The Act brings about several fundamental changes to the existing law, which will forever alter the relationship between businesses and their customers, or consumers as the Act calls them. Consumers will be to a greater extent protected from exploitation and harm.
Consumers will be able to sue suppliers and manufacturers of goods for damages or injuries suffered by them as a result of using goods, irrespective of whether or not there was any negligence on the part of the supplier or manufacturer. The consumer who suffers the damages or injury need not even be the person who entered into the original transaction with the seller. It is now much easier for a consumer to get out of an agreement entered into with a supplier and to avoid being forced into a transaction or an unwanted extension of an agreement.
Emphasis is placed in the Act on ensuring that consumers are enabled to make informed choices through being provided by suppliers with all the necessary information in plain and understandable language.
The Act seeks to consolidate consumer law in South Africa. Although it goes some way in doing so, having replaces five pre-existing acts in their entirety and replaced provisions of a sixth act, it has had to weave its way around various other pieces of still applicable legislature. It is thus not the overachieving framework for the consumer protection that it was originally intended to be.
Scope of the Act
The Act regulates the activities of suppliers and creates rights for consumers. Most entities supplying goods and services in South Africa and the transactions that they enter into with consumers will fall within the Act. The definition of transaction given in the Act has three components:
1. The actual supply of goods;
2. The agreement between the partied for the supply of the goods and services;
3. Performance of the services.
Also included in the definition of a transaction is the supply of goods or services in the ordinary course of business to any of its members by a club, trade union, association, society or other voluntary association sharing a common purpose. This is true even if nothing is charged for the service.
Any business in contravention of the Act faces a fine of R1 million or 10% of their annual turnover – whichever is greatest. Whether you are a the owner or manager of a business, franchise or non-profit organisation, you may have to adjust your goods, services and marketing efforts to minimise the risk that you carry when dealing with consumers.
