Very few consumer goods and service companies have registered with the Ombudsman for Consumer Goods and Services (CGSO) and if they continue to ignore their duty to pay mandatory subscriptions they could face legal action.
When the CGSO came into being it was a voluntary scheme, but now that it has become mandatory (to join), non-compliant companies are contravening the Consumer Protection Act (CPA), said ombud Advocate Neville Melville in August last year when only 25 out of 20 000 high-turnover companies signed up since the CGSO’s Code of Conduct was promulgated in 2015.
According to the CGSO’s annual report for 2015-2016, only 189 members belong to the scheme. That’s just a small fraction of the thousands of businesses that should be joining. Membership fees are based on turnover: R1 500 for turnover of between R1 million and R5 million to R250 000 for a turnover of more than R3 billion.
“Ours is a key role in the consumer protection environment, yet lack of funds is severely hampering our ability to provide the service envisaged when the scheme came into being in 2013,” said Mr Melville.
During the year under review, 2 192 out of 3 500 cases were finalised, all within 57 days. The industry that topped the list of consumer complaints was the cellphone industry. Which is no surprise. There were 917 gripes about the networks, and none of them subscribe to the CGSO, except MTN. There were 110 complaints about Vodacom and 62 for Cell C.
The furniture industry came a close second with 523: the JD Group (172) and Lewis (106), among them.
Here are two cases from the annual report. A woman bought a parrot from a pet shop and when, two weeks later, the bird began losing its feathers, she took it to a veterinarian, who said it had a very contagious disease and needed to be put down.
Tests on her other parrot showed that it did not have the disease and she believed the breeder was responsible. The pet shop said the bird was in a healthy condition and it showed none of the symptoms of the disease when it was sold. Tests on some of the breeder’s other birds were negative.
While it was not possible to pinpoint when the parrot contracted the disease, evidence showed it had the disease when it was sold. A sign in the pet shop excluded it from responsibility once livestock left the shop but under Section 51, a supplier cannot exclude its liability under the CPA, so the notice was of no effect. The case was referred to the National Consumer Commission.
In another case that illustrates the most widely misunderstood aspect of the CPA – the right to return goods or cancel an agreement – involved shoes. The customer bought two pairs of leather shoes – one in red and one in black.
The red pair fitted perfectly but the black shoes were uncomfortable in the toe area so the buyer returned them to the store, who said it was not a manufacturing defect and in terms of their policy she would have to accept a credit note. When she rejected the offer the shoes were sent to the factory for testing and it found that the black shoes were not made from the same leather as the red shoes.
The woman insisted that as the black shoes hurt her toes they were not fit for purpose.
The most widely misunderstood aspect of the CPA is the right to return goods or cancel an agreement. Many people believe that they have the absolute right to change their minds after buying something and to return it for a refund. There is a cooling off period only if direct marketing took place. You can cancel a transaction after the goods are delivered if they prove defective within six months of purchase. This right applies whether or not the consumer could have detected the defect before taking delivery of the goods.
The CPA gives the consumer the right to choose or examine goods and to select or reject any particular item from displayed stock before completing the transaction.
If the consumer has had the opportunity to examine the goods before they are delivered and does not, he loses the right to return them and receive a full refund after delivery.
It is essential you inspect the goods before delivery because, unless the shop has a refund policy permitting discretionary returns, it is not obliged to take back goods that you regret buying; your partner does not like; do not match your other clothes/furniture; do not fit (unless the goods were in a sealed package); are uncomfortable to wear; are uncomfortable to sit/sleep on or you realise you cannot afford them.
The customer was able to try on the shoes before buying them. That they did not fit as comfortably or were not exactly the same as the red pair was not sufficient to instruct the store to refund her and the offer of a credit note was fair.
* Reach the CGSO on 0860 000 272; email firstname.lastname@example.org, fax 086 206 1999 or you can visit www.cgso.org.za for more information.