Consumers and suppliers still struggling with the CPA

2014-11-25 00:00

BUSINESSES and consumers still have some way to go in terms of getting to grips with the Consumer Protection Act according to consumer law experts, and at times both parties can get it horribly wrong, especially when it comes to the retail sector.

So, as we head into the festive shopping season where retail ­purchases mount and tempers may rise if things go wrong, I asked a few consumer law experts what some of the major challenges are for ­businesses and consumers.

Consumer Goods and Services Ombudsman Neville Melville, whose office has received 5 000 consumer complaints so far in 2014, said the top three complained about sectors were furniture, telecommunications and appliances. These were mostly about delivery and quality of goods or ­defects; food safety; incorrect pricing; availability of advertised specials; performance of services; lay-by and contractual arrangements.

“Levels of compliance in large­ ­retailers is improving,” Melville said. “There may be wilful ignorance around the rules on deliveries and ­returns.”

He said a common business misconception was that retailers’ internal polices override the CPA, while smaller companies were largely “a law unto themselves” with scant fear for their reputations.

However, Melville said consumers also erred, mistakenly believing that they had a right to cancel any and all contracts within a five-day “cooling-off” period, and to exchange any goods if they had changed their minds.

“There is no general right to a change of mind exchange, which applies only if [the purchase was a result of] direct marketing,” he said.

Direct marketing includes the likes of telemarketing or where a salesman approaches you in a public space like a mall (and then coaxes you into a store) or visits your home or work to sell his products. In such cases, in terms of section 16 of the CPA, ­consumers can return unwanted goods without penalty for any reason within five business days of delivery.

SA National Consumer Union vice-chairperson Clif Johnston said consumers also confused retailers’ sometimes generous exchange ­policies and extended guarantees with the CPA.

“Consumers often confuse a ­supplier’s customer care policy with the CPA. While such a policy should be compliant with the minimum ­requirements of the CPA, it may also go much further in the interests of promoting customer loyalty,” ­Johnston said.

“Customers experiencing such a special level of service may conclude that it’s a requirement of the CPA and therefore able to be demanded everywhere,” he said.

Rosalind Lake of Norton Rose Fulbright said there was inadequate awareness of the law across the board.

“One of the most common areas of confusion relates to consumers’ rights to return defective products and their right to refunds or compensation. Consumers need to request or read carefully any store returns policy.

“The Consumer Protection Act describes certain circumstances in which a supplier is required to give a cash refund and this is why a no- refund policy is unacceptable. However, if a customer is simply dissatisfied with their choice, or a gift is given to someone who doesn’t like it, a store is perfectly entitled to provide the consumer with a credit note instead of a cash refund. The CPA does not cover situations of buyer’s remorse,” Lake said.

So, as you shop this holiday season, bear in mind both your rights and the limitations of the CPA.

• Send your consumer complaints and compliments to consumer@3i.co.za.

CASE STUDIES

Consumer entitled to choose

A consumer bought a cellphone that turned out to be defective. The supplier advised that the store policy provides that:

• Cellphones may not be refunded.

• Faulty cellphones will be exchanged or repaired subject to the relevant network provider’s terms and conditions.

The supplier was advised that the store’s policy cannot override the CPA and if goods are defective the consumer would be entitled to a refund, replacement or repair at his direction.

Special orders warning

A consumer paid a R17 000 deposit for a set of tools and six months later informed the supplier that due to ­financial constraints he wanted to cancel the deal.

He asked for a refund but the supplier pointed to its “no refund policy” and demanded that the consumer pay the outstanding balance of the price of the tools.

The supplier advised that the price of the tools at the time of the order was R85 000 and that a signed contract indicated that the outstanding balance would be paid within four weeks. The supplier had ordered the tools from Australia.

In his assessment, the ombudsman referred to section 17 of the CPA ,which says “a consumer may in spite of any term to the contrary, cancel an advanced order … subject to the imposition of a reasonable charge for cancellation for the order unless the goods were a special order.”

The ombudsman found that the tools appeared to be a special order and the consumer had entered a binding agreement and there was no legal basis to instruct the supplier to cancel the deal.

Source: Consumer Goods and ­Services Ombudsman.

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