The CPA: Learner’s Guide
by Bruce Wade on 11/04/11 at 12:59 pm
4 comments
The Consumer Protection Act or CPA came into effect last week but we are still finding many people who do not know the full extent of what it is all about. This is not just another government law that has little or no affect on us; this one has HUGE issues with how we do business and
The consumer protection act is there to protect the consumer from discriminatory and unfair market practices. Stop the sale of low-quality and unsafe products. Protect the consumer against being confused and bullied into purchases and contracts.
The CPA covers all transactions for both services and goods supplied to consumers in South Africa. A consumer is defined as a person or business that has less than 3 million Rand in assets or turnover.
Here are some of the issues that affect the business owner as a supplier:
Products need to be supplied at a fair and reasonable price- All products need to be well labelled including the country of origin
- You cannot group or bundle items that are not financially beneficial for the consumer
- Consumers can now cancel fixed term agreements with 20 days notice
- All contracts, warnings and notices must be in plain language
- Marketing cannot be misleading
- Negative option or bait marketing is not allowed
- Referral selling is prohibited
- Consumers have a cooling off period of 5 days for all direct marketing
- Unsuitable or unexamined products can be returned
- If you advertise a product at a special price, you need to be able to fulfil that promise
- Quotes are binding and work needs to be according to the quote
- Grey products need to be labelled as such
If you own a business involved in providing a service or product then use this check list as a guide. If you have any doubt, please consult a CPA lawyer.
- Obtain indemnities from suppliers and service providers
- Review all agreements with consumers
- Training of staff: customer-facing employees, marketing managers, sales teams, accounting, etc.
- Review all notices and warnings
- Updating strategy / policy regarding new rules on promotion
- Consider obtaining additional insurance for product liability
- Apply for industry exemption if appropriate
- Additional systems for quality assurance
In my own words; if you do business with good values and morals, the CPA should not have such a huge affect on your day to day processes. If you have any sort of covert agenda marketing, manipulative contracts or dodgy products, it is best you consult a CPA Lawyer and get sorted out. If you do not like to read, then watch the movie.
Bruce Wade is a survivor of the corporate and NGO world, author, speaker, business owner and entrepreneur, Bruce now runs the Entrepreneur Incubator; a member based organisation dedicated to serving those in the trenches of business through coaching, mentoring and leadership education. View more articles by Bruce Wade.
Tags: consumer protection, consumer protection act, cpa
sparnar
Apr 11th, 2011
1st thing, your tabbing order is shot on the comments form. when i tab out, i go to the “Entrepreneurs, got a question?” section.
wrt to the fixed term contract cancelling, does this include cellphone contracts?
Bruce
Apr 11th, 2011
The CPA includes all fixed term contracts, including cell phone contracts but excludes contracts that were signed before 31 March 2011 and or end before or up to 31 march 2013. Not sure what cell phone providers will do with the ‘free’ handset when you cancel your new contract with 20 days notice just after the start of the 24 months.
We still need to follow this one up with them and do some research.
Anyone Know?
kajal mathanlal
Apr 14th, 2011
hi i jus upgraded my contract with MTN on the 03-04-2011 , a few days after i got my new phone i encounted major problems with it.wen i took it back to the store,they offered to give me a new phone coz it was within the 10 working day obf.I explained to the salesman that i donot want the same handset due to the problems i encounted with it.I was told that the phone was my choice and that im stuck with the CHOICE i made and they cant assist me with changing the phone and the subscription im on.I feel its very unfair to me paying R349 for 24 months for a contract im not satisified with.I dont wanna cancell my contract, i jus want to get a phome that wont let me down like hoe the SAMSUNG GALAXY TAB did.I also wanna go on a reduced subscription with another handset. can you please assist me asap as the 15-04-2011 is the last day for the obf warrantee on this phone.
Mr Delivery’s rebranding splits its customers | Ideate
Apr 15th, 2011
[...] the email footer. This does not violate current laws, but would be a violation under the upcoming Customer Protection Act. In any case, several customers found the behaviour unethical and complained about [...]