The Consumer Protection Act was gazetted and brought into law in December 2019 but almost a year later there has been little movement or clarity on the elements of the Act. Granted there have been more pressing concerns in the year 2020. What we can do is work on the clarity aspect and help you as business owners understand the consumer protection act better and understand how it impacts business practices.
I have selected highlights from the act that stood out to me as important to understand. We will go through these in the order they appear in the act with the section number quoted for further reading and reference purposes.
Consumer Protection Commission s4
The act mandates the setting up of a commission that will deal with matters of the act. The functions of the commission include protecting consumers from unconscionable, unreasonable, unjust or otherwise improper trade practices. The commission will also receive complaints, investigate and deliberate on matters where brought up. The functions also include the role of monitoring the market. You can pick up hints of ideas that have been tried before with no success. The setting up and operation of this commission is key to the effectiveness of the Act.
Education and awareness s9
After establishing the commission the Act goes into rights of consumers. Section 9 deals with consumers rights to education and awareness about any product hazards. The act stresses on appropriately labelling goods and also informing customers on how to get redress if they have a problem.
Fair value, good quality and safety s10
Consumers have a right to fair value, good quality and safety in all goods. The act states that it is irrelevant if a defect is latent (hidden) or patent (apparent) or even if the consumer could’ve detected it before delivery. The exception is where a defect was made clear to the consumer or accepted in writing. This right applies regardless of whether the supplier is a manufacturer, importer, distributor or retailer.
Implied warranty s11
Section 11 states that all goods will carry an implied warranty that applies for 6 months. One or all of the following are liable; producer, importer, distributor or retailer. This warranty applies to the condition of the goods for purpose. Once the item is presented the supplier can repair, replace or refund. If repair is done and the item fails to meet purpose within 3 months supplier must replace or refund.
Warning concerning risks s13
All suppliers must provide sufficient warning about risks of their products that may result in injury or death. This must be clearly communicated.
Liability for damage s16
Where a product causes damage the producer, brand, importer, distributor or retailer can all be held liable for such damage. Where the damage was because of the product being unsafe, defective or instructions were inadequate. Liable parties on the list must prove that they are not responsible to be exempted. To simplify this if you bought a defective product that caused damage you can seek damages from the manufacturer, distributor, importer or retailer whichever apply. So not being the manufacturer is not a defence.
Right to cancel advance booking or order s20
Consumers are entitled to cancel advance bookings if they need to. Suppliers are entitled charge a sufficient cancellation fee which is determined by looking at the specific products to be supplied and industry practice. Suppliers are not entitled to charge cancellation where a consumer has cancelled due to death or hospitalisation.
Cooling off period s25 s53 electronic
Where are consumer is contacted via direct marketing of any sort they are entitled to a cooling off period of 5 business days. Cooling off period allows a customer to rethink their decision and they can rescind the agreement no questions asked within this period. The 5 business days start from the later of agreement or delivery date. Suppliers must refund consumers within the cooling off period. Section 53 deals with the cooling off period for electronic transactions which is 7 days after the agreement or supply of goods which ever comes later. Suppliers may charge the consumer to return the goods but other than that they must refund consumers in full. This refund must be made within 14 days of cancellation.
Right to disclosure s26
While section 26 deals with many matters on disclosure we can easily relate its stance on pricing. Prices must be displayed and legible. Suppliers cannot charge prices that are higher than displayed prices. This is an area that needed clearing as the law of invitation to treat complicated things here. If a supplier displays more than one price, the lowest price on display shall be deemed the applicable price.
Noticeable and legible information s30
Section 30 mandates that information should be displayed in a noticeable and legible manner. All product information must be displayed in plain and understandable language. This brings up an interesting question of the language to be used.
Product labelling and descriptions s31
Section 31 adds more weight to section 30 by going further into issues of product labelling and descriptions. This is a wide ranging section and covers issues such as product nature, name, number,, quantity, quality, purity, process, origin, measure and weight amongst others. The section clearly points to issues of misleading descriptions or alteration of descriptions with the intention of misleading.
Right to return goods s34
Consumers have a right to return goods to suppliers that is enshrined in section 34. Consumers can return goods during a cooling off period as highlighted earlier. Where the consumer did not get a chance to examine the goods before, where goods are unsolicited, where goods are found unsuitable within 7 days the consumer can return goods. There are exceptions to this rule including where it poses a health risk or the items have been altered. Suppliers must refund returns but may deduct fees incurred to bring goods back to saleable condition.
Unconscionable Conduct s35
Unconscionable conduct is a very important area of the Act as it goes to define unconscionable circumstances for agreements. This is where a supplier uses physical force, coercion, pressure, undue influence, harassment or unfair tactics to gain agreement. Where supplier conduct is deemed unconscionable they are liable to a level 5 fine or 6 months in prison.
Offences and penalties s78-81
Offences and corresponding penalties are covered in detail in sections 78 to 81. Not complying with Consumer Protection Commission or presenting false information will result in a level 14 fine or 2 years imprisonment. The commission is also empowered to levy administrative fines which can range up to 2.5% of the previous years profit. Consideration will be given to the circumstances.
Vicarious liability s81
Section 81 deals with issues of vicarious liability. Where an employee causes damage or injury while carrying out their duties the employer stands liable for their actions.
You can download the Consumer Protection Act to gain more detail on the matters briefly discussed here.