Experts take hard look at Optimal

SHARE-TRADING SOFTWARE: EXCUSES DON’T HOLD WATER

Legal experts say reasons given by Optimal companies why they won’t refund clients amount to little more than weak excuses.

Business’s probe into the companies selling Optimal Market Systems share-trading and analysis software shows they rely on questionable interpretations of the law to frustrate clients.

Most complaints by unsatisfied customers say the companies do not honour their guarantees. Most particularly, they allegedly do not refund customers who return the product within the fiveday cooling-off period that is not only stipulated in the Consumer Protection Act (CPA), but is promised in their own contracts.

Three wise men

Three law experts say the companies’ excuses, backed by their lawyers, Van der Merwe Inc, don’t appear to carry any weight.

Direct marketing sales are subject to the CPA. Section 16 of the Act says a consumer may return goods sold through direct marketing for a full refund if they give notice within five working days.

But clients complain their requests for refunds were refused, based on two sub-clauses which insist unopened and undamaged software must also be returned within five days:

Prof Tjakie Naude from the department of private law at the University of Cape Town says these clauses are inconsistent with the Act. “The supplier is not allowed to require that the consumer return the goods within those five days,” she notes. “They only have to give notice and must then return the goods within 10 business days.”

Van der Merwe Inc claims two other pieces of legislation override the CPA in their case. A letter it sent to a customer’s lawyer states: “Please note that in terms of the provisions of the Electronic Communications and Transactions Act, Act 23 of 2002 ... read together with the Copyright Act, Act 98 of 1978, our client is not in a position to accept your client’s cancellation and does [sic] the agreement remains intact”.

Moneyweb asked Van der Merwe Inc what relevance the Electronic Communications and Transactions Act had, as the products are all sold in person. The firm replied: “The Act is applicable in that the transaction was concluded by means of a credit card transaction.”

However, an expert on the Act disagrees. Dominic Cull of Ellipsis says using a credit card does not make something an electronic transaction. “[The Act] will not apply where the transaction was done in person but payment was made electronically, so I disagree with the interpretation.”

A copyright expert says the mere opening of a package cannot constitute a copyright infringement. Herman Blignaut, a partner at intellectual property specialists Spoor & Fisher, said the Copyright Act requires an unauthorised reproduction for the copyright to be compromised, and this clearly is not the case when a software package has been legally purchased.

The lack of warranties, also infringes “as the CPA provides for remedies for services which are not of the quality that persons are generally entitled to expect”, Naude notes.

They must return the goods within 10 days.

Fee increases

Unilateral fee increases in the contracts also infringe as the Act says “any price increase clause is presumed to be unfair if the consumer is not given the right to terminate the agreement in response”.

Van der Merwe Inc and the companies selling Optimal Market Systems were given a chance to respond to a draft of this article, but did not do so.