STUDY UNIT 3 – CONSUMER PROTECTION

Nagel – Chapter 41

13 and 15 August 2019

THE CONSUMER PROTECTION ACT 68 OF 2008

 Signed by the President on 24 April 2009

 General effective date – 31 March 2011 and the regulations issued therewith were published on
1 April 2011

 Purpose of the CPA: promote and advance the social and economic welfare of consumers in
South Africa
 How: Establishing a legal framework for fair market
Reduce disadvantages in accessing of goods and services
Promoting fair business practice

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FUNDAMENTAL CONSUMER RIGHTS PROTECTED BY THE CPA

1. The right of equality in the consumer market;

2. The consumer’s right to privacy;
3. The consumer’s right to choose;
4. The right to disclosure and information;
5. The right to fair and responsible marketing;
6. The right to fair and honest dealing;
7. The right to fair, just and reasonable terms and conditions; and
8. The right to fair value, good quality and safety.

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PRESERVATION OF COMMON-LAW RIGHTS AND INTERPRETATION

 No provision of the CPA must be interpreted  prevent a consumer from exercising any rights
afforded to them by the common law
 In the event of an inconsistency between a provision of the CPA and any other Act, the provisions
of both Acts apply concurrently, to the extent that it is possible to apply and comply with one of the
inconsistent provisions without contravening the second.
 If this is not possible, the provision that extends the greater protection to a consumer wins over
the alternative provision

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IMPORTANT DEFINITIONS (READ)

“Consumer”, in respect of any particular goods or services, means—

(a) a person to whom those particular goods or services are marketed in the ordinary course of the
supplier’s business;
(b) a person who has entered into a transaction with a supplier in the ordinary course of the
supplier’s business, unless the transaction is exempt from the application of this Act;

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IMPORTANT DEFINITIONS (READ)

“Goods” includes—
(a) anything marketed for human consumption;
(b) any tangible object not otherwise contemplated in paragraph (a), including any medium on which
anything is or may be written or encoded;
(c) any literature, music, photograph, motion picture, game, information, data, software, code or
other intangible product written or encoded on any medium, or a licence to use any such
intangible product;
(d) a legal interest in land or any other immovable property, other than an interest that falls within the
definition of “service” in this section; and
(e) gas, water and electricity;

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IMPORTANT DEFINITIONS (READ)
“Promote” means to—
(a) advertise, display or offer to supply any goods or services in the ordinary course of business,
to all or part of the public for consideration.
“Service” includes, but is not limited to—
(a) any work or undertaking performed by one person for the direct or indirect benefit of another;
(b) the provision of any education, information, advice or consultation, except advice that is subject
to regulation in terms of the Financial Advisory and Intermediary Services Act, 2002;
(c) any banking services, or related or similar financial services, or the undertaking, underwriting or
assumption of any risk by one person on behalf of another, except to the extent that any such
service—
(i) constitutes advice or intermediary services that is subject to regulation in terms of the Financial Advisory
and Intermediary Services Act, 2002; or
(ii) is regulated in terms of the Long-term Insurance Act, 1998, or the Short-term Insurance Act, 1998;
(d) the transportation of an individual or any goods;
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IMPORTANT DEFINITIONS (READ)

(e) the provision of—

(i) any accommodation or sustenance;
(ii) any entertainment or similar intangible product or access to any such entertainment or intangible product;
(iii) access to any electronic communication infrastructure;
(iv) access, or of a right of access, to an event or to any premises, activity or facility; or
(v) access to or use of any premises or other property in terms of a rental;
(f) a right of occupancy of, or power or privilege over or in connection with, any land or other
immovable property, other than in terms of a rental; and
(g) rights of a franchisee in terms of a franchise agreement;

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SCOPE OF APPLICATION OF THE CPA

 Applies to every transaction occurring within South Africa

 The promotion of goods or services, or of the supply of goods and services and unless exempted
from the CPA
 One party (supplier) must act in the ordinary course of business, whilst the other (consumer)
may not
 The consumer must purchase in his/her personal capacity for the CPA to apply
 "Once-off" transactions fall outside the ambit of the CPA

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TRANSACTIONS THAT FALL OUTISDE THE AMBIT OF THE CPA

1. Goods and services that are promoted or supplied to the State;

2. Consumer is a juristic person whose asset value or annual turnover, at the time of the agreement, is
equal to or exceeds R2 million;
3. If the transaction falls within an industry-wide exemption granted by the Minister to a particular industry;
4. The agreement constitutes a credit agreement under the National Credit Act 34 of 2005, but the goods and
services that are the subject of the credit agreement are not excluded from the ambit of the Act;
5. Services to be supplied under an employment contract;
6. Transactions giving effect to a collective bargaining agreement within the meaning of section 23 of the
Constitution 1996 and the Labour Relations Act 66 of 1995; and
7. A collective agreement as defined in section 213 of the Labour Relations Act 66 of 1995.

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Protection of consumer rights

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1. THE CONSUMER’S RIGHT OF EQUALITY IN THE CONSUMER
MARKET
 Section 8 prohibits the supplier of goods and services from unfairly discriminating against a
person or category of persons in relation to access, priority of supply, quality and pricing.
 Grounds of discrimination: race, gender, sex, pregnancy, marital status, ethnic or social origin,
colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.
 Section 9 of the CPA provides for reasonable grounds for differential treatment of consumers in
specific circumstances – minors, pensioners and gender.
 Should a consumer wish to file a complaint for an alleged contravention of the CPA, such person
may approach either the National Consumer Commission, which must refer the complaint to the
Equality Court.
 Section 8 of the CPA contains a presumption that any differential treatment contemplated in the
section is unfair discrimination, unless it has been established that the discrimination is fair.

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1. THE CONSUMER’S RIGHT OF EQUALITY IN THE CONSUMER
MARKET
 A court may draw an inference that the supplier has discriminated unfairly if:
 the supplier has performed differential treatment according to section 8 ;
 differential treatment is based on the prohibited ground of discrimination; and
 supplier failed justify the difference in treatment.

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2. THE CONSUMER’S RIGHT TO PRIVACY

 Sections 11 and 12 protect a consumer’s right to privacy by placing restrictions on unwanted

direct marketing.
 “Direct marketing” - approaching a person with purpose of promoting or offering supply a good
or service in the ordinary course of business or to request for donation
 Section 16 provides consumers with a right to a cooling-off period after direct marketing:
 A consumer has right to cancel that transaction,
 by writing a notice to the supplier
 within 5 business days after the date which
a) the transaction was concluded or
b) when the goods were delivered

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2. THE CONSUMER’S RIGHT TO PRIVACY

 A supplier must return any payment received from the consumer within 15 business days after
receiving notice of the rescission (if no goods had been delivered to the consumer) or receiving
from the consumer any goods supplied ito the transaction.

 A supplier may not engage in direct marketing directed to a consumer at home on:
a) Sundays or public holidays; or
b) on Saturdays before 09h00 and after 13h00; or
c) on any other day between 20h00 and 08h00.

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3. THE CONSUMER’S RIGHT TO CHOOSE

Section 13: Right to select suppliers

 Supplier must no require, as a condition of offering to supply any goods/services or entering in an
agreement or transaction, that a customer must:
a) Purchase any other goods/services from the supplier.
b) Enter into an additional transaction with the same supplier or an appointed 3rd party
c) Agree to purchase any particular goods/services from an appointed 3rd party
-This is known as bundling
-When is bundling allowed?
a) Convenience of these G/S outweighs the limited of the consumer’s right to choose;
b) It’s to the economic benefit of the customer; or
c) the bundled goods are offered separately and at individual prices.

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3. THE CONSUMER’S RIGHT TO CHOOSE
Section 14: expiry and renewal of fixed term contracts
 Consumer may terminate a fixed-term agreement on expiry of the fixed term, without penalty or costs
(consumer will be liable for costs up to the date of cancellation)
 Consumer may cancel a fixed-term agreement before its expiry by giving the supplier 20 business days'
notice in advance:
a) Consumer remains liable for amounts due up to date of cancellation;
b) Supplier can charge a reasonable cancellation penalty
c) Supplier must credit the customer any amount due to customer
 Supplier can terminate the fixed-term agreement 20 business days after written notice to the consumer of
a material failure by the consumer to comply with the agreement unless the consumer has rectified the
failure within that time
a) Supplier must give the consumer written notice of the impending expiry of the agreement (max 80 and min 40 days
prior to the impending expiry)
b) Expiry of the agreement: automatically renewed on a month-to-month basis – unless a consumer cancels or renews it

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3. THE CONSUMER’S RIGHT TO CHOOSE

Section 15: pre-authorisation of repair or maintenance services

 Only applies to a transaction or consumer agreement with a value above R1.
 Consumers have the right to request written cost estimates/quotations from suppliers, prior to the
suppliers executing any repairs or maintenance services.
 Suppliers are not permitted to charge consumers for drawing up any cost
estimates/quotations(preparation), including any cost of performing any diagnostic work,
disassembly or re-assembly required to prepare an estimate, unless the supplier has disclosed
the price for preparing an estimate and the customer has approved it.

Section 16: Cooling-off right (see discussion under the right to privacy)

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3. THE CONSUMER’S RIGHT TO CHOOSE

Section 17: Consumer’s right to cancel advance reservations, bookings or orders

 Suppliers are entitled to request a reasonable, advance deposit for reservations, bookings or
orders, depending on the nature of the business and specific circumstances.
 Consumers have the right to cancel any advance reservations, bookings or orders for goods and
services that must be supplied
 Suppliers are entitled to impose a reasonable charge for the cancellation of reservations,
bookings or orders, depending on the nature of the business and specific circumstances.
 When would a charge be unreasonable? – self-study
 Death or hospitalisation? No charge for cancelation

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3. THE CONSUMER’S RIGHT TO CHOOSE

Section 18: Right to choose or examine goods

 Consumer will only be liable if goods damaged are as a result of the consumer's gross
negligence, recklessness, malicious behaviour or criminal conduct
 Open stock? Right to select or reject
 Description or sample? Must correspond with the actual goods

Section 19: Rights with respect to delivery of goods or supply of services

 Supplier is responsible for delivering goods or performing a service on the agreed date, time,
place, at his own cost and that the goods will remain the supplier's risk until the consumer has
accepted delivery.
 Consumer is allowed to examine goods.

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3. THE CONSUMER’S RIGHT TO CHOOSE

 If the supplier delivers goods or perform any performance on a date or at a time other than as
agreed with the consumer, the consumer may either:
a) Accept delivery of the goods or performance of the services at that location, date and time; or
b) Require the delivery or performance at the agreed location, date and time, if that date and time have not
yet passed; or
c) Cancel the agreement without penalty.

 If the supplier delivers to the consumer a larger quantity of goods than the consumer agreed to
buy:
a) the consumer can reject all the delivered goods; or
b) accept delivery and pay for the agreed quantity and treat the excess as unsolicited goods.

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3. THE CONSUMER’S RIGHT TO CHOOSE

Section 20: Consumer’s right to return goods

 Consumer may in certain circumstances return goods within 10 business days and receive full
refund.
-goods were not examined
-goods are delivered but agreements was cancelled
Section 21: Unsolicited goods or services
 A consumer who is the recipient of unsolicited goods or services is not obliged to pay for such
goods or services. Goods or services will be said to have been unsolicited if the consumer did not
implicitly or expressly request the goods or services.
 If within 10 days after delivery of any goods to the consumer – supplier informs the consumer that
the goods were delivered in error, those goods become unsolicited only if the supplier fails to
recover them within 20 business days after informing the consumer

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3. THE CONSUMER’S RIGHT TO CHOOSE

 Goods delivered to a consumer and are clearly addressed to another person, and have obviously
been misdelivered/intended for another person – goods become unsolicited only if the recipient
informs the supplier that the goods were misdelivered and the goods are not recovered within the
following 20 business days.
 Pay for unsolicited goods? No obligation to pay

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4. RIGHT TO DISCLOSURE AND INFORMATION

Section 22: Right to information in plain and understandable language

 Plain language = consumers with average literacy skills and minimal experience as consumers can
understand the contents of documents without undue effort.
Section 23: Disclosure of price of goods and services
 Retailer must not display goods without displaying the price as well.
 Two prices displayed?
Section 24: Product labelling and trade descriptions
 “Trade description” = any description, statement, direct or indirect indication relating to the number,
weight, measure, the manufacturer or producer, the ingredients, material, place of origin, mode of
manufacturing or patents, copyright or privilege regarding the goods.
 A person must not knowingly apply to any goods a trade description that is likely to mislead the consumer
or to alter, deface, cover, remove or obscure a trade description or trade mark applied to any goods in a
manner calculated to mislead consumers.

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4. RIGHT TO DISCLOSURE AND INFORMATION

Section 26: Sales records

 A supplier of goods or services must provide a written record of each transaction to the
consumer. Such sales record must contain the following information, inter alia:
a) Supplier’s full name and registered business name and VAT number;
b) Address of the premises at which or from which, the goods/services were supplied;
c) Date of the transaction;
d) Name or description of the goods/services supplied or to be supplied;
e) Unit price of any goods or services supplied or to be supplied;
f) Quantity of any goods or services supplied or to be supplied;
g) Total price of the transaction, before any applicable taxes;
h) Amount of any applicable taxes.

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5. RIGHT TO FAIR AND RESPONSIBLE MARKETING

Section 29: General standards for marketing of goods and services

 Sets out general standards for marketing of goods and services in terms of which a producer,
importer, distributor, retailer or service provider is prohibited from marketing goods – likely to
imply a false or misleading representation.
 Prohibited to do marketing in a manner that is misleading, fraudulent or deceptive in any way.

Section 30: Bait marketing

 Supplier advertises specific goods at discounted prices – real aim is to draw consumers to his
premises in the hope that once there, they will purchase other goods.
 May not mislead or deceive consumers – actual availability of those goods or services.

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5. RIGHT TO FAIR AND RESPONSIBLE MARKETING

Section 31: Negative option marketing

 Supplier may not promote goods or services on the basis that an agreement automatically
comes into existence unless the consumer declines such offer or inducement.
 Any agreement entered into as a result of negative option marketing is void.
Section 39: Agreements with persons lacking legal capacity
 Mentally unfit – void.
 Voidable at the option of the consumer, if at the time of the agreement:
a) Consumer was an unemancipated minor;
b) Agreement was made without consent of an adult responsible for the minor;
c) Agreement has not been ratified by an adult responsible for the minor or the minor after being
emancipated or becoming an adult.

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6. RIGHT TO FAIR AND HONEST DEALING

Section 40: Unaccepted conduct

 Conduct that is unethical or improper to the extent that it would shock the conscience of a reasonable
person.
 Section 40 prohibits the use of physical force against consumers; coercion, undue influence; pressure,
duress or harassment; unfair tactics for the marketing and supply of goods or services, negotiations,
conclusion, execution or enforcement of an agreement for the supply of goods/services; demand for or
collection of payment for goods/services by a consumer or recovery of goods from a consumer.
Section 41: False, misleading or deceptive representations
 Suppliers are not allowed to directly or indirectly express or imply a false, misleading or deceptive
representations concerning a material fact to a consumer;
 Suppliers are not allowed to use exaggeration, innuendo or ambiguity as to a material fact; or
 Failure to correct an apparent misapprehension on the part of a consumer, amounting to a false,
misleading or deceptive representation.

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6. RIGHT TO FAIR AND HONEST DEALING

Section 44: Consumer’s right to assume that the supplier is entitled to sell goods
 The consumer also has a right to assume that between a supplier and a consumer, the supplier
is fully liable for any charge pertaining to the goods in favour of third parties, e.g. outstanding
debt on a car.
 A consumer also has the right to assume that the supplier guarantees that he will have and can
enjoy the quiet possession of the goods.
 Infringe a right or claim of a 3rd party? Supplier is liable to the 3rd party for the infringement.
Section 47: Over-selling and over-booking
 Supplier cannot accept payment for goods or services that he has no reasonable intention to
supply or if he supplies goods or services that are materially different from the goods or
services irow payment was accepted.

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7. RIGHT TO FAIR, JUST AND REASONABLE TERMS AND
CONDITIONS
Section 48: Unfair, unreasonable or unjust contract terms
 A supplier must not offer to supply or enter into an agreement to supply any goods/services at a
price that is unfair, unreasonable or unjust; or on terms that are unfair, unreasonable and unjust.
 “Black list” of unfair, unjust or unreasonable transaction, agreements, terms or conditions or
notices if:
a) excessively one-sided in favour of any person other than the consumer;
b) terms of the agreement are disadvantageous to the consumer
c) consumer relied upon a false, misleading or deceptive representation; or statement of opinion
provided by or on behalf of the supplier to the detriment of the consumer;
d) transaction or agreement was subject to a term or condition that is unfair, unreasonable, unjust

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7. RIGHT TO FAIR, JUST AND REASONABLE TERMS AND
CONDITIONS
Section 49: Notice required for certain terms and conditions
 The consumer’s attention must be drawn to those terms and conditions in any way that appears
to:
a) limit the risk or liability of the supplier or any other person;
b) constitute an assumption of risk or liability by the consumer;
c) impose an obligation on the consumer to compensate the supplier or any other person for any
cause;
d) be an acknowledgment of any fact by the consumer.

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 H) ‘I hereby authorize the repair work to be done along with the necessary material, and hereby
grant you and/or your employees permission to operate the car or truck herein described on
streets, highways or elsewhere for the purpose of testing and/or inspection. An express
mechanic’s lien is hereby acknowledged on this car or truck to secure the amount of any
charges for work not covered by BMW’s warranty.’

_____________________________________________
‘NOT RESPONSIBLE FOR LOSS OR DAMAGE TO CARS OR ARTICLES LEFT IN CARS IN CASE OF FIRE, THEFT OR
ANY OTHER CAUSE BEYOND OUR CONTROL.’

‘I/we acknowledge that MERCURIUS shall not be liable in any way whatsoever or be responsible for any loss or damages sustained from fire and/or burglary and/or
unlawful acts (including gross negligence) of their representatives, agents or employees.’
7. RIGHT TO FAIR, JUST AND REASONABLE TERMS AND
CONDITIONS
Section 51: Prohibited transactions, agreements, terms or conditions
 Are contrary to this Act;
 Mislead or deceive consumers;
 Subject the consumers to fraudulent conduct;
 Directly or indirectly deprives consumers of rights in terms of this Act;
 Avoid suppliers’ obligations or duties in terms of this Act.
ARE VOID TO THE EXTENT IT CONTRAVENES THE CPA.

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8. RIGHT TO FAIR VALUE, GOOD QUALITY AND SAFETY

Section 54: Right to demand quality service and goods

 A consumer has a right to timely performance and completion of those services, including timely
notice of any unavoidable delay in the performance of the services; and
 Services are performed in a manner and quality that persons are entitled to expect.
 Remedies available to consumer? Refund
Section 55: Right to safe, good quality goods
 Those are goods that are reasonably suited for the purposes for which they are generally
intended; are of good quality, in good working order and free of any defects, will be useable and
durable for a reasonable period of time and comply with any applicable standards set out under
the Standards Act of 1993.

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8. RIGHT TO FAIR VALUE, GOOD QUALITY AND SAFETY

Section 56: Implied warranty of quality

 Implied warranty that the goods comply with the requirements and standards contemplated in
section 55.
 Consumer has 6 months to return goods to supplier if they fail to meet their requirement.
 Consumer then has the following options:
 Direct supplier to either repair or replace the failed, unsafe or defective goods; or
 Refund the consumer.
Section 57: Warranty on repaired goods
 Valid for 3 months from date of installation or longer.
 Void? Goods are misused/abused

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8. RIGHT TO FAIR VALUE, GOOD QUALITY AND SAFETY
Section 58: Warning concerning fact and nature of risks
 Hazardous and unsafe goods – display a notice.
Section 60: Safety monitoring and recall
 National Consumer Commission must promote industry-wide codes of practice to sustain systems to
receive notice of product failures, monitor the sources of such information, carry out investigations, notify
consumers of risks and recall goods.
Section 61: Liability for damage caused by goods
 Section 61 provides that the producer or importer, distributor or retailer of goods is jointly and severally
liable for harm caused because of the supply of unsafe goods; a product failure, defect or hazard in goods;
or insufficient instructions or warnings to the consumer pertaining to any hazard, arising from or associated
with the goods.

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SUPPLIER’S ACCOUNTABILITY TO CONSUMERS

Lay-bys
 An agreement in which the supplier agrees to sell goods to a consumer, accept the purchase price in
periodic instalments, and retain the goods until the full price has been paid.
Prepaid certificates
 Similar to vouchers and credits: loaded with an amount for future use
Prepaid services and access to service facilities
 NOT prepaid voucher/certificate
 Periodic membership fees for services to be provided more than 25 days after payment
Supplier to hold and account for consumer’s property
 When a supplier is in possession of any prepayment, deposit, membership fee, or other money or property
belonging to the consumer, the supplier must not treat that property as his belonging.
 Exercise reasonable care, diligence and skill.

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CONSUMER PROTECTION INSTITUTIONS AND ENFORCEMENT

The National Consumer Commission(regulator)

 Jurisdiction throughout RSA
 Several enforcement functions (promotes compliance with CPA)
 Dispute resolution
 Handling consumer complaints
 Monitors the consumer market, investigations, issuing and enforcement of compliance notices
The National Consumer Tribunal
 Hears complaints relating the CPA and NCA
 Juristic person with jurisdiction throughout RSA
 Impose penalties
 Failure to comply with an order of the NCT is an offence: fine or imprisonment of 10 years or both

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