Now, more than ever, consumers need protection
The Covid-19 financial crisis is likely to worsen the abuse of citizens’ rights by the government and the private sector. Both are trying to squeeze more and more money from hard-pressed citizens, with scant regard for their consumer or public-service rights.
The ombuds’ offices established to protect the consumer and public-service rights of citizens should urgently be strengthened to shield citizens from an avalanche of abuse.
Sadly, the ombuds’ offices in both the public and private sectors are often the weak links in the citizen-protection institutional architecture.
SA’s apex ombud, the Office of the Public Protector, is a case in point. It was established to protect citizens from public service abuse, but is increasingly seen as ineffectual in the midst of blatant neglect by the government of citizens’ basic public-service rights.
Municipalities arbitrarily switch off the services of residents for alleged arrears, in many cases because of their own billing inefficiencies. The public protector appears to be too involved in political battles to tackle such abuse.
Last year judge Bernard Ngoepe, the tax ombud, said SA needs a taxpayers’ bill of rights to ensure taxpayers are not abused by the tax authority as it squeezes tax income from ordinary citizens to fill depleted public coffers.
Many ombuds’ offices either lack resources, are staffed by incompetent, politically connected cadres, or lack the wherewithal to take on powerful big industry and big government. Public sector ombuds’ offices often won’t stand up to the government, and private sector ones are too deferential to the industries they should police.
Because of the failures of many ombuds’ offices, citizens bypass them and take the government and businesses to court. A typical case involves businesses in the tourism and hospitality industry, which recently took the insurer Santam to court for being unwilling to pay out legitimate Covid claims.
Many insurance companies have been guilty of trying to skimp on legitimate claims. It is very likely that such tight-fistedness will escalate during this period. Generally, seeking redress for rejections of legitimate claims by insurance firms is frustrating, even in cases where insurance firms have internal arbitrators. Before Covid-19, the ombuds’ offices for both short- and long-term insurance saw substantial increases in consumer complaints, year on year.
Banks are especially guilty of abuse. For years banks have been accused of illegally charging double interest in the first month of a mortgage loan, which causes mortgages to be in arrears from the start of the repayment period. In 2005, in a case of citizen activism, Emerald van Zyl took banks to court over this. Up to then, the ombud for banking services was nowhere to be seen on this abuse.
The Covid-19 financial crisis will lead to a slashing in income for many South Africans, and they may not be able to pay for financed assets such as homes, cars and goods. It is crucial for the banking ombud’s office to proactively monitor banks that, in contravention of citizens’ consumer rights, unfairly repossess homes, cars and goods.
Telecommunications is also abusive of consumer rights. Telecoms regulator Icasa’s Consumer Protection Unit, set up to protect consumers from abuse by mobile operators, is often missing in action.
Ombuds’ offices should be independent of the industries they serve. Accusations have been made that the public protector is too close to powerful politicians.
Early this year Ngoepe, the tax ombud, said his office — which has to protect citizens from abuse by the South African Revenue Service — was not fully independent of Sars.
One of the weaknesses of SA’s democratic system is a lack of strong, dedicated consumer civil society groups. Civil society organisations must tackle consumer rights in both the public and private sectors. Opposition parties must also intervene more to protect consumers from both public and private sector abuse.
Parliament has been soft on the abuse of citizens’ rights by public and private organisations. Parliament must interrogate reports from ombuds’ offices, and summon government departments and private companies to account for their abuse of citizens’ public-service and consumer rights — and compel them provide immediate redress.
It is crucial to monitor banks that unfairly repossess homes, cars and goods