The final version of the draft of a new law — Consumer Protection Bill — has been tabled before the national assembly for last comments and approval. What's all the fuss about? Why do we need a new bill anyway?

The bill aims to update old laws, combine existing and new laws under a meaningful umbrella and put into law issues that were previously addressed only via common law. Up until now a lot of the law referring to consumers has been buried in other legislation that actually refers to totally different issues.

Ultimately the government wants to: improve protection for consumers against unfair business practices, increase fairness and equality among consumers, give consumers the information they need to make good choices and to know what their rights are, give consumers a better way to get compensation if things do go wrong and enforce the new rules.

What does this mean for consumers?

On paper, if this bill is passed, South Africans will be among the best protected consumers in the world.

Here is a summary of the main topics the bill covers:

1. Consumers will be guaranteed equal access to markets. This means that suppliers must make goods and services available to everyone at the same price and quality and also under the same terms and conditions. Of course there are exceptions, such as not selling of alcohol to minors or being able to give children reduced price tickets. These exceptions are all clearly laid out.

2. Consumers’ privacy will be protected. The bill will lay out strict rules regarding direct marketing and the way it is carried out. Customers will be able to ask any marketer to stop marketing to them and the bill may even put the groundwork in place to pre-emptively opt out of any direct marketing.

3. Consumers will have a right to choose. This affects a number of issues including:

   • Not forcing customers to buy bundled services.

   • How customers can exit fixed term contracts.

   • Customers must sign off estimates for repairs and services before work commences.

   • Customers get five days to change their mind about a purchase.

   • What are fair cancellation fees if a customer cancels an advanced booking.

   • Products that are bought by mail order or from a sample must correspond with the original.

4. Fair disclosure of information to customers. This includes clear descriptions in plain language of products and services, clear pricing information, commissions charged by intermediaries and even good identification when a supplier needs to go to a customer’s home.

5. Fair and responsible marketing. In addition to the opt-out rules surrounding direct marketing, suppliers may not use misleading or fraudulent marketing tactics. The following marketing practices will be illegal: bait marketing — where a non-existent special offers lures customers into the shop; negative options — where customers have to ask not to be sold something, for example, not to be sent the book of the month from a book club else they will be charged for it; and referral selling — when customers are encouraged to buy products or services based on potential future rebates or commissions. And fair practices will be set in place for direct marketing, loyalty campaigns and competitions.

6. Customers will be entitled to honest and fair dealing. This includes issues such as overselling and overbooking of services. The bill will outline what compensation customers can claim, for instance if they miss a flight and subsequently miss a hotel or car booking. In addition, force and other unfair tactics to get someone to buy something are banned.

7. Terms and conditions need to be fair, just and reasonable. The bill explains what this means, and also makes clear that supplier liabilities need to be highlighted.

8. Consumers should expect fair value, good quality and safe products. For the first time a law will make clear where liability lies, and also guide issues such as product recalls.

9. Suppliers need to be accountable to customers. The bill sets out rules on how lay-buys should be offered. It also says that pre-paid vouchers and credits need to be valid for five years.

10. Consumers have a right to be heard and receive compensation if they are unfairly treated. The bill outlines the procedures for doing this. Complaint and compensation methods need to be accessible and the consumer should not be victimised.

And the good news for suppliers is that the getclosure! service can be used as a plug-and-play customer service facility. This means suppliers can easily comply with government requirements to offer an accessible, easy-to-use complaints service. The service is fully customisable, with full reporting on correspondence and time to resolution as well as integration with suppliers’ existing processes. In addition, suppliers can show their commitment to customer service by displaying the getclosure! seal on their web sites.

Who is responsible for this bill?

This is a Department of Trade and Industry initiative. If the bill is passed, a National Consumer Commission and Tribunal will be set up to oversee and enforce the new laws. The government has earmarked R 51.3-million rand in 2009 and 2010 to fund the bill.

So what happens next?

The final version of the draft bill has been tabled before the national assembly for last comments and approval. It seems likely that this will be approved, although we do not have an indication of when this will take place.