Consumer Protection with a tech law spin. What do the CPA, NCA and ECT say about consumer's rights in South Africa.

1. REINFORCING CONSUMER RIGHTS:
RETURN, REPAIR, OR REFUND?
The concurrency of the CPA and the NCA
DENISE FOUCHE
ENDCODER/ ENDCODE.ORG

2. CONTEXT:
South African Consumer Protection law
The Right to Return, Repair or Refund
The NCA and these rights
Technology challenges to consumer rights
Brand risk – staying true to the promise
Recommendations

3. SA Consumer Protection law
2002
EC
T
2005
(2007)
2008
1985 1996
(2011) 2013
UNGCP NCA CPA POPI
CONSTITUTIO
N

4. Return, Repair, or Refund
• CPA: Right to Return S20
• Right to return if defective within 6 months of
purchase date.
• Consumer chooses remedy-repair, refund or
replacement.
• Service provider may not insist on repairing but
entitled to examine or send it away to be
assessed but not to be assessed and then simply
repaired without consumer agreement to that
repair.
• In cases of direct marketing 5 days to
automatically cancel and claim a refund.

5. Return, Repair, or Refund
• No general right of return in terms of SA law
• CPA: 4 instances when one can return goods
1. Direct marketing cooling-off period s16
• 5 days
2. Goods which have not been seen before purchase s20 with s19
• Upon delivery
3. Good do not meet particular purpose s55(3)
• 10 days
4. Implied warranty of quality s56
• Up to 6 months
• ECT: consumer provisions trumps CPA for online purchases
• 1-3 above do not apply
• General right to return (cooling off period)
• 7 days

6. Return, Repair, or Refund
• CPA
• Direct Marketing – Cooling Off period s16
• s16(1) does not apply to a transaction if s44 of the ECT applies
• A consumer may rescind a transaction resulting from any direct
marketing without reason or penalty s16(3)
• by notice to the supplier in writing,
• within five business days
• A supplier must– S16(4)
• Return any payment 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 in terms of the
transaction
• Not attempt to collect any payment in terms of a rescinded
transaction

7. Return, Repair, or Refund
• CPA
• Consumer’s rights with respect to delivery of goods or
supply of service s19
• s19 does not apply to a transaction if s46 of the ECT applies
• S19(2)(a) the supplier is responsible to deliver the goods or perform the
services–
• on the agreed date and time or within a reasonable time after concluding the
transaction or agreement
• at agreed place of delivery
• at cost of supplier
• The goods remain at the supplier’s risk until the consumer has
accepted delivery
• Allow consumer reasonable opportunity to examine the goods to
ascertain consumer is satisfied goods are as contemplated in the
agreement s19(5)

8. Return, Repair, or Refund
• CPA
• Consumer’s rights with respect to delivery of goods or supply
Location / date /
time other than
as agreed
Accept the
delivery
Require at
agreed location
/ date / time
Cancel without
penalty
Larger quantity of
goods
Reject all
Accept agreed,
treat excess as
per s21
Mixed goods
Accept agreed
upon goods
Reject all
of service s19

9. Return, Repair, or Refund
CPA
• Unsolicited goods or services s21
Supplier informs
consumer goods were
delivered in error within
10 days
Becomes unsolicited if
supplier fails to recover
them within 20 business
days after informing
Clearly addresses to
another person
Becomes unsolicited only if
recipient informs supplier
and not recovered within
the following 20 business
days.
• Must not frustrate recovery attempts
• Not liable for loss or damage during time
in person’s possession or control
• If a person is in possession of unsolicited
goods, person may retain the goods
/return at supplier’s expense
• Supplier liable to any other person in
respect of any right or valid claim relating
to such goods.
• Person has no obligation to pay for unsolicited goods
or services
• If consumer has made any payment relating to
unsolicited goods or services, consumer is entitled to
recover that amount with interest

10. Return, Repair, or Refund
• S54 Consumer’s rights to demand quality service
• 54(2) If supplier fails to perform a service to the standards contemplated in subsection (1) the
consumer may require the supplier to either remedy any defect or refund a reasonable portion
of price paid for services performed and goods supplied, having regard to the extent of the
failure.
• S55 Consumer’s rights to safe, good quality goods
• Right to receive goods:
• Reasonably suited for purpose for which intended
• Good quality
• Free of any defects
• S56 Implied warranty of quality
• Within 6 months after the delivery of any goods, consumer may return the goods to the
supplier without penalty and at supplier’s risk and expense if goods fail to satisfy requirements
and standards contemplated in s55 and supplier must at direction of consumer either repair or
replace the failed, unsafe or defective goods; or refund the consumer the price paid
• S56 Implied warranty of quality
• Warranty on repaired goods for a period of three months

11. Return, Repair, or Refund
Supplier unable to deliver goods in
respect of lay-by and consumer has paid
full price
consumer option: supply
equivalent of goods
refund the consumer money paid
with interest if inability to supply is
due to circumstances beyond
supplier control
double the amount paid as
compensation for breach of
contract
• Lay-bys s62(2)(b)
• Pre-paid service (s64 (3)(b))
• If a supplier intends to close a facility to which the supplier has committed to provide future
access in terms of an agreement with a consumer to provide any service without making
available a reasonably alternative facility, supplier must no later than five business days after
closing the facility refund the balance of any money belonging to the consumer

12. Return, Repair, or Refund
• NCA:
Designed to protect consumer in the credit market and make
credit and banking services more accessible.
• Lower income earners with limited access to credit channels
• Complex credit agreements rendered many consumers vulnerable to credit
providers.
• Regulate consumer credit and credit marketing practices
• Promote responsible credit granting and use
• Prohibit reckless credit granting
• Regulate credit information
• Established recourse for unfair credit practices.

13. Return, Repair, or Refund
• NCA & CPA:
• CPA does not apply where transaction constitutes a credit
agreement under the NCA S2(d)
• Goods and services that are the subject of the credit agreement
are not excluded from the CPA ambit.
• A credit provider sells a product to a consumer on credit, the credit
agreement must be drafted in terms of the NCA.
• Consumer will be afforded CPA protection regarding the product,
such as the right to return faulty goods.
• Inconsistency between CPA and other law, must be interpreted
concurrently. S9
• Act thus must be applied concurrently with the NCA. If not
possible, Act most beneficial to consumer will prevail.

14. Return, Repair, or Refund
• NCA & CPA:
• If credit provider sells a product under a credit agreement, credit
agreement must comply with NCA and CPA.
• Drafted in plain understandable language
• Not contain prohibited contract terms and conditions
• Consumer not be required to waive any rights
• CPA provisions regarding safety monitoring and recall and liability for
damages caused by goods apply to all transactions even those exempted
from CPA application.
• NCA regulates process, content, formalities, rights and obligations related
to credit agreements; CPA regulates rights of consumers regarding
standard and quality of goods and services supplied.
• Two Acts must be read together.
• When a credit provider sells a product to a consumer on credit, the credit
agreement must be drafted in terms of the NCA

15. Return, Repair, or Refund
• NCA: Simplifying credit agreements and information
disclosure affects:
• CREDIT PROVIDERS:
• Banks
• Microlenders
• Retailers
• CONSUMERS:
• Natural persons
• Juristic persons (asset value/annual turnover equals/exceeds R1million threshold)
• OTHERS:
• Debt counsellors
• Credit bureaux

16. Return, Repair, or Refund
• NCA
• CONSUMER RIGHTS:
Apply for credit
Protected against
discrimination in granting
of credit
Informed by credit not
granted
Receive free copy of credit
agreement
Credit agreement in plain
language
Personal and financial info
treated confidentially
Understand all fees, costs,
interest rates, total
instalment and any other
details
Say no to increases on
credit limit
To decide whether you
want to be informed
about products or services
via telephone, sms, mail or
email campaigns
To apply for debt
counselling

17. Return, Repair, or Refund
• NCA
• MARKETING TO CONSUMERS:
Restricts and
outlaws certain
practices of loan
canvassing
Automatic credit
limit increases and
negative option
marketing
Provides for clear
and understandable
marketing
communications
Consumers must
receive detailed
quote valid for 5
days
Caps interest rates
Caps maximum
amount a credit
provider can charge
for other fees

18. Return, Repair, or Refund
• NCA
• MARKETING TO CONSUMERS: specific provisions
• Early settlement of credit agreements
• Consumer may terminate the credit agreement at any time by paying the settlement
amount. s122
• Consumer entitled to cancel a credit agreement at any time with or without prior
notice to credit provider. s125

19. Tech challenges to consumer rights
• Internet: applicable law
• Big data: privacy violations
• Growing power imbalance: private sector has more information
on consumers’ spending habits and credit histories than
consumers themselves
• Online Competitions
• Electronic commerce: understanding terms, conditions and costs related to online
transactions; delivery; payment
“Online finger-wagging, lawsuits, disgruntled customers -- they're the
unfortunate byproducts of what many people perceive to be big data abuses.”
According to a September 2013 study from data privacy management company Truste, 1 of
3 Internet users say they have stopped using a company's website or have stopped doing
business with a company altogether because of privacy concerns.

20. Tech challenges to consumer rights
• European Commission Directive on Consumer Rights:
to protect consumers purchasing goods online
• Ban on “cost-traps”. Online buyers to confirm understanding of price to be paid
• Returning goods: reimbursement for goods not matching expectations. Extension from 7 to
14 calendar days under which consumers can withdraw from a sales contract.
• Transparency: traders obliged to disclose total cost of product or service and any extra fees;
extra charges for paying by credit card will not be allowed; bans pre-ticked boxes on
additional services
• Online search: increasing number of ads and paid linkes in search result pages. More
complicated to access best options and most competitive prices as Google drives viewers to
sponsored services.
“The greatest concern of respondents is that, returning a product
they did not like and getting reimbursed, is not easy”.
Civic Consulting, 2011 poll of European online shoppers

21. CPA Enforcement issues
• Weak enforcement mechanisms
• Consumer awareness is low
• National Consumer Tribunal: administrative penalties. Enforcement through
compliance notices
• Safety monitoring and recall (s60). The National Consumer Commission must
promote systems to receive notice of the return of any goods because of a failure,
defect or hazard
“Complain, complain, complain - I can't say it enough - complain.
Take advantage of the commission because at the end of the day, you can have the best
laws in the world, you can have the most well equipped commission but if you don't tell us
what the problems are - we have no way of knowing.”
National Consumer Commissioner Mamodupi Mohlala to the South African public

22. Avoiding brand risk
• South Africans posted more than
5 million tweets* during Q4
2011
• Next nearest was Kenya with
2.47 million tweets
• Nigeria was the third most-active
country with 1.65 million
tweets
South Africa has the most active Twitter population in Africa
* Survey analysing 11.5m geo-located tweets across Africa. Source: PC Mag (2012)
http://www.slideshare.net/OnDevice/south-africa-mobile-consumer-trends

23. Avoiding
brand risk
• Social media provides a
platform for happy and
disgruntled customers
• An unmediated channel
for commenting on brand
experiences
• Compliance with
consumer legislation as a
barrier to the channel

24. Recommendations
Create campaigns with the consumer in mind:
• Product and/or services promises are achievable
Ensure Refund and Returns policies are in place and compliant:
• Training:
• CPA
• Refund and Returns policies
• Enforcement
• Outsourcing of services to digital marketing specialists: governance of outsourcing
agreement
Website disclosures:
• Your company: kind of business; location; contact details
• The products and services: exactly what is being sold, at what cost
• The Sale: additional costs relating to sale; warranties or guarantees; safe payment
options; estimated delivery date for the order
• Consumer Protections: privacy policy; policies on unsolicited email; complaints
procedures; return, refund or repair policies.

25. Recommendations
Standard Business terms and conditions:
• Review in terms of consumer legislation
Marketing practices and methods:
• Review in terms of consumer legislation
Consumer law impact on business:
• Complianece framework and rollout of compliance programmes

26. Case study
• Standard Bank of South Africa Ltd v Dlamini (2877/2011) [2012] ZAKZDHC 64;
2013 (1) SA 219 (KZD) 23 October 2012
Case law backing the consumer’s right to plain language in terms of the NCA and the
CPA

27. Denise Fouche
denise.fouche@endcode.org
endcode.org
THANX, QUESTIONS?

28. References
• http://www.euractiv.com/sections/consumer-choice-internet/eu-bets-consumer-rights-boost-e-
commerce-301370
• http://www.computerworld.com/article/2485493/enterprise-applications-big-data-blues-the-dangers-
of-data-mining.html