26 June 2008

Consumer Provisions relating to Electronic Transactions

Consumer Protection Bill vs Electronic Communications and Transactions Act

Electronic consumerism is growing rapidly. Today, many more people use the internet to carry out electronic transactions and e-commerce. The Electronic Communications and Transactions Act (ECT Act) governs the effect of transactions concluded by way of electronic data messages. The ECT Act defines a transaction to include any transaction of either a commercial or non-commercial nature, including the provision of information and e-government services. Until recently, the ECT Act was the sole legislation governing electronic transactions.

In 2006, a draft of the Consumer Protection Bill was released. The Bill aims to promote fair business practices by governing every transaction occurring in South Africa between a supplier and a consumer. A transaction is defined as including any offer, arrangement or agreement which concerns the supply of goods or services in exchange for consideration between two persons. Accordingly, the Bill also governs electronic transactions. However, the Bill will not apply where it expressly excludes or exempts transactions from its application.,

In terms of the Bill, if a transaction falls within the ambit of Chapter VII of the ECT Act, then the provisions in the Bill relating to the consumer's right to privacy of personal information, the consumer's right in respect of the delivery of goods or supply of services, the consumer's right to a cooling-off period, the disclosure of a price, and records of sales, will not be governed by the Bill. Instead, the mandatory consumer protection provisions laid down in the ECT Act will prevail.

Chapter VII of the ECT Act requires suppliers to make certain minimum information available to the consumer prior to the conclusion of a contract. The supplier must provides a secure payment system and ensure that orders are executed within 30 days. If a supplier sends unsolicited commercial communications to a consumer, the supplier has to provide the consumer with the option to cancel such subscription and name the source from which the supplier received the consumer's information.

Furthermore, Chapter VII of the ECT Act provides for a cooling-off period which allows the consumer to cancel an electronic transaction within seven days after the date of receipt of goods without incurring any penalty except the direct cost of returning the goods. However, certain electronic transactions are excluded from the cooling-off provisions contained in the ECT Act, such as financial, tourist and lottery services. Of course, these types of electronic transactions will be governed by the Bill.

Any complaints regarding non-compliance by a supplier of the consumer provisions contained in the ECT Act may be lodged with the Consumer Affairs Committee. When the Bill is promulgated, any complaints in respect of non-compliance may be filed with the National Consumer Commission.

It is of utmost importance, when interpreting and analysing consumer legislation concerning electronic transactions, that both the Bill and the ECT Act are considered as the consumer provisions in both pieces of legislation are intertwined and in certain circumstances, both may apply.

Zahira Bhana

The information and material published on this website is provided for general purposes only and does not constitute legal advice.

We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter.

We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages.

Please refer to the full terms and conditions on the website.

Copyright © 2021 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com