Know your rights under the CPA

By Staff Writer

The Consumer Protection Act has been in force since 1 April 2011 but much confusion still reigns as to what exactly it entails and what the rights of consumers are in terms of cancellations and refunds. Justmoney interviews Rosalind Lake, head of the consumer protection practice at international law firm, Norton Rose.

Lake is also co-author of ‘Understanding the Consumer Protection Act’ hand book of which Justmoney has three copies (pictured) to give away to three lucky Justmoney newsletter subscribers. For terms and conditions of our competition, scroll down to the bottom of the article.

How well has the CPA served people since it was enforced?
The enforcement has not been adequate. It takes a very long time to get complaints resolved and the consumer commission has gone through some serious teething problems in the first 18 months. What I must say, however, is that companies are changing their behaviour. It’s always the responsible companies that comply first.

What are companies still getting wrong?
The problem, particularly from a retail perspective, is pricing. I know from being a consumer and looking around I see that hasn’t always been complied with. People need to know what they are going to pay before they enter into the transaction and this is not always enforced.

The biggest issues are around warranty of quality. It’s a massive shift and obligation for retailers. They have to refund someone if after six months after they have purchased something if there is something wrong with the product. There have been a lot of attempts to make this work but some companies don’t have the cash flow to deal with that. That is an area where we need a lot of guidance from the Commission.

This is where I see the most number of complaints with companies refusing to refund or cancel. Some are not charging a reasonable cancellation penalty and keeping all consumers’ money. To some extent it’s down to a lack of understanding.

What are consumer’s rights if they return goods?
There has been some misunderstanding around the return of goods. The Act gives consumers the ability to get a refund if the supplier has done something wrong (e.g. given something they didn’t ask for, delivered more than required etc). Then the consumer can return an item for a full refund at no charge within 10 days of getting it.

If someone purchases something through direct marketing they have a five day cooling off period so they can decide if they bought it in a rash moment. But then, if they want to return the item, they would have to pay for the return costs. When you buy defective goods or if they are not of good quality you can get a refund, repair or replacement within a six month period.

Those are the only circumstances that the Act provides for. Any other returns policy, for example, if you want to return items as they don’t fit etc, that’s all under the discretion and rules of the company you bought the goods from and is not required by the Act. Even if someone else purchases it for you they must get a note stipulating the returns policy. This then means that you as the consumer must think more carefully about what you want to buy.  

What are consumer’s rights in terms of cancellations?
What the Act says is that the consumer can cancel any advanced reservation or booking. But the supplier is also entitled to take a reasonable deposit and is entitled to charge a reasonable cancellation penalty if a cancellation is made. Usually a reasonable deposit is 10% but it does depend from industry to industry.

A lot of companies impose a sliding scale. It all depends on how long it would take that supplier to find another consumer to take that booking. So, for example, if I cancel with my doctor the day before and they have a waiting list of 15 people it should be very hard for them to charge for the full hour. So if you cancel 10 days before you really shouldn’t be charged.

The penalty should match the actual damages suffered by the company. So if they aren’t able to find someone else then it would be justifiable to have a higher penalty.

A consumer can’t be charged a penalty if they can’t honour an order if they die. I know this sounds strange but there have been incidences where consumers have been charged post mortem. The same applies if the consumer is hospitalised. So if you can’t go on holiday because you have to go into hospital you can cancel and get a refund without being charged.

Is there anything else that consumers are not aware of when it comes to their rights under the Act?
You cannot be charged for a quotation. I see this quite a lot in the motor service industry. They cannot charge you for a quote unless you agree to it. Some companies say: “We won’t charge you for the quote if you use our services.” Again, that defeats the object of getting a quote. The consumer should be entitled to get a quote and shop around for the best price and service.

Consumers need to be able to understand any agreements given to them. Under the law the agreements need to be in plain language and if there are any terms restricting their rights or imposing heavy obligations on them they need to be explained to them. Terms and conditions have to be clear and understandable. At the very base of this Act is fairness. It is not about giving consumers and unfair advantage. The Act is about giving people back what they paid for. It’s not about freebies and consumers must not take advantage of it as it creates problems for everyone else.

‘Understanding the Consumer Protection Act’ Book competition terms & conditions:

Three lucky subscribers to Justmoney’s newsletter stand a chance to win a copy of Juta’s Pocket Companion ‘Understanding the Consumer Protection Act’.

1. Entrants must become or be a Justmoney newsletter subscriber in order to qualify for the competition. The winners will be chosen at random from the list of subscribers. Illegible email addresses will not be accepted.

2. No more than three attempts will be made to reach the winners, after which the prize will be forfeited. Moneybags bears no liability if erroneous contact information is provided and no postal correspondence will be entered into.

3. This competition runs from 11 December 2012 till the 4 January 2013. Winners will be drawn at random on the 7 January 2013.

4. The judge’s decision is final and no correspondence will be entered into.

5. The prizes are non-transferable.

6. All entrants, by entering, accept that their entries will become property of Justmoney and may be used to compile a database for marketing and promotional purposes.

7. Justmoney may use names of the winner for promotional purposes without further compensation to the winner.

8. The prize winner may be required to appear in promotional material.

9. All entrants, by entering the competition, agree to be bound by the competition rules.

10. The Justmoney book competition is open to everyone residing in South Africa except employees of Justmoney, Habari Media, their merchandisers, advertising, promotional and PR agencies and all their immediate families. Entrants need to be 18 years of age at the time of entering.

11.    The winners will be asked to provide their residential/work addresses so that books can be posted to them.

Recent Articles

Featured How to prepare your car for a long-distance trip

We consider preparations needed to undertake a long-distance road trip.

Should you take out a loan or rent-to-own?

We compare personal loans to new finance models that are emerging, such as rent-to-own, which offers the same solution in a different format.

Why "insurance fronting" for your children is a bad idea

We examine the consequences of “insurance fronting” for your children and investigate legal ways to decrease your children’s premiums in South Africa.

Are you paying too much in bank fees?

We find out how you can bank with savvy, to best manage fees and charges.

Latest Guide

Guide to debt rehabilitation solutions