, fun parks, casino’s);
- Electronic communication access services (cell phone, internet, email);
- Rental services (suit hire, home rentals, car hire); and
- Franchise services.
The Act covers:
- The promotion of these goods and services.
- Service and sale contracts and other contracts with consumers.
- The delivery and supply of those goods and services.
- The quality and standard of the goods and services themselves.
The Act generally does not apply to agreements, transactions entered into and goods supplied before 1 April 2010. However, a number of provisions of the Act will apply to current fixed term agreements that have 2-3 years left to run on their terms.