On the 24th of October the Consumer Protection Act takes effect, and everyone’s waiting in anticipation and wondering who it will affect, and how. Will it breathe some life into consumer’s rights in the local market or will it fall by the wayside onto the ever increasing pile of consumer formalities?
As its name suggests, the act sets out to protect the rights of consumers. And manufacturers, suppliers and retailers should take note that ‘consumer’ is a very broad term in this case and encompasses any user, recipient or beneficiary of goods or services, even if they were not part of an agreement relating to the supply of goods.
Furthermore, the legislation dictates that formal policies and documents be written in plain, simple language to the effect that, “an ordinary consumer with average literacy skills and minimal experience as a consumer…can be expected to understand the content, significance and import of the document”. This could prove to be quite a significant ruling as organizations’ liability risk will increase significantly.
The CPA will have far reaching impact and will influence all aspects of the consumer industry. Look at a case currently taking place in the US where a public interest group is suing soft drink giant Coca Cola for making unjustifiable claims about its vitamin water. This is the kind of power that the CPA hopes to bring to local consumers.
And the cost for breaching the legislation? The penalties are harsh, and an organization which is found by the Tribunal to have contravened the Act, may face:
• An administrative fine up to 10% of annual turnover or
• An administrative fine of up to R1 Million, whichever is the greater.
Organizations have, or should have been, aware of the implementation of the CPA for the last 18 months and if they haven’t begun to assess the implications of this yet, now would be a good time to consider doing just that.
For a concise breakdown of the CPA and its implications take a look at the primary source for this article here.
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