Business methods still catching up to the law
Important for both sides in a transaction to comply with the Consumer Protection Act
ONE of the unfortunate consequences of the inability of the National Consumer Commission to enforce the Consumer Protection Act on behalf of the tens of thousands of consumers who have complained has been the fact that the law is largely ignored by suppliers. In the absence of any policing of the act or any proper public education little has been done to improve methods of doing business.
For instance, we all come across disclaimer notices on walls and exemption clauses in contracts that are now useless in the face of a consumer claim. If there is a disclaimer notice on your wall or in your agreement, it has to be clear that it is a disclaimer and what its effect is. If you charge for parking, “Cars parked at owners risk” is no longer going to help you. If you accommodate guests they can probably draw a line through any disclaimer you are relying on.
Many sales agreements still contain an “as is” ( voetstoots ) clause despite the fact that the seller of goods cannot so easily contract out of liability for selling defective goods. It may be worth leaving the clause there for corporate consumers but don’t expect to rely on it for sales to individuals. For the same reason, if you are selling extended warranties you better make sure that they provide protection that is not already given to the consumer under the act. You may end up as the defendant in a class action requiring you to pay back all the charges you have levied for useless extended warranties.
But never forget that we are all consumers ourselves. If you want to buy a new tablet computer, don’t buy it through your company and don’t buy it overseas. If you buy it personally in SA you will get all the plentiful protection that the act offers you. As suppliers you should ensure that you have a well managed and empathetic goods return policy. On those occasions where defective goods are sold, the consumer must be given a satisfactory outcome at the point of sale and not given an excuse to exercise their considerable rights under the act. That may result in a compliance notice and reputational harm as a supplier.
Suppliers should also protect themselves where possible and make provision for who bears responsibility for defective goods in the supply chain. The supply chain includes importers, manufacturers, wholesalers and retailers. They need to agree among themselves who will bear the loss if defective goods are returned and have indemnities in place to see that the responsibility falls on the right party.
The act should be approached fairly and seriously. I was told a story about a motor dealer who sold a car to a lawyer on a Friday only to find it back on the premises on the Monday morning with a note saying “I am exercising my rights under the Consumer Protection Act” and the payment was stopped. If this sort of thing is done as a means to get free use of a vehicle by a person who has no intention of entering into the transaction, there may be no contract at all. The buyer could be liable for any loss suffered by the seller. Don’t fall for unlawful use of the act.
Don’t wait for the consumer commission to get back on track. Do what you have to do now.
Patrick Bracher is a director at Norton Rose SA