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Consumer Protection Act – Seller Beware VOASA Conference – Durban 30 August 2010.

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Presentation on theme: "Consumer Protection Act – Seller Beware VOASA Conference – Durban 30 August 2010."— Presentation transcript:

1 Consumer Protection Act – Seller Beware VOASA Conference – Durban 30 August 2010

2 Overview CPA consists of 122 sections and 2 schedules Starts on 25 April 2010 (early effective date) and 25 October 2010 (general effective date) Focussing on 4 sections: – Reservations of rooms – overbooking – Fixed Term Contracts – Is an exchange program a loyalty program? – Promotional Competitions

3 Reservation of rooms – overbooking – s47 Can’t offer rooms you don’t actually intend to provide Can’t offer rooms which are materially different from the rooms actually provided If you receive money for a room then you must provide the room or a materially similar room. If you don’t then: – Refund (with interest) – Compensate for direct costs incurred DEFENCES: – Either the consumer accepted an alternative room, or – Consumer unreasonably declined your offer

4 Fixed Term Contracts – s14 Irrespective of the term – consumer can terminate the agreement with 20 business days notice BUT supplier can only terminate if: – breach of the agreement and – with 20 business days notice and – only if the breach continues You can still recover payments already due at date of termination and a “reasonable cancellation penalty” Renewal of contract: – Must give notice of expiry bus days before – Unless consumer specifically renews continues on a month to month basis

5 Are exchange programs loyalty programmes?s35 Definition of “Loyalty Credits or Awards” and “Loyalty Program” very broad Loyalty program have certain requirements – Must have sufficient supply for demand – Cannot discriminate between exchange and purchase – Cannot supply inferior timeshare for exchange – Must exchange timeshare in same way as exchanging cash – Can only impose “periodic fee” for membership and not a transaction fee – Cannot bundle timeshare with other products Can restrict timeshare for 90 days in a calendar year (20 business days notice)

6 Promotional Competitions – s36 Repeals s54 of Lotteries Act Different from Trade Promotion – Competition not provided to all – Dependant on a degree of luck (although skill can be an element) The prize must not: – Be awarded if is it unlawful to supply those goods to a person (but not if it is regulated) – Be awarded to any person connected with the supplier – Be bundled with anything else that must be purchased Must be no: – further requirement once the prize is won – further money to be paid after the prize is won

7 Promotional Competitions – s36 (cont) There must be – an actual prize – an actual competition – no money payable, other than the reasonable cost of posting or transmitting the entry form – a prize that is not offered to everyone – competition rules prepared before the competition – competition rules provided to the Consumer Commission – competition rules which are provided to the consumer – a retention of the competition rules for a period after the competition finalises – a set of steps required to participate in the competition – a basis on which the prize is awarded – a closing date of the competition – a way in which the results are published – a right which is conferred on to the person immediately after winning

8 Thank You Tel: +27 (0) Fax: +27 (0) Web:


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