New law gives consumers more power

31 March 2011

If you buy a kettle next month and it breaks after six months, you will have the right to demand your money back. This is just one the new regulations contained in the new Consumer Protection Act, which comes into effect on 1 April.

Western Cape economic development and tourism MEC Alan Winde issued a statement on Monday morning explaining the implications of the new law, saying it would “radically overhaul the manner and form in which business is conducted”.

For example, the law ensures an implied six-month guarantee in any goods purchased, regardless of the guarantees offered by the specific supplier.

“A practical example would be the following: You purchase a kettle for use in your home and the kettle can no longer boil water. The kettle is therefore no longer suitable for the purpose for which it was bought.

“If this has happened within six months of you taking delivery of the kettle, you will now be within your rights to take the kettle back to the store and request a refund, repair or replacement,” Winde’s office said in the statement.

“Remember, the six-month warranty mentioned above is in addition to any other warranty provided by the supplier. So, if a product has a 12-month warranty provided by the supplier, then this 12-month warranty is still valid.”

Opting out of direct marketing

The law also protects consumers against direct marketing onslaughts.

It provides for an “exclusion register” which will make it illegal for sales people to communicate electronically with a consumer whose name has been listed on this register.

“This will greatly assist consumers, as they will be able to prohibit unwanted electronic communication.”

In addition, consumers contacted by direct marketers will be offered a five-day cooling-off period after entering a sales agreement.

“This will ensure that a consumer will now have the right to ‘change his/her mind’ about a direct marketing purchase within five business days,” the statement read.

“This is a real improvement, as often consumers have signed up for a service or product without having thought about the purchase carefully and the possible effects it would have on their budget and other financial commitments.

“In some cases it has been found that consumers are subjected to pressure to the extent that they enter into an agreement merely to end a sales pitch.”

Cancellation of reservations, orders

Another example of how the law would help consumers is the regulation around the cancellation of an advance reservation, booking or order.

“A consumer reserves accommodation at a hotel for two nights. On the day of the reservation, the consumer changes his or her mind as the hotel around the corner is offering a cheaper rate. The hotel then charges a 100% cancellation fee and the consumer is unhappy with the fee charged.

“In terms of the Act, a consumer does have the right to cancel a reservation. However, the business will similarly have the right to charge a cancellation fee. The Act, however, introduces the concept of a ‘reasonable cancellation fee’.”

The “reasonable fee” will be decided on based on the nature of the goods or device, the length of notice of cancellation, the reasonable potential of finding an alternative consumer and the general practice of the industry.

“As such, what constitutes a reasonable cancellation fee will depend on the merits of each case, and the percentage of a cancellation fee that will be levied must be carefully considered by a business.

“One of the important elements introduced by the Act is the acknowledgement of the rights that all of us as consumers will now be able to enjoy. Previous legislation ignored these principles, and for the first time we have statutory recognition of our right to confidentiality, information, disclosure, fairness, transparency, choice, safety and redress.

“From 1 April onwards, it will not only be disrespectful, but illegal, to ignore consumers’ rights,” said Winde.