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13 Jun 2011

Clarifying the CPA: Your Rights (Part 2)

Consumer Protection Act (CPA) 4 Comments

Eva Smith (Attorney) @ Lucid Living

In Part 1 of this article, we looked at some general issues regarding –

  • when does the CPA apply?
  • what transactions are covered by the CPA?
  • what transactions are excluded?
  • does the CPA apply retrospectively?

In this second issue, we look at more specific issues that you many encounter on a day-to-day basis – like some of our clients.

When can I return goods?

Under the CPA you have extensive rights to return goods if you are coerced into an agreement through direct marketing, if wrong goods are delivered to you or they do not match the description of the sample you were given or if goods are defective. You are also be entitled to a warranty that says goods you buy are safe and free from defect for a period of six months after you receive them.

The CPA allows goods that are defective or not fit for purpose, to be returned to the supplier, within six months of the purchase date.

In this instance the store is compelled to take the goods back, with or without their labels and price tags  and the consumer has the power to demand a refund, replacement or repair.
And if the repaired item failed in some way within three months of being returned to the consumer, the store would be forced to either refund or replace the item.

If the goods are not defective, the supplier gets to decide whether to take them back or not, and has total discretion regarding this.  A store may take back merchandise which is not defective, but on their terms – as the act does not compel any supplier to take back non-defective goods at all.

Some may choose to refund those who return unwanted, non-defective goods, but the store may choose to issue vouchers to the value of the goods instead.

Does the CPA apply to lease agreements?

The CPA applies to all transactions (for goods and services) between a consumer (including a juristic person, subject to the monetary threshold) and a supplier, unless expressly excluded in the Act.

For the purpose of lease agreements, the following implications of the CPA are most relevant:

  • Fixed-term lease agreements cannot exceed a period of twenty-four months. Upon expiry of the twenty-four month agreement, unless a new agreement is entered into, the original agreement will continue on a month to month basis.
  • Notwithstanding the fixed term/duration of the lease agreement (assume the maximum period of twenty-four months), the tenant may terminate the agreement, at any time, subject to giving the landlord twenty (business) days notice of termination.
  • The CPA places a duty on the landlord to ensure that the tenant understands and appreciates the terms and conditions of the lease agreement. If it later transpires that the tenant did not understand and appreciate the terms of the agreement, the agreement may be canceled, without penalty or charge levied against the tenant.

If I purchase goods at an auction am I still protected under the CPA?

Properties that are sold at an auction are still sold “voetstoots” and therefore excluded from the CPA’s cooling off provisions, says Auction Alliance CEO Rael Levitt.

According to Levitt, buyers at auctions don’t have a six-month cooling off period if the seller is deemed a supplier in the normal course of business — mainly property investors and developers. “… auction buyers do not have any discretion to return goods or demand that the seller repair defects,” Levitt says.

The same applies to motor vehicles, where banks have to sell these vehicles and cannot risk consumers coming back within six months with defective, second-hand motor vehicles. Often, the very nature of a repossessed car would be that the vehicle has some sort of defect and auctions, with their “voetsoots” clauses, give the bank protection.

He adds that internet auctions also do not have cooling off periods, and are also “voetsoots”, Levitt concludes.

With the CPA and National Consumer Commission (NCC) only weeks old, there are various determinations that will have to be made on the interpretation of the Act and its applicability to various scenarios. This is one that we have raised and we eagerly await the NCC’s determination.

How does the CPA affect direct marketing?

Traditional (“above the line’) marketing is aimed at a general group of consumers – for example: an advert in a newspaper, on radio or TV; a shop window display.

In contrast, direct (“below the line”) marketing is one-on-one – for example: an email to your inbox, someone stopping you in the mall to talk about timeshare; an SMS;  a letter in your postbox.

It’s far more intrusive, and often there is quite a bit of pressure exerted on the recipient to commit to a purchase or contract. Consequently this kind of marketing is the focus of extra protection in the CPA.

Of most significance is the cooling off period. If you purchase anything or sign a contract as a result of a direct marketing offer, you have the right to cancel the transaction within five (business) days, and the supplier must refund you, without penalty or charge, within fifteen (business) days of cancelation.

The CPA also makes provision for consumers to register a pre-emptive stop all direct marketing by putting their names on a national “Do Not Contact” registry. Any supplier conducting a direct marketing campaign, must verify whether a consumer (to whom they intend marketing) has registered on the “Do Not Contact” registry– if they have the direct marketer is prohibited from marketing to that consumer.

Unfortunately the “Do Not Contact” registry has not been established as yet. So anticipate more unsolicited campaigns/spam in the interim.

How do I enforce my rights under the CPA?

There are many avenues of recourse available to consumers that have been set up, including the National Consumer Commission; the National Consumer Tribunal; the appropriate ombudsman; the alternative dispute resolution route (such as mediators and arbitrators); and a provincial consumer affairs court or criminal court.

These processes are all in place and available to the consumer and most do not require a financial outlay from the consumer.

However not all complaints you have as a consumer in terms of the CPA can be dealt with by the NCC. There are still certain issues, such as the interpretation of the act and claims in relation to harm caused by a defect or unsafe products, that will have to be addressed as at present through the court system.

4 Responses to “Clarifying the CPA: Your Rights (Part 2)”

  1. Miss Moodley says:

    Good day,
    I purchased furniture on a 24 month contract and into the 1st month another financial situation came up and i will not be able to keep the furniture, i asked for them to take it back and cancel the contract but they advised that they cannot do that, if they take it back they will need to black list me . please advise what i can do ..thank you

  2. RandolphLucid says:

    Good day

    Your situation is covered by two Acts – viz. the credit agreement is covered by the National Credit Act (NCA) and the furniture is covered by the Consumer Protection Act (CPA).

    The CPA allows you to cancel a contract, under certain circumstances, with respect to your dissatisfaction with the goods purchased – this does not appear to be the motive for cancellation in your case.

    The NCA allows for the goods, under a credit agreement, to be surrendered in circumstances where the consumer can no longer meet their payments under the credit agreement. In this instance both the credit provider and the consumer have rights and obligations to each other.
    The credit provider cannot decline to accept the goods and has to follow a pre-determined process to have the goods sold.

    With respect to the threat to have you blacklisted – that is unlawful.

    If you wish to follow this course of action, i highly recommend that you get in touch with a Lucid Living attorney – who can advise you of your rights and the process you must follow – to avaid being treated ufairly and unlawfully by the credit provider.
    Call them on 010 590 5617.

  3. C Benade says:

    Dear Sir/Madam

    I took out a contract in December 2010. At the end of February I’ve lost my job and I am unemployed since now. I’ve send e-mails to Vodacom as well as spoken to a lady from a debt company. I’m not sure how to react from here as it is nearly a year later.

    Could you please assist me?

    Kind regards
    Cobus

  4. RandolphLucid says:

    Good day

    Please see our previous comments to similar issues like yours.

    You do have rights and we can assist you to enforce them.

    Contact us on 010 590 5617.

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