Business Studies Grade 12

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Consumer Protection Act

Business Studies Grade 12 Business Studies Grade 12- Modules & Notes Consumer Protection Act

PURPOSE OF THE CONSUMER PROTECTION ACT

  • Promotes and protect the economic interest of consumers by providing access to information.
  • Promotes fair/accessible and sustainable places for people to sell their products
  • Establishes a national standard to protect  consumers
  • Provides guidelines for better consumer information and prohibit unfair businesses practice
  • Promotes responsible consumer  behavior
  • Promotes consistent laws relating to consumer transaction and agreement
  • Establish a national consumer commission [ncc]
  • Ensure that consumer have access to information they need to make informed choices
  • Promotes the rights and full participation of historically disadvantaged individuals as consumer.
  • Ensure that consumers are not misled/deceived by supplier of goods/services
  • Promotes consumer safety by protecting them from hazardous  products/services
  • Strengthen a culture a of consumer rights and responsibilities
  • Empowers consumers to take legal action if their rights are not withed
  • Protect consumers against contracts that include  terms with unfair  terms which limit the liability of suppliers
  • Protects consumers against unscrupulous businesses such as fly-by-night franchisers
  • Allows for consumers and businesses to resolve disputes fairly and effectively

IMPACT OF THE CPA ON BUSINESS – POSITIVES/ADVANTAGES

  • Enables businesses to resolve disputes fairly through the National Consumer
  • Commission/Consumer Court/Industrial ombudsmen
  • Businesses may build a good image if they ensure that they do not violate consumer
  • rights.
  • May gain consumer loyalty, if they comply with CPA.
  • Businesses may be safeguarded from dishonest competitors.
  • Businesses may be protected if they are regarded as consumers
  • Prevents larger businesses from undermining smaller ones.

NEGATIVES /DISADVANTAGES

  • Confidential business information may become available to competitors
  • They have to disclose more information about their products and processes/services
  • Businesses may feel unnecessarily burdened by legal processes
  • Penalties for non-compliance may be very high
  • Staff need to be trained /Legal experts need to be consulted, which can increase costs
  • Many business documents need to be simplified /revamped at extra cost as consumers have a right to receive contracts in simple/understandable language.
  • Administration costs increase as legal contracts need to be ordered in plain language/pitched at the level of the consumer
  • Businesses have to replace/repair faulty items/refund money if the faults occur within six months after purchase
  • Supply chain management  in stock level s will have to change  as defective goods have to be replaced within six  months at the request of the consumer
  • Information technology systems need to be improved as the retailer now has to keep more detailed records of interactions with consumers/ be able to report to the national consumer commission.

DISCRIMINATORY ACTIONS ACCORDING TO THE CPA

  • Denying customers proper  information about their products and services
  • Varying the quality of goods when selling in different areas
  • Prioritising any consumer group over one when marketing/selling
  • Charging unfair prices for the same goods and services
  • Treating customers different based on gender/age/race

CONSUMER RIGHTS FOR THE CONSUMER PROTECTION ACT

Right to choose Consumers have the right to: . choose suppliers and/or goods. . shop around for the best prices. . reject goods that are unsafe/defective for a full refund. . cancel/renew fixed term agreements. . request written quotations and cost estimates.
Right to privacy and confidentiality .Consumers have the right to stop/restrict unwanted direct marketing. .They can object to unwanted promotional e-mails/telesales. .They have the right to stop/lodge complaints about the sharing of their personal details.
Right to fair and honest dealings .Suppliers may not use physical force or harass customers. .Suppliers may not give misleading/false information. .Businesses may not promote pyramid schemes and/or chain-letter schemes .Businesses may not overbook/oversell goods/services and then not honour the agreement.
Right to information about products and agreements/Right to disclosure and information .Contracts and agreements should be in plain language and easy to understand. .Businesses should display prices which are fully inclusive disclosing all costs. .For the same product are displayed, consumers should pay the lower price.
Right to fair/responsible marketing/promotion .Businesses should not mislead consumers on pricing, benefits/uses of goods. .Consumers may cancel purchases made through direct marketing within five working days/cooling off-period. .All information related to the country of origin/expiry dates/ingredients of the products should be disclosed/clearly labelled.
Right to accountability from suppliers .Consumers have the right to be protected in lay-bye agreements. .Businesses should honour credit vouchers and prepaid services.
Right to fair/just/reasonable terms and conditions .Businesses should provide consumers with written notices of clauses that may limit consumer rights. .Businesses may not market/sell goods at unfair prices.
Right to equality in the consumer market place .Businesses should not limit access to goods and services. .Quality of goods may not vary when supplied to different consumers. .Businesses may not charge different prices for the same goods/services. .No discrimination should occur when businesses market products and services in different areas/places.
Right to return goods/have goods replaced/claim a refund .Goods that are unsafe/ defective may be replaced by the supplier. .Faulty items may be returned for a full refund. .They may return faulty items if the fault occurs within six months after purchasing the item.
Right to complain .Consumers may use various methods/channels to complain about poor quality goods/services. .They can complain via customer care desks/consumer hotlines/ombudsman etc.
Right to fair value/good quality/safety .Consumers may demand quality services/goods. .They may receive an implied/written warranty. .Cancel /renew fixed term agreements. .To be informed about hazardous/dangerous products .Reject goods that are not the same as the sample marketed .Return faulty items if the fault occurs within six months after purchasing the item

 

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