1. 1 National Consumer Commission Presentation 15 June 2011

2. Establishment of the NCC The National Consumer Commission is established by the Consumer Protection Act 68 of 2008 as an organ of state within the public administration, but as an institution outside the public Service. The Commission - has jurisdiction throughout the Republic; must exercise the functions assigned to it in terms of this Act or any other law, or by the Minister, in the most cost-efficient and effective manner; and in accordance with the values and principles mentioned in Section 195 of the Constitution. 2

3. Role of the NCC The Commission has the responsibility to enforce the Act by : Initiating complaints on systemic issues affecting consumer generally; Investigating complaints referred by consumers, or any person entitled to do so by the Act; Issuing compliance Notices to entities investigated; Negotiating settlement of complaints where suppliers wants to settle the matter without referral to the Tribunal; Facilitating conclusion of consent orders; Referring matters to the Tribunal for adjudication and to the Equality Court Accreditation of Industry Codes and Industry Ombud-schemes – Accreditation of Consumer Groups Monitoring of Accredited Institutions Monitoring of Consumer Markets Conducting Research Develop and promote use of Codes of good Practice Ensuring Public awareness. 3

4. 4 Policy Objectives Promote a fair, efficient and transparent market place for consumers and business; Provide a consistent, predictable and effective regulatory framework that fosters consumer confidence; Provide access to effective consumer redress for economic citizens; Promote better customer service in the public and private sector; Harmonize our consumer protection framework with international best practice.

5. Overview of the CPA The Act has 7 chapters and 2 schedules  Chapter 1: Interpretation, purpose, policy & application,  Chapter 2: Fundamental Consumer Rights (equality, privacy, choice, disclosure, information, responsible marketing, honest dealing, fair value, accountability, good quality and safety,  Chapter 3: Protection of consumer rights and consumer voice (right to be heard and obtain redress, investigations, redress by the courts, role of civil society)  Chapter 4: Business names and Industry Codes of Conduct  Chapter 5: National Consumer Protection Institutions (National and Provincial Cooperation, Establishment of National Consumer Commission, Functions of National Consumer Commission)  Chapter 6: Enforcement of the Act (Enforcement by Commission, investigative powers, Offences & penalties  Chapter 7: General Provisions  Schedule 1: Consequential Amendments  Schedule 2: Transitional Provisions 5

6. 6 Application of the Act The Act will apply to: Suppliers (for profit or non profit) that promote or supply goods or services to consumers across all sectors of the economy unless exempted; Government institutions or any entity contracted by the state to provide goods or services to consumers; and Franchise offers, solicitations and agreements; Any business to business transaction subject to a threshold to be set through regulation (currently at R 2 000 000.00); Every transaction occurring within the republic; Promotion or supply of any goods and services occurring within the republic; Goods or services that are supplied or performed; Exempted goods, but section 60 and 61 applicable. Act not applicable: Goods/services promoted or supplied to the state; Consumer is a juristic person (threshold); Industry-wide exemption granted to regulatory authority; Credit agreements i.t.o. NCA but not to the goods or services; Services under employment contract; Agreements giving effect to collective bargaining agreement; Agreements giving effect to bargaining agreement i.t.o. sec 213 of LRA;

7. Chapter 1: Definitions Consumer -The Act expands the conventional definition to include users, beneficiaries or recipients of goods and services so as to extend redress to third parties especially with regards to product liability; and franchisees who currently have very limited protection through a voluntary industry code of conduct. Definition of Supplier includes any public or private entity, including Government institutions and all state organs that promotes or supplies goods and services to Consumers. 7

8. 8 Right to restrict unwanted direct marketing A consumer has a right to- Refuse to accept unwanted direct marketing; Require another person to discontinue marketing to them directly; or In the case of an approach other than in person, to preemptively block, any approach or communication to that person, if the approach or communication is primarily for the purpose of direct marketing. A consumer who has been approached for the purpose of direct marketing may demand during or within a reasonable time after that communication that the person responsible for initiating the communication desist from initiating any further communication. Registering a pre-emptive block The Commission may establish, or recognise as authoritative a registry in which any person may register a pre-emptive block, either generally or for specific purposes, against any communication that is primarily for the purpose of direct marketing. No person may charge a consumer a fee for making the demand not to be communicated or registering a pre-emptive block.

9. 9 Consumer’s right to cooling-off period A consumer may cancel a transaction from direct marketing by: Notice in writing; Within 5 business days after the later of: – when agreement was concluded; or date when goods were delivered. The supplier must return any payment within 15 business days after: – receiving notice of cancellation; or receiving goods. Cooling-off period not applicable to transactions i.t.o.Sec 44 of the Electronic Communications Act.(7days period/refund 30 days) A supplier must- Return any payment received from the consumer within 15 business days after either receiving the cancellation notice, if no goods were delivered; or if goods delivered, after goods have been returned by the consumer.

10. 10 A supplier must not market any goods or services in a manner that is reasonably likely to imply : - False or misleading representation concerning those goods or services - Fraudulent, or deceptive in any way including, in respect of, The nature, properties, advantages, or use of the goods or services The manner in, or conditions on which those goods or services may be supplied The price at which the goods maybe supplied,or the existence of or relationship of the price to any previous or competitor’s price for comparable or similar goods or services The sponsorship of any event, or Any other material aspects of the goods and services Marketing Goods and services –Section 29

11. 11 Bait Marketing –Section 30 A supplier must not advertise any goods or services as being available at a specified price To mislead or deceived any respect, relating to the actual availability of those goods or services form that supplier, at that advertised price Where the advert expressly states a limitation in respect of the availability of those goods, or services from that supplier at that price, the supplier must make those goods or services available at that price, to the extent of the expressed limits It is a defense to an alleged failure to comply with sub section 1 or 2 if – - a the supplier offered to supply or procure to another person to supply consumer with the same or equivalent goods or services of the kind advertised within a reasonable time, in a reasonable quantity and, at the advertised piece and - The consumer : Unreasonably refuses that offer,or accepts the offer and the suppler has supplies or procedure another person to supply the goods or services so offered and accepted

12. 12 Catalogue Marketing Section33 Direct marketing to consumers: A person who is directly marketing goods and concludes an agreement with the consumer must inform the consumer of the right to rescind the agreement within the cooling off period. If a person who has marketed any goods directly left any goods with the consumer without requiring or arranging payment for them, those goods are unsolicited goods and section 21 applies to them. Catalogue marketing: Agreement entered into by telephone (initiated by consumer), fax or postal order where consumer does not have opportunity to inspect goods In catalogue marketing, the supplier must disclose: Supplier name and registration/license number Address and contact details Sales records (Sec 26) & Currency for sales Delivery arrangements Cancellation, return, exchange and refund policy How to lodge a complaint

13. False, misleading or deceptive representations In relation to the marketing of any goods or services, the supplier or its agent must not, by word or conduct- Directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact to the consumer; Use exaggeration, innuendo or ambiguity as to the material fact, or fail to disclose a material fact if that failure amounts to a deception; or Fail to correct an apparent misapprehension on the part of a consumer, amounting to false, misleading or deceptive representation It is a false, misleading or deceptive representation to falsely state or imply, or fail to correct an apparent misapprehension on the part of a consumer to the effect that any goods or services are of a particular standard, quality, grade, style or model. 13

14. Accreditation of Ombud-schemes The Commission’s possibilities include – Recommend accreditation of proposed Industry codes to the Minster Recommend the withdrawal of all or part of the prescribed code Recommend a Scheme to be accredited as an Accredited industry Ombud Scheme Monitoring and review of the effectiveness of industry codes relative to the purposes and policies of this Act Develop and promote use of Codes of good Practice Promotion of legislative reform

15. 15 Thank you