Last year, on April Fools’ Day, the Consumer Protection Act became effective, and was heralded as being much-needed legislation to protect consumers against poor service, misleading advertising, and the sale of shoddy products. With the legislation came the establishment of the National Consumer Commission, which was to receive complaints from the public against businesses contravening the Act, and to act against them. Now it appears that the National Consumer Commission is a near failure at executing its mandate.
According to The Times, the National Consumer Commission’s head Mamodupi Mohlala-Malaudzi has become a keen issuer of compliance notices against businesses, many of which have been overturned by the Consumer Tribunal, at a great cost to the businesses affected even if they were successful in getting their cases withdrawn. A report prepared by the Consumer Tribunal about the operation of the National Consumer Commission has found that its major weaknesses are that compliance notices have been issued without following the correct procedure or being ‘defective’, ‘failure of the commission to understand the act’, issuing notices which the Consumer Protection Act does not allow, badly written documents with errors, ‘contemptuous and unprofessional conduct by the commission when dealing with opposing lawyers and the tribunal‘, and ‘undermining the work of the tribunal’, very serious allegations indeed! In addition, the National Consumer Commission was found to base its decisions on ‘subjective views’.
It was the findings of this (confidential) Consumer Tribunal report that the National Consumer Commission used to (unsuccessfully) try to have the Consumer Tribunal’s rejection of the Commission’s case against Auction Alliance set aside in the Pretoria High Court.
A compliance notice can cost a business found guilty in terms of the Consumer Protection Act R1 million or 10% in annual turnover if the ruling of the National Consumer Commission is not adhered to. To date 33 cases have been referred to the Consumer Tribunal, including companies such as Eskom, City of Johannesburg, BMW, Audi SA, Peugeot Citroen SA, Kia, Volkswagen, Telkom, Vodacom, MTN, Top-TV, Cell C, and Multichoice. Of these, the correct procedure in issuing a compliance notice was not followed in six cases, and the Commission did not file responding affidavits to thirteen of the notices! The newspaper article quotes the example of the City of Johannesburg, against which 45 compliance notices have been set aside! Only big corporates can afford to challenge a compliance order, due to the cost involved, meaning that smaller businesses are forced to abide by such orders, even if the complaint is unjustified.
It would appear that Mohlala-Malaudzi’s days are numbered at the National Consumer Commission, as her contract with the Commission has not been renewed, expiring at the end of September, a matter which she took to the Labour Court and lost.
In dealing with businesses, it is surprising how few companies know about the Consumer Protection Act, and abide by it. One of the clauses of the Act prescribes that all repair work must be preceded by written and signed off quotes, but this rarely happens, as we have experienced for car services and repairs at Mercedes Benz in Century City, where they are quick to add R10000 – R20000 of extra nice-to-have part replacements. We also saw a notice at All Active Electric in Sea Point, which states that repair quotes not accepted will be charged at R50, contravening the Act. Two lamps were given to this company to be fixed, one requiring a wire to be fitted back into the switch, and another needing the brass fitting holding the bulb to be repaired. We were shocked when the bill came to R150, 50% of the purchase cost of the lamps, with additional repairs done which were not requested. When queried, the staff member quickly dropped the price to R95. No quote was received, and even the lower price felt like a rip off, despite the quick 24 hour service. Action TV came to fix a TV channel reception problem at our guest house last week, and could not find a solution on its first visit, despite having done past repairs. A ‘booster‘ was deemed to be necessary, and despite asking, we were not given a quote, being promised one the following day! The bill has come to R4650, including the booster costing R1780, cabling to the value of R950, and a number of splitters. The TV system was installed at the guest house 14 years ago, and has worked perfectly without all these extra items.
It is clear that the National Consumer Commission needs to get its house in order, and that it needs a new broom when its head leaves its employ. It clearly also needs an advertising campaign to inform business owners of their obligations in terms of repair quotations.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage