Accreditation of the ombudsman’s office to make resolving consumers’ complaints easier

2015-06-02 10:42
Lyse Comins

Lyse Comins (File)

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THOUSANDS of businesses, previously out of reach when consumers wanted to file complaints against them with the Consumer Goods and Services Ombudsman (CGSO), have now been brought into the loop with the accreditation of the ombudsman’s office under the Consumer Protection Act.

This is good news for consumers but means more work for businesses that have not yet got their house in order in terms of eradicating unfair and unconscionable practices as well as any potentially misleading, deceptive or fraudulent conduct in terms of the CPA.

Department of Trade and Industry minister Rob Davies on Friday launched a new compulsory code of conduct for the consumer goods and services sector, accrediting the CGSO as the official “alternative dispute resolution scheme” under the CPA.

Ombudsman Neville Melville said the move “considerably broadened” the scope of his office, which previously operated as a voluntary scheme with businesses, mostly larger retailers and manufacturers, expressly opting in, leaving customers of thousands of smaller retailers and suppliers out in the cold.

“Now the state has delegated to us by statute the power to resolve complaints that arise from contraventions of the CPA. This power was previously exercised solely by the NCC and other bodies referred to in the CPA such as provincial consumer protectors,” he said.

“We were until now unable to deal with a lot of complaints that came to us, especially small businesses, and now we can deal with virtually all complaints. We must report on compliance with the code and assist smaller businesses in understanding the CPA. Ultimately this will change business behaviour for the better,” Melville said.

He said the new code applied to all businesses, except those governed by other regulations, which were now legally obliged to formally register and co-operate with his office.

Businesses that don’t register and ­co-operate could be slapped with an administrative fine, he said, and failure to co-operate could be taken as an aggravating factor when the National Consumer Tribunal considers matters.

Consumer groups and legal experts have welcomed the move.

SA National Consumer Union vice-chairperson Clif Johnston, who was involved with the working group that drew up the code and is currently a non-executive director of the CGSO board, said the union “strongly supported” the move.

“This plugs a major gap in providing easy and accessible dispute resolution services at no cost to consumers across a very wide range of activities,” he said.

Johnston said the code had the force of the law and any contraventions were regarded as contraventions of the CPA.

“The code requires suppliers to have effective internal complaints-handling processes and to inform consumers of their right to escalate a complaint to the CGSO if not resolved by the supplier within 15 business days,” he said.

“With regard to complaints, the CGSO is authorised only to mediate between the parties. The CGSO has no powers to compel a supplier to comply with a ruling, but can refer a matter to the NCC, which can take it to the tribunal, which has powers to impose hefty administrative fines,” he said.

Consumer Fair chairperson Thami Bolani said most consumer complaints involved the consumer goods and services sector and the CGSO was “the most effective complaints-handling body” in the country.

“Consumers deserve an effective body to address their concerns. Government consumer protection agencies, despite the fact that they are well funded, have been a major disappointment.”

Norton Rose Fulbright SA director and CPA expert Rosalind Lake said all suppliers in the sector were bound by the code and had to financially support the ombudsman’s office.

“Suppliers will have to ensure that they have a good complaints handling process and processes in place to retain records of consumer complaints. Suppliers will also need to inform consumers about their right to refer complaints to the ombud and will need to display the decal for the CGSO with a telephone number that consumers can call to complain,” she said. “Suppliers who do not comply with the CPA are going to be taken to task as consumers become more aware of their rights and understand that there is an efficient body to deal with these complaints.”

Lake advised consumers to actively educate themselves about their rights.

“The Consumer Protection Act is far reaching and South African consumers are very well protected. However, the only way this act is going to be an effective tool is if consumers actually complain when they do receive poor service, poor quality goods or are mistreated by suppliers.”

Lake advised consumers to first escalate complaints directly within a business before turning to the ombudsman.

“Consumers should also keep a record of all their interactions with the supplier prior to referring a complaint to the CGSO,” she said.

Meanwhile, the CGSO launched his annual report at the same event, which showed that he had resolved 4 583 complaints, ruling 82% of the time in favour of consumers, during the 2014/15 financial year.

According to the annual report, the highest number of complaints related to furniture (789), followed by cellphones (522), food (81) and appliances (60). Of all the complaints, 44% were about goods and 38% about services, followed by complaints about agreements (15%).

The report raised the issue that some suppliers refused to give consumers a refund for defective goods, pointing to “no refunds” clauses in their agreements or on displayed notices, while others tried to impose their own internal policies to repair rather than provide consumers with their right to the choice of a refund or replacement in terms of the CPA.

For more information about the ­ombudsman visit Send your consumer issues to

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