Ombud uses carrot, not stick - for now
The Consumer Goods and Services Ombudsman is relying on its powers of persuasion but warns it is working closer with the consumer commission so suppliers need to co-operate, or else…
THE CONSUMER Goods and Services Ombudsman might have fielded almost the same number of calls and logged a similar number of complaints as last year, but it’s substantially reduced its complaints backlog and turnaround time.
On Thursday, at the release of the annual report in Centurion, acting ombudsman Magauta Mphahlele said her office had received 22 889 calls and logged 5 593 complaints in the past financial year – down by two complaints on the previous year. Most of them were related to telecommunications, furniture retail, clothing retail, appliance manufacturers/retailers and wholesale suppliers.
“We have substantially reduced previous backlogs and reduced our turnaround time to finalise complaints from 61 to 47 days,” said Mphahlele.
“2017/2018 was overall a good year for our office as we continued to build internal capacity to be able to receive and resolve complaints in a fair and speedy manner.”
Most of the complaints are coming from the National Consumer Commission (NCC), which referred 1 900 cases (down from 2 396 the previous year). She said that was due to an increase in the number of consumers approaching her office directly.
The top five business sectors that attracted the most complaints were telecommunications (32%), furniture retail (17%), clothing retail (10%), appliance manufacturers or retailers (7%) and wholesale (6%).
CGSO spokesperson Ouma Ramaru said the office witnessed a spike in Telkom complaints, relating to contracts and handsets, which the CGSO referred to the NCC. (The Independent Communications Authority, or Icasa, is tasked with network-provider issues such as service quality, dropped calls, line installation, activation, transfer and suspension, and billing.)
But membership to the scheme is voluntary: the ombud scheme has 668 participants and not all of them are paying their fees, so it’s gone to court to seek a declaratory order on the powers of the CGSO board to levy participation fees. The matter is expected to be heard later this year.
Ramaru said the CGSO would encourage suppliers trading within the goods and services sector to sign up so they complied with section 82(2) of the Consumer Protection Act (CPA) and to give customers peace of mind.
The CGSO is forced to close files sometimes though because it cannot contact suppliers – especially smaller businesses that do not have e-mail access or landline numbers. It doesn’t mean they will get away with violating consumer rights though: the provincial Consumer Protection offices work closely with the ombud, so they refer such complaints to them for investigation and site visits.
Mphahlele said for that reason the CGSO encouraged consumers to deal as much as possible with suppliers who displayed the CGSO decal, showing that they subscribed to her office’s code because it would give consumers the assurance and confidence that the supplier had committed to complying with the CPA.
The top products or services complained about were services, cellphones, electrical appliances, furniture, timeshare, computers, building material, clothing and footwear. Most complaints related to cancellation of agreements, misleading marketing, poor service, defective goods and bad treatment.
Of the 5 593 complaints in the CGSO’s jurisdiction, 64% were resolved fully or partially in favour of the consumer with 53% being fully upheld, 7% being partially upheld and 4% provided with assistance.
Although the non-co-operative behaviour is in breach of the CPA, the CGSO relies on powers of persuasion because it cannot force compliance, so it refers such cases to the NCC, which closed 679 cases due to non-co-operation from the suppliers and referred 384 to the NCC for investigation.
Ramaru said there was a greater commitment from the commission in the past financial year.
“They’re asking us about trends and say they’ll submit those to their investigations department. It’s encouraging.”
Mphahlele warned non-co-operative suppliers to consider the reputational and sustainability threat to their businesses after a judgment last year by the National Consumer Tribunal where a supplier was handed a fine for non-compliance over its refusal to co-operate with the Motor Industry Ombudsman.
The party at fault was made an example of in the industry: Western Car Sales was ordered to refund the consumer R61 450 and fined R100 000 which it had to pay within 30 business days.
The tribunal took a dim view of the dealership’s lack of co-operation: “The respondent refused to comply with the (Motor Industry Ombudsman’s) ruling.
“It did not defend the application before the Tribunal. This behaviour is indicative of a dismissive attitude towards the rights of consumers and the dispute-resolving process. The respondent was granted an ideal opportunity to co-operate and resolve the matter. The fact that it chose to simply ignore the ruling and not engage further to resolve the dispute is an aggravating factor.”