This is part 2 of the series on the new consumer protection act and deals primarily with sections 20 to 47.
The CPA also deals with unsolicited goods and services (caution: any excess goods supplied other than the quantity specifically agreed upon also fall under this category). The consumer must, however, not frustrate or prevent the supplier from recovering the goods and the consumer will only be liable in respect of any intentional interference with the goods and, if applicable, any costs incurred by the supplier due to such conduct by the consumer. The CPA states that the unsolicited goods pass to the person lawfully holding the goods, subject only to the rights of any uninvolved third-party which may have a valid claim to those goods. Unfortunately, the CPA does not provide a timeframe for when the consumer becomes the owner of the unsolicited goods but this section should serve as a warning to any supplier not to distribute any unsolicited goods.
Prices, product description and marketing
Suppliers also need to be careful when advertising prices to ensure that these are correct since they may otherwise be bound by an incorrect price unless the latter contains an inadvertent and obvious error.
The CPA further deals with product labelling and imposes obligations on retailers not to offer to supply, display or supplying particular goods if the retailer knows or reasonably could determine or has reason to suspect that the trade description applied to those goods is likely to mislead the consumer. This section together with a section dealing with general standards for marketing may have significant consequences for suppliers of products with questionable health benefits. It may therefore no longer be permissible to advertise a benefit of a product or service which in fact cannot be backed up by evidence. The CPA aims to discourage false, misleading or deceptive representations by word or conduct, made to the consumer concerning a fact material to the consumer, which render the supplier liable to a penalty or even an administrative fine of up to R 1,000,000 or 10% of the annual turnover during the preceding financial year, whichever is the lesser.
Disclosure by intermediaries
The CPA imposes obligations on “intermediaries” (persons or entities who/which are not the direct providers of the goods and services but use others to provide such goods and services under their own name, such as for example insurance brokers) to disclose prescribed information regarding any service to be performed by a third-party or any goods or property belonging to a third party. Such prescribed information, for example relates to commission to be earned by the intermediary and personal information of the intermediary. Intermediaries are also required to keep records of such prescribed information.
The CPA has specific sections dealing with catalogue marketing, trade promotions and customer loyalty programs, work from home schemes, referral selling, franchises, pyramid schemes, auctions (limited to inter alia the advertisements and procedures to be followed), lay-bys, prepaid certificates and gift vouchers and prepaid services such as periodic membership fees or amounts paid in advance for services to be rendered more than 25 business days after payment is made.
Overselling and overbooking
With regard to overselling and overbooking, the CPA requires interest to be paid in addition to a full refund and compensation for costs directly incidental to the supplier’s breach of the contract, unless the supplier can offer to supply or procure another person to supply the consumer with comparable goods or services or the inability to supply results from factors which are beyond the supplier’s control. This section will be of particular relevance for airlines one can imagine.
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