04 Oct 2010

Consumer Protection Delayed Until 31 March 2011

Consumer Protection Act (CPA) No Comments

Trishika Veeragudu (Attorney) @ Lucid Living

The substantive provisions of the Consumer Protection Act, originally scheduled to come into force and effect in October 2010 has been deferred to 31 March 2011.

However such deference is does not come as a surprise owing to the fact that the draft regulations to the Act are only likely to be published for comment beginning of October.

Until finalisation of the regulations, it is somewhat vague for suppliers to know exactly what to do in order to comply with the act and prepare for its implemetation. Once the draft regulations are published, we expect several comments given the number of stakeholders significantly affected by the far reaching provisions of this Act.  The comment process is therefore likely to take some time to be finalised

The Minister has advised that additional time is required for adequate preparation of the administrative systems necessary to ensure the efficient and effective implementation of the Act, like the establishment of the Consumer Commission.

So what does this delay mean for consumers?

It will be wearisome on consumers who are looking forward to the many benefits that will result from the implementation of the Consumer Protection Act. Such benefits include improved service levels, fair dealing, the right to cancel fixed term agreements, protection for franchisee and freedom from unwanted marketing. However such delay should not be looked on negatively as it will ensure that all process and procedures are fully in place so that consumers can enforce their rights once the act comes into effect and not be frustrated by inadequate and uncertain requirements.

So what does this delay mean for businesses?

The delay may be positive for suppliers as well.  It means that they have more time to

ensure that their houses are in order. The Consumer Protection Act has far reaching consequences and will affect all areas of business and all suppliers (including importers, distributors and retailers) in South Africa.   Advertising, marketing contracts, standard terms and conditions, pricing policies, labelling, information retention, promotional competitions and franchises are just some of the areas that are drastically affected by the provisions of the Consumer Protection Act.

Suppliers, no matter the size now have the opportunity to review all their policies and contracts to make sure that they are in line with the requirements of the Consumer Protection Act so that they are not exposed to non-compliance. We are already seeing various companies reviewing their policies.  More and more companies are beginning to require warranties from their suppliers that their products and services comply with the terms of the Consumer Protection Act in order to limit their risks. Companies should make the most of this time to ensure that they are have policies in place so that they are protected and comply with the Act.

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