ZIMBABWE ZIMBABWE ZIMBABWE ZIMBABWE CONSUMER PROTECTION BILL CONSUMER PROTECTION BILL CONSUMER PROTECTION BILL CONSUMER PROTECTION BILL CONSULTATIVE MEETING CONSULTATIVE MEETING CONSULTATIVE MEETING CONSULTATIVE MEETING The South The South The South The South African Experience African Experience African Experience African Experience Commissioner: Commissioner: Commissioner: Commissioner: Mr Mr Mr Ebrahim Mohamed Mr Ebrahim Mohamed Ebrahim Mohamed Ebrahim Mohamed 18 February 2015 18 February 2015 18 February 2015 18 February 2015 1
Contents Contents Contents Contents 1. Where we come from 2. Policy Review 3. Draft Policy Framework 4. Consumer Protection Act, Act 68, 2008 5. Process provided by the Act 6. Protection for consumers 7. South African approach to consumer protection 8. The National Consumer Commission of South Africa 9. Challenges 10.A need to contextualise 2
Where we come from Where we come from Where we come from Where we come from South Africa’s Apartheid past with its discriminatory laws created unacceptably high levels of poverty, illiteracy and other forms of social and economic inequality. When democracy dawned on us in 1994, the new government deemed it necessary to develop and employ innovative means to - • Fulfil the rights of historically disadvantaged person and to promote their full participation as consumers. • Protect the interests of all consumers, ensure accessible, transparent and efficient redress for consumers who are subjected to abuse or exploitation in the marketplace; and • To give effect to internationally recognised consumer rights In addition, we realised that it is desirable to promote an economic environment that supports and strengthens a culture of consumer rights and responsibilities, business innovation and enhanced performance 3
Where we come from ‘(continued) Where we come from ‘(continued) Where we come from ‘(continued) Where we come from ‘(continued) Consumer protection mechanisms prior to promulgation of the Consumer Protection Act in 2008 were outdated and needed an overhaul that would address amongst other things, discriminatory and unfair market practices, proliferation of low-quality and unsafe products, lack of awareness of consumer rights, inadequate consumer protection as well as weak enforcement capacity Furthermore, there were a number of reports which indicated weaknesses in consumer protection in the country. These included: • An International Legislative Benchmarking Study • A South African National Consumer Survey • A Review of Consumer Protection Measures in South Africa; as well as • DTI Complaints statistics 4
Policy Review (The DTI) Policy Review (The DTI) Policy Review (The DTI) Policy Review (The DTI) • The Department of Trade and Industry of South Africa conducted a study which found that consumer protection laws were fragmented, outdated and mostly incorporated into legislation that is incidental to consumer protection. As such it found that: • Laws were premised on principles that were not applicable to values of a democratic and developing society. • That the laws resulted in uneven regulation, with heavy regulation in some industries, and a reliance on self-regulation in others. • Consumers and small businesses were vulnerable & subject to widespread abuse. • There were no general rules of law relating to the consumer’s most basic rights to information, disclosure, fairness, etc • The legislative framework did not address the challenges of discriminatory and unfair market practices • Redress was limited, and enforcement systems were weak. 5
Draft Consumer Policy Framework Draft Consumer Policy Framework Draft Consumer Policy Framework Draft Consumer Policy Framework • The policy review culminated in the publication of Draft Green Paper on Consumer Policy Framework in 2004. • The research indicated, that many countries adopted a rights-based approach to consumer protection with comprehensive laws that outlined the rights and obligations of consumers upfront. • The Draft Consumer Policy Framework recommended a comprehensive Consumer protection legislation with necessary infrastructure to regulate the market for consumer goods and services. 6
The The Consumer Protection Act, Act 68 of The The Consumer Protection Act, Act 68 of Consumer Protection Act, Act 68 of 2008 Consumer Protection Act, Act 68 of 2008 2008 – 2008 – – (Purpose) – (Purpose) (Purpose) (Purpose) The main purpose of the CPA remains true to the vision set out in the policy framework which is to promote and advance the social and economic welfare of consumers in South Africa by: • Establishing a legal framework for the achievement of a consumer market that is fair, accessible, efficient, sustainable and responsible • Reducing and ameliorating any disadvantages experienced by vulnerable consumers in accessing goods or services • Promoting fair business practices & protecting consumers from improper conduct • Improving consumer awareness and encouraging choice • Promoting consumer confidence and empowerment • Providing a consistent, accessible and efficient system of consensual resolution of disputes; and • Providing for an accessible, consistent, harmonised, effective and efficient system of redress for consumers. 7
Process provided by the Act Process provided by the Act Process provided by the Act Process provided by the Act 8
Scope of the Scope of the Act Scope of the Scope of the Act Act Act • The CPA applies to all transactions in the ordinary course of business that involves the promotion of goods and services, except those exempted by the Minister • Includes franchise transactions or agreements • The CPA applies to goods or services promoted by or through the State, but not to transactions provided to the state • Business to Business transactions if the threshold requirements are met • Intended to provide a general default regime of consumer protection. • In case of a conflict between CPA and any other law protecting consumers, the laws are to be enforced concurrently, as far as possible, and beyond that, the law that provides the greater degree of protection for consumers is to prevail. 9
Protection Protection for Consumers Protection Protection for Consumers for Consumers for Consumers The CPA codifies a number of fundamental consumer rights The right to equal access to the consumer market • Expands on and is conceptually linked to both the Bill of Rights and the Promotion of Equality and Prevention of Unfair Discrimination Act, • It protects communities, districts, market segments or populations from being unfairly discriminated against with regards to access to goods or services of different quality or pricing. • General prohibition against unfair discrimination (as defined in the Constitution) when transacting. • Recognises long-standing and widely accepted commercial practices that allow differential treatment of consumers of a particular sex, age or gender if the conduct is reasonable. • The equality court has exclusive jurisdiction to adjudicate contraventions of this part 10
Protection Protection for Protection Protection for for for Consumers ‘( Consumers ‘( Consumers ‘(continued) Consumers ‘( continued) continued) continued) Right to privacy • Includes the right to accept, refuse or block any approach for the purpose of direct marketing- opt out register • Minister may prescribe certain days, dates and times during which it is prohibited to contact consumers for purposes of direct marketing. Consumer’s right to choose • Aimed at assisting consumers to select goods or services on the basis of having examined the goods and compared prices. • Suppliers are generally prohibited from bundling goods or services • Includes the right to cancel a fixed-term agreement, limits the rights of suppliers to impose cancellation charges, and sets out rules governing the expiry of such agreements. 11
Protection Protection for Protection Protection for for for Consumers ‘( Consumers ‘( Consumers ‘(continued) Consumers ‘( continued) continued) continued) Right to disclosure and information • Aims to ensure that consumers understand the terms and conditions of the transactions or agreements they enter into and are able to make informed choices about the products and services they consume compulsory to display prices; Trade descriptions must not be misleading, etc Right to fair and responsible marketing • To restrain or correct the worst abuses in the area of the marketing of goods or services the CPA introduces or re-enacts a number of provisions to address standards for fair and responsible marketing and provides a general prohibition against marketing that is misleading, fraudulent or deceptive. • Prohibits bait marketing, negative options and referral selling. 12
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