Consumer Protection Act

• The law recognises that there is a distinction between commercial contracts and contracts between suppliers and consumers
• The CPA came fully into force

  31 March 2011
• Parts of the CPA had already come into force

  24 April 2010
• Components of legislation


  • Preamble
  • Definitions
  • Interpretations
  • Conflict of legal provision
• Basic Principles of Interpretation of Statute

  • Ordinary words given their ordinary meaning
  • Original language takes precedence
  • Words/phrases used throughout the legislation given the same meaning
  • Act does not bind state unless specified
  • Not retrospective
  • Law not intended to be unreasonable, create injustice
  • Purpose must be considered
• Purposes of the Consumer Protection Act (Section 3(1))

  • Establishing a legal framework for the achievement and maintenance of a consumer market that is fair, accessible, efficient, sustainable and responsible for the benefit of consumers
  • Reducing and ameliorating the disadvantages experienced by certain consumers
  • Promoting fair business practices
  • Protecting consumers from unconscionable, unfair, or improper trade practices and deceptive, misleading, unfair or fraudulent conduct
  • Improving consumer awareness and access to information and encouraging responsible and informed consumer choice and behaviour
  • Developing a culture of consumer responsibility
  • Providing an accessible, consistent and efficient system of redress for consumers
• The CPA must be interpreted in a manner that gives effect to the purposes set out in Section 3
• When faced with more than one potential meaning, a court or tribunal must choose the meaning that best improves the realisation and enjoyment of consumer rights, and particularly the rights of vulnerable consumers contemplated in section 3(1)(b)

  
• Factors that may be considered in interpretation

  • Appropriate foreign and international law
  • Appropriate international conventions, declarations or protocols relating to consumer protection
  • Any decision of a consumer court, ombud or arbitrator in terms of this Act, to the extent that such a decision has not been set aside, reversed or overruled by the High Court, the Supreme Court of Appeal or the Constitutional Court

  
• The CPA applies to every 'transaction' for the 'supply' of 'goods' or 'services' that occurs within the Republic unless the transaction is exempted by section 5(2), (3), and (4)
• The CPA also applies to the promotion of any goods or services within the Republic that might result in a transaction covered by the CPA
• Definition of 'goods'


  • Anything marketed for human consumption
  • Any tangible object not otherwise contemplated in paragraph (a), including any medium on which anything is or may be written or encoded
  • Any literature, music, photograph, motion picture, game, information, data, software, code or other intangible product written or encoded on any medium, or a license to use any such intangible product
  • A legal interest in land or any other immovable property, other than an interest that falls within the definition of 'service'
  • Gas, water and electricity
• Where the CPA and other consumer law are in conflict, the legislation which provides the best protection to the consumer will apply

  
• CPA vs POPI


  Opt out vs Opt in
• CPA vs NCA


  Lease of movable goods not covered under CPA but included in NCA
• The more specific legislation takes precedence
• Grounds on which suppliers may not unfairly discriminate against consumers


  • Any of the grounds listed in section 9 of the Constitution or in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act
  • Age (minors and older than 60)
  • Gender (access to facility)
• Consumer rights under the CPA

  • Right to equal access to the consumer market
  • Right to privacy: 'direct marketing'
  • Right to choose
  • Right to disclosure and information
  • Right to fair and responsible marketing
  • Right to fair and honest dealing
  • Right to fair, just and reasonable terms and conditions
  • Right to fair value, good quality and safety
• Direct marketing


  Identical meaning under POPI and CPA, but CPA covers both electronic and non-electronic, while POPI only covers electronic
• CPA has a threshold for juristic person for direct marketing
• CPA has a cooling off period of 5 business days for direct marketing
• Need to show causation (link between direct marketing and consumer behaviour) under CPA

  
• Bundling

  The practice of forcing a consumer to purchase two products together, to enter into another agreement with the supplier, or to buy goods or services from a designated third party
• Conditions under which a supplier may bundle goods

  • Can show that the convenience to the consumer in having those goods or services bundled outweighs that the limitation of the consumer's right to the choice
  • Can show that the bundling of those goods or services results in economic benefit for consumers
  • Offers bundled goods or services separately and at individual prices
• Fixed-term agreements


  Agreements that must endure until a specified date or a date that can be determined from the terms of the agreement
• The CPA has changed the common-law rule on the passing of risk of destruction or deterioration of goods sold to a consumer
• In general, section 21 allows the consumer to retain unsolicited goods without any obligation to pay for them
• The CPA gives the consumer the general right to disclosure and information
• The CPA requires that all communications with the consumer, including any marketing materials, contracts, notices or other forms of disclosure, be in plain and understandable language
• Information that must be correct and accurate in marketing under the CPA

  • The nature, properties, advantages or uses of the goods or services
  • The manner or conditions on which those goods or services may be supplied
  • The price at which the goods may be supplied, or the existence of, or the relationship of the price to, any previous price or competitor's price or comparable or similar goods or services
  • The sponsoring of any event
  • Any other material aspect of the goods or services
• Types of marketing governed by the CPA

  • Bait marketing
  • Negative opinion marketing
  • Catalogue marketing
  • Trade coupons and similar promotions
  • Customer loyalty programmes
  • Promotional competitions
  • Alternative work schemes
  • Referral selling
• Prohibited conduct under the CPA

  • Unconscionable conduct - use of force
  • False, misleading and deceptive representations
  • Fraudulent schemes
  • Pyramid schemes
• Unfair terms prohibited under the CPA (Section 51)


  • Those that exclude supplier liability/risk
  • Assumption of risk by consumer
  • Terms that oblige a consumer to indemnify a supplier
  • Terms that are an acknowledgement of fact
• Supplier's accountability to consumers

  • Laybys
  • Prepaid credit/voucher (unused vouchers may only expire 3 years after issue)
  • Prepaid services
  • Deposits
• The CPA provides for two central bodies that are tasked with its enforcement: the NCC and the NCT
• Provision is also made for provincial consumer courts, some of which were already established before the promulgation of the CPA under the Consumer Affairs (Unfair Business Practices) Acts of various provinces
• Aggrieved consumer does not have the freedom to approach a court of law and must go the National Consumer Commission and National Consumer Tribunal
• This includes small claims court which far easier to access to rural allow-income earners
• These operate in tandem with industry bodies
• Consumers must exhaust the remedies set out the in legislation (section 115(2))