Act puts the squeeze on auctioneers
Consumer Protection Act provides for transparency in the industry
THE Consumer Protection Act, 2008 applies to every transaction concluded within SA between suppliers and persons (natural or juristic) whose annual turnover or asset value is equal to or less than R2m.
One of the highlights of the act is its regulation of the auction industry, which up until now, has been operating under the radar with little interference from the legislature.
The legislation has seen many auctioneers and auction houses scrambling to ensure that their rules and regulations comply with the new act.
Section 45 of the legislation regulates the manner in which auctions must be carried out and almost half of the act’s regulations deal with auctions. The purpose of the law is to promote transparency in an industry where, until recently, the consumer’s rights have been shrouded in ambiguity.
In terms of the act’s regulations, save for closed auctions and livestock auctions which are conducted on a weekly or monthly basis under the same rules and at the same time, no goods may be sold at an auction unless it has been advertised at least 24 hours prior to its commencement.
The advertisement must be in a legible format and size and must contain a reference as to where the rules of auction can be obtained.
The advertisement must contain the date, place and time of the auction and be advertised in a manner that allows the public to have a reasonable opportunity to become aware of the auction, the goods on offer and the rules governing the auction.
The regulations also require that at least 24 hours prior to the commencement of an auction, the auctioneer drafts the rules of the auction which must meet the requirements of the regulations.
The auction rules may not exclude liability in respect of inaccurate information provided in the advertisement of the auction.
The regulations contain a number of provisions which are aimed at maintaining a certain level of transparency regarding the manner in which auctions are conducted.
Auctioneers may not sell goods at an auction unless they have a written agreement with the sellers of the items. It is now a requirement for all bidders to register before the start of an auction. The information needed for registration must comply with the Financial Intelligence Centre Act, 2000.
The regulations require that a person who bids at an auction on behalf of another must produce a letter of authority.
Consumers also have the right to inspect the goods on offer at an auction prior to the commencement of the auction, without having to pay any fee to do so. The regulations further provide that where the auctioneer or seller reserves the right to bid in an auction, a statement to this effect must be put in the auction rules.
Furthermore, it is mandatory for an auctioneer to keep a vendors roll, in