What happens when the price displayed is wrong? For example, the price displayed for a cell phone is R120 when it should be R1,200. The consumer sees R120 and thinks “Great, that is a good deal!” and decides to buy it for R120. the consumer gets to the till and is told “Sorry it is actually R1,200“. Is the retailer or supplier obliged to sell it for the price advertised? Can the consumer insist that they can buy it for R120 and get a deal of a life time.
Up until now, South African law has not really provided clarity on this issue. Legislation dealt with it to an extent and the Advertising Standards Authority did not really deal with it in their Advertising Code.
Is the retailer or supplier obliged to sell it for the price advertised?
But that will change when the Consumer Protection Act becomes effective. Section 23 dealing with the “disclosure of price of goods or services” says the following. I have emphasised some words in bold.
“1) This section does not apply to a transaction if-
a) a supplier has provided an estimate pertaining to that transaction, or the consumer has waived such an estimate, as contemplated in section 15; or
b) section 43 of the Electronic Communications and Transactions Act applies to that transaction.
2) In this section, ‘‘price” includes a unit price.
3) Subject to subsection (4), a retailer must not display any goods for sale without displaying to the consumer a price in relation to those goods.
4) A retailer is not required to display a price for any goods that are displayed predominantly as a form of advertisement of the supplier, or of goods or services, in an area within the supplier’s premises to which the public does not ordinarily have access.
5) A price is adequately displayed to a consumer if, in relation to any particular goods, a written indication of the price, expressed in the currency of the Republic, is-
a) annexed or affixed to, written, printed, stamped or located upon, or otherwise applied to the goods or to any band, ticket, covering, label, package, reel, shelf or other thing used in connection with the goods or on which the goods are mounted for display or exposed for sale;
b) in any way represented in a manner from which it may reasonably be inferred that the price represented is a price applicable to the goods or services in question; or
c) published in relation to the goods in a catalogue, brochure, circular or similar form of publication available to that consumer, or to the public generally, if-
i) a time is specified in the catalogue, brochure, circular or similar form of publication as the time after which the goods may not be sold at that price, and that time has not yet passed; or
ii) in any other case, the catalogue, brochure, circular or similar form of publication is dated, and in the circumstances may reasonably be regarded as not out of date.
6) Subject to subsections (7) to (10), a supplier must not require a consumer to pay a price for any goods or services–
a) higher than the displayed price for those goods or services; or
b) if more than one price is concurrently displayed, higher than the lower or lowest of the prices so displayed.
7) Subsection (6) does not apply in respect of the price of any goods or services if the price of those goods or services is determined by or in terms of any public regulation.
8 ) If a price that was once displayed has been fully covered and obscured by a second displayed price, that second price must be regarded as the displayed price.
9) If a price as displayed contains an inadvertent and obvious error, the supplier is not bound by it after-
a) correcting the error in the displayed price; and
b) taking reasonable steps in the circumstances to inform consumers to whom the erroneous price may have been displayed of the error and the correct price.
10) A supplier is not bound by a price displayed in relationship to any goods or services if an unauthorised person has altered, defaced, covered, removed or obscured the price displayed or authorised by the supplier.
11) If, in addition to displaying a price in relation to any goods or services, a supplier has advertised or displayed a placard or similar device announcing that prices are, will be or have been reduced by-
a) a monetary value, generally or in relationship to any particular goods or services, the displayed price for the purpose of subsection (6) must be regarded as being the price immediately displayed in relationship to the goods or services, minus the announced monetary reduction; or
b) a percentage value, generally or in relationship to any particular goods or services, the displayed price for the purpose of subsection (6) must be regarded as being the price immediately displayed in relationship to the goods or services, minus an amount determined by multiplying that price by the percentage shown,
unless the supplier has applied two or more prices immediately to the goods or services concerned, and the difference between the highest and lower or lowest of those applied prices is equivalent to the advertised or placarded reduction in price.”
Sub-section 9 is the most relevant. So in some circumstances, the retailer is obliged to sell it for the price advertised and the consumer can get the deal of a lifetime.
Date: October 27, 2010 – 12 pm
Category: Consumer Protection, Law courses, Services
Are you wondering what impact of the Consumer Protection Act will have on your organisation? We can help. We offer a seminar, workshop or webinar (online seminar) on the subject. Get a working understanding of the affect of the Consumer Protection Act on your organisation and its business. Get up to speed quickly.
Reserve your seat below
What do we cover?
- Why consumer protection matters – the top risks for organisations and individuals
- What must an organisation comply with?
- Who is responsible?
- An overview of related laws, rules, codes and standards
- Overview of the Consumer Protection Act:
- What is it and what is the current status? What are the time lines?
- A heads up
- Important definitions
- Implementing an effective compliance program
- The questions you should be asking
- Finding answers
- The documents that will be affected
- How will the CPA affect organisations? What is going to have the biggest impact? Some practical implications:
- Your documents
- Promotional competitions and other marketing efforts
- Are you liable for damages caused by the goods your supply?
- When you display the wrong price
- Bundling under the CPA
- Do you need additional insurance?
- Why you NEED to use plain language?
- Take Home points and Action items
- Understand how consumer protection impacts your organisation and its business
- Be aware of the risks
- Get an overview of consumer protection laws
- Become sufficiently familiar with the general content of consumer protection laws to discharge your duties
- Understand the context of consumer protection laws and how they interact
- Be aware of the challenges it will bring and the opportunities it will create
Who should attend? Why?
Business people and managers – not consumers.
- Directors (executive and non-executive, CEOs and FDs) – to discharge their legal duties and direct the course of the organisation
- CAEs, auditors and assurance providers (internal and external) – to audit and provide assurance
- CROs and Risk Managers – to manage risks
- Compliance officers – to effectively comply with consumer protection laws
- Legal advisors (corporate lawyers or in-house lawyers) – to provide good legal advice on consumer protection issues
Who is the presenter?
One of the professionals from the firm will present it. Michalsons Attorneys is an agent for Made Easy and the attorneys at Michalsons are consultants trained to help you comply with the Consumer Protection Act.
How long is it?
It depends on the format – the seminar is 45 minutes, the workshop between two hours and a full day and the webinar about 45 minutes.
“It’s an absolutely awesome platform from which I benefited immensely” Winston Seyama, Group Risk Management, Standard Bank Group Limited
What does it cost?
Please email us asking for a quote.
The price for the webinar version is R949 per person. After you have registered, we will send you an invoice. Once we have received payment, we will approve your attendance and send you information on joining the webinar. We offer a 100 percent money back guarantee. If you miss the event or are not happy for any reason, we will give you your money back
Reserve your seat
- Wednesday 23 March 2011 11AM to 12 AM – click here to register
If this date or time does not suit you, let us know.
We are happy to give the seminar or workshop at your venue.
The webinar is online. It is live, so you can ask questions to make sure that you get the information you are looking for. If you want a personal in-house seminar at your offices, please contact us and we will send you a quote.
What do I need for the webinar?
For the webinar, all you need is a reasonable Internet connection, and a pair of headphones.
Still have questions?
Many people view the Consumer Protection Act 68 of 2008 (CPA or “the Act”) as the Bill of Rights for consumers – probably rightly so, as consumers will have ample rights in terms of the Act, once in operation. One of these rights is the Right to Choose as contemplated in Chapter 2, Part C of the Act.
What does the right to choose really entail?
The Right to Choose actually deals with all of the following issues:
- The Consumer’s right to select suppliers;
- Expiry and renewal of fixed-term agreements;
- Pre-authorisation of repair or maintenance services;
- The Consumer’s right to a cooling-off period after direct marketing;
- The Consumer’s right to cancel advance reservation, booking or order;
- The Consumer’s right to choose or examine goods;
- The Consumer’s rights with respect to delivery of goods or supply of service;
- The Consumer’s right to return goods;
- Unsolicited goods or services.
The right to select suppliers by implication excludes bundling of products or services.
The Consumer’s right to select suppliers
Section 13 of the CPA prohibits a supplier of goods or services to require (as a condition of offering to supply goods or services or to conclude an agreement with a consumer) that the consumer purchases other goods or services from that supplier or a specific third party supplier. In practice, this means that it is against the law to bundle products or services, because it infringes a consumer’s right to choose its supplier. For example, where supplier A provides a software solution on condition that the consumer buys the hardware required for the software to run on from supplier B (or A for that matter).
The CPA wants to avoid the situation where a consumer is forced to buy more than one product (or obtain a service) from the same or nominated third party supplier where it does not actually want to buy the second product (or obtain the service) from the supplier. The consumer might not need the second product or service. For example, you want to buy a surf board, but the surf shop says that if you want a surf board you have to buy a wet suit. Fine if you live in Cape Town, but not if you live in Durban.
There are certain exceptions to the general prohibition on bundling. The CPA prohibits bundling, unless the supplier can show that:
- the convenience to the consumer to bundle the goods or services outweighs the limitation or restriction of the consumer’s right to choose
- bundling of the goods or services results in economic benefit to the consumer – surf board R100, wet suit R100 – surf board and wet suit R180
- the supplier offers bundled goods or services separately and at individual prices as well
The bundling must be to the consumer’s advantage or the different goods or services must be offered individually as well
So, the bottom line is that the bundling must be to the consumer’s advantage or that the different goods or services must be offered individually as well. In practice, exception 3 won’t be problematic – it is easy to ascertain whether a supplier provides goods and services at individual prices or not. Applying exceptions 1 and 2 may be a bit more difficult. Convenience v limitation is a matter of interpretation and each case will have to be judged on its own merits. The same goes for economic benefit. On the face of it, a “saving” to a consumer seems to be an economic benefit. But is it really an economic benefit if the consumer did not want or need the second product or service in the first place? We’ll have to wait and see how the Commissioner and Tribunal (National Consumer Tribunal established by section 26 of the National Credit Act) and Courts interpret these exceptions.
Real life cases
Recently Telkom has come under fire for the bundling of it voice services with that of its ADSL data service, or more specifically that it is impossible to subscribe to ADSL service without first getting a voice subscription. This is a clear example of bundling, as defined in the Act, and is unlawful unless Telkom can rely on one of the exceptions.
Telkom cannot rely on exception 3 as currently they do not offer ADSL services separately to voice services. The fact that ADSL services are priced separately from voice services on ones bill does not mean Telkom has met the requirements exception, as these services are not offered separately.
As mentioned above, it is difficult to determine how the National Consumer Commissioner will interpret exceptions 1 and 2, so how it they will rule in in telkoms matter is difficult. Given the Commissioners strong “pro-consumer” statements thus far, it is likely Telkom will not meet the requirements for exception 2. I say this on the basis, that even if ADSL prices are subsidised by the voice services, I don’t think the subsidisation is so great that it would benefit the Consumer to take voice services, that they don’t intend to use.
I think Telkom’s greatest chance lies in exception 1. Because this section is so loosely defined, Telkom could possibly make an argument that, for technical reasons, ADSL services can only be provided on lines that have voice services already enabled on them. To my mind, I don’t think that this argument will work, and if the matter goes before the Commissioner I think we will see them rule in favour of the Consumers.
Date: August 29, 2010 – 9 am
Category: Consumer Protection, Featured Services, Services
Are you ready for the commencement of the Consumer Protection Act? Do you comply? Are you addressing the risks related to the Consumer Protection Act?
We offer the following Consumer Protection Act services in line with our view that compliance is a process. Each step leads to the next.
(Step 1 – Awareness) Be aware of the issues and applicable law
We can help you to be aware of and learn about consumer protection and the law that requires it. We do this by:
- Conducting a seminar called The Impact of the Consumer Protection Act on your organisation?
- Providing online legal advice on consumer protection on this web site.
- Providing you with a book called The Consumer Protection Act made easy. The book will give you the background information that you need to know and will get you up-to-speed fast. It will reduce your overall cost of compliance. To get it in eBook form go to Kalahari. To order a physical copy go to Online Legal.
We make you aware by applying our experience and knowledge to your specific circumstances.
(Step 2 – Assessment) Assess, determine the gap, and find solutions
We can conduct a Consumer Protection Act readiness assessment to determine whether your organisation is ready for the Consumer Protection Act. It will be conducted by an experienced attorney (or a team of attorneys or other CPA consultants) with a detailed cross-departmental report and recommendations. You will receive a detailed report that states specially how ready your specific organisation is. It will customised for your specific circumstances.
We offer the following types of assessments:
- Readiness desktop analysis with informed officer (2-3 hours)
- Detailed assessment after interview with each section head
- Full role accountability mapping exercise incl. individual employees
(Step 3 – Solutions) Implement solutions
We can help you implement various solutions. For example, we can:
- Review your documents to ensure that they comply with the Consumer Protection Act
- Convert your documents into plain language
- Make sure your promotional competitions comply with the Consumer Protection Act
- Tell you what happens when a retailer displays the wrong price.
(Step 4 – Review) Ongoing review
We support you to review your situation on an ongoing basis and ensure that you continue to comply.
Our consumer protection services will help you to:
- Identify the sections of the Consumer Protection Act that are relevant to you
- Determine the impact of the Consumer Protection Act on your business
- Focus on the activities that are critical to your business
- Prioritise your next steps
- Fast track your consumer protection compliance efforts
- Get clarity on where you are and where you need to be
- Determine the gap between your reality and compliance (usually a gap analysis)
- Determine whether there is anything you should be doing in preparation for the commencement of the Consumer Protection Act
- Find solutions to fill the gap – determining what solutions you need
Through our consumer protection services you either get assurance that you comply or we help you to find solutions to ensure that you comply. We will also point you to material that you can read to get up to speed.
Get a proposal from us
For more information or a proposal, please contact firstname.lastname@example.org.
Are you a consumer with a complaint?
If you are a consumer with a complaint you can:
- First try to sort out the issue with the company concerned.
- Lodge a complaint directly with the National Consumer Commission (NCC) by calling 0860 266 786.
- Visit the National Consumer Forum website and find out where you can complain.
- Send Michalsons Attorneys an email to CPAcompliant@michalsons.co.za asking for legal advise.
Date: October 29, 2010 – 11 am
Category: Advice, Clients, Consumer Protection, eTransactions, Media, Online Legal
Starting or running an online store is more complex than it appears. There are various aspects and different issues to consider. However, there is always a limited amount of time and budget. For this reason, the legal considerations often get ignored or put on the to-do list.
By online store we mean every supplier providing goods and services by way of an electronic transaction. Goods and services cover everything. Everything that can be provided is either goods or services. So widgets, books, stationary, CDs are goods. Services includes information services and Software as a Service (SaaS).
Electronic transactions include not only transactions conducted via a web site but also transactions concluded by e-mail and SMS. Sometimes they are also called web stores or e-tailers short for electronic retailers. A web site with a shopping cart facility (basket and checkout) from which goods or services can be purchased (hired or exchanged) directly is an online store. But in terms of our law, a vendor that concludes transactions (in whole or in part) by e-mail or SMS is also an online store. Such vendors often have a brochure or catalogue web site.
Well, let’s have a look at what the legal considerations relating to an online store are? Here is a list of some of the laws:
- Consumer protection laws. The Electronic Communications and Transactions Act (ECT Act) contains provisions relating to consumer protection in the case of an electronic transaction. The Consumer Protection Act that commenced on 1 April 2011 also has a direct impact.
- With regard to privacy and the protection of personal information, the ECT Act also contains relevant provisions. A draft Protection of Personal Information Bill has also been published and is expected to be enacted before the end of this year.
So what legal notices should appear on an online store?
- A Return Policy specifying the manner in which products can be returned.
- A Security Policy sets out the security measures that you have in place regarding your online store.
- A Copyright Notice should appear in the footer of your online store to ensure that people are aware that all of your rights relating to your online store are reserved.
Sure, you could copy and paste the legal notices from another online store. The problem with this though is that you will be infringing somebody else’s copyright, the legal notices might not protect you and they may well be out-of-date. Further, if you try to amend them yourself, you don’t know that the amendments will be correct. You want to do it properly. Most people do because they understand the importance, but it’s the budget that’s a problem. The budget simply does not allow for it. Well, that was until now.
For these reasons we have developed a set of templates for an online store including:
- templates of all legal notices that you require for the standard online store;
- e-mail templates that an online store should use (including a template acknowledgement of receipt, offer rejection, order confirmation);
The templates are available for download in editable format. Click here to order.
We also provide online legal guidance relating to online stores, including telling you the Info that must be on your web site.