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Consumer Protection

Overview CPA

The landmark Consumer Protection Act, 68 of 2008 was signed into law by the President on 24 April 2009. The objective of the Act is "to promote and advance the social and economic welfare of consumers in South Africa".

Certain provisions, most notably those providing for the creation of the Consumer Protection Commission, came into effect on what is referred to as the "early effective date" (24 April 2010). The remainder of the Act came into effect on 1 April 2011.

The Act aims to introduce a single, comprehensive framework for consumer protection affairs in South Africa and has been described as "a Bill of Rights for consumers". The Act makes provision for and guarantees the following fundamental consumer rights:

  • the right to equality in the consumer market
  • the right to privacy
  • the right to choice
  • the right to disclosure and information
  • the right to fair and responsible marketing
  • the right to fair and honest dealing
  • the right to fair, just and reasonable terms and conditions
  • the right to fair value, good quality and safety and
  • suppliers' accountability to consumers

With this codification of consumer rights comes a host of supplier obligations. Suppliers of goods and services at all levels of the supply chain are directly affected and businesses should ensure that they conduct their affairs in compliance with the Act.

The Act finds wide application. It applies to:

  • Every transaction occurring within the Republic of South Africa, unless the transaction has been exempted.
  • The promotion of any goods or services, or of the supplier of any goods or services, within the Republic, subject to certain exceptions.
  • Goods or services that are supplied or performed in terms of a transaction to which the Act applies.
  • Goods that are supplied in terms of a transaction that is exempt from the application of the Act.

It is clear that the Act applies not only to the provision of goods or services but also to the promotion and marketing thereof and the actual agreements between suppliers and consumers regulating the supply of those goods and services. In this regard the Act regulates, to an extent, the content of agreements entered into between suppliers and consumers for the supply of goods and services, including, subject to certain exceptions, the agreements entered into between franchisors and franchisees.

The Act deals with an array of issues ranging from unwanted direct marketing, fixed-term agreements, pre-authorisation of repair or maintenance services, cancellation of advance reservations or bookings; over-selling and over-booking; return of goods; product labeling and trade descriptions, sales records, grey market goods, bait marketing, catalogue marketing and auctions to unfair contract terms, written consumer agreements and strict liability for damage caused by unsafe, defective or hazardous goods.

On 1 April 2011 the Department of Trade and Industry published a comprehensive set of regulations, to be read together with the Act. The regulations deal with, for example:

  • Franchise agreements
  • Disclosure document for prospective franchisee
  • Mechanisms to block direct marketing communication
  • Maximum duration for fixed-term consumer agreements
  • Product labeling and trade descriptions: textiles, clothing, shoes and leather goods
  • Product labeling and trade descriptions: genetically modified organisms
  • Disclosure of reconditioned or grey market goods
  • Information to be disclosed by intermediary
  • Records to be kept by intermediary
  • Promotional competitions
  • Cautionary statement for alternative work schemes
  • Prohibition on intermediary arranging transport contracts
  • Public property syndication schemes
  • Auctions: rules, advertising, records, bidding, etc
  • Lay-by's
  • Form, manner and fee to register business names etc.

Suppliers at all levels of the supply chain are directly affected by several of the provisions of the Act as well as the regulations. The same applies to those who promote goods or services. It is important for businesses to reassess their interaction with consumers on all levels and to familiarise themselves with the provisions of the legislation and the impact thereof on, for example, their standard terms and conditions, disclaimer notices, business names, insurance policies and marketing practices.

The far-reaching provisions of the Act are bound to redefine the way business is conducted and the manner in which ordinary South Africans interact with the suppliers of goods and services.

Cliffe Dekker Hofmeyr is equipped to assist with an array of consumer and supplier related issues. Our team of consumer law specialists has vast experience in this field and has been assisting various clients with, for example:

  • Specialist advice and opinions in relation to the Act and the regulations.
  • Advice with regard to risk assessment and implementing risk-mitigating measures.
  • Reviewing internal documentation, systems and processes to ensure compliance.
  • Reviewing standard terms and conditions, supply and distribution agreements, service level agreements and franchise agreements.
  • Tailor-made presentations and compliance familiarisation seminars.
  • Comprehensive training sessions, including training material for employees.

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