Business Environment Legislation

1. BUSINESS ENVIRONMENT LEGISLATION
TOPIC: CONSUMER PROTECTION ACT NO.68 OF APRIL 2008.
PRESENTED BY:
MSOMI NH (DUT STUDENT)

2. INTRODUCTION
The consumer protection act was promulgated to redress economic
inequalities of the past.
 It is the practice that safeguard buyers of goods and service and the public
against unfair practice in the marketplace, this law intends to prevent
business from engaging in fraud or unfair practices that exploit customers.
The act impact on almost every business sector in South Africa.
It promotes the social and economic welfare of consumers in S.A.

3. PURPOSE OF THE CONSUMER PROTECTION
ACT
Establish national standard to protect consumers and establish a national
consumer commission (NCC).
Promote the rights and full participation of historically disadvantage
individuals as consumers.
Empowers consumers to take legal action if their rights are violated.
Protect consumers against contract that include unfair terms which limit
the liability of suppliers.
Protect consumers against unscrupulous business practice e.g. fly-by-night
franchisors.

4. PURPOSE OF THE CONSUMER PROTECTION
ACT
Promote consistent laws relating to consumer transactions and agreement.
Encourages consumer safety by protecting them from hazardous product
and services.
Encourage responsible consumer behavior and provide guidelines for
better consumer information to ensure consumers makes informed
decision.

5. CONSUMER RIGHTS
Right to choose.
Right to privacy and confidentiality.
Right to fair and honesty dealings.
Right to information about products and agreements.
Right to fair and responsible marketing or promotions.
Right to fair value, good quality and safety.

6. CONSUMER RIGHTS
Right to fair reasonable terms and conditions.
Right to equality in the consumer marketplace.

7. IMPACT OF CPA ON BUSINESS:
POSITIVE IMPACT(ADVANTAGES)
Enable businesses to resolve disputes fairly through the National
Consumer Commission and consumer court or Industrial ombudsmen.
Businesses may build a good image when they ensure that consumer rights
are not violated.
Business are less likely to have court cases against them for consumer
right violations, they can even gain consumer loyalty through complying
with CPA.

8. IMPACT OF CPA ON BUSINESS:
NEGATIVE IMPACT (DISADVANTAGES)
Penalties for non-compliance may be very high.
Businesses must replace or repair faulty items, refund money if necessary.
Confidential business information may become available to competitors as
they must disclose more information about their product and processes.
Consumers can take advantage of business and return goods when it not
necessary to do so.
Processes and procedures required by CPA can be expensive and time
consuming.

9. IMPACT OF CPA ON BUSINESS:
NEGATIVE IMPACT (DISADVANTAGES)
Business may need insurance against claims from consumers, provisions
in the act increase the risks for unforeseen claims and lawsuits which also
increase the risk for insurance companies in protecting businesses.
Many business documents need to be simplified at extra cost as consumers
have right to receive contract in simple understandable language.
Staff need to be trained; legal expertise need to be consulted which can
increase costs.

10. PRACTICAL WAYS TO COMPLY WITH THE
CPA
Disclose prices of all products on sale.
Comply with legal requirements of promotional competitions
Ensure that goods and services offered are standardized of the same
quality.
Display the name of the business on all business documents e.g.
Letterheads, invoice, contracts.

11. PRACTICAL WAYS TO COMPLY WITH THE
CPA
Comply with requirements regarding the display of information on labels,
packaging e.g. smoking Is hazardous for pregnant woman.
Implement measures that will facilitate complaints, e.g. suggestion boxes.

12. CONCLUSION
THE CPA FORCES BOTH BUSINESSES AND CONSUMERS TO ACT
RESPONSIBLY WHEN DOING BUSINESS, AND NON-COMPLIANCE
BY BUSINESS MAY RESULT IN SERIOUS PENALITIES AND LEGAL
ACTION.