Consumers - Best Protected Species
Let me start by saying that Consumer Legislation passed since 2004 in SA, all have a golden thread weaved through them, and also a golden thread weaving them together.
The golden thread that weaves Consumer Legislation together is the National Consumer Council (NCC). The NCC is the primary regulator of consumer-business interaction in South Africa and was created by the government under the auspices of the Department of Trade and Industry (DTI), to ensure the economic welfare of consumers. Consumers play a vital role in the growth of the economy and thus contribute to the national fiscus and the development of the country.
The Competition Commission and the National Consumer Commission have an agreement to work together to ensure that consumers receive the “best deal” comes to the protection of consumer rights
The DTI sets the policy direction as well as the regulatory and dispute resolution frameworks for the consumer. In order to ensure that this policy direction and these frameworks are a reality in the lives of the citizens of our country, the National Consumer Tribunal (NCT) was created and is expected to fulfil its functions in terms of its dual mandates set by the National Credit Act (NCA) and the Consumer Protection Act (CPA). The NCT has a crucial role to play within these two pieces of aligned legislation and is relied on to contribute to a consistent, predictable and effective environment to safeguard the interests of consumers, goods, services and credit providers in South Africa.
The National Consumer Tribunal
As an independent adjudicative entity, the NCT’s mandate is to hear and decide on cases involving consumers, suppliers of goods and services, credit providers, regulators, debt counsellors, credit bureaux, payment distribution intermediaries as well as alternative dispute resolution agents.
In so doing, the Tribunal hears applications and cases that are premised upon the terms outlined within the NCA, CPA and the Rules of the NCT.
The NCT has a solid three-folded mandate founded in the South African Constitution (SAC).
1. The SAC - section 32 - Access to information
Everyone has the right of access to:
a) any information held by the state; and
b) any information that is held by another person and that is required for the exercise or protection of any rights.
National legislation must be enacted to give effect to this right, and may provide for reasonable measures to alleviate the administrative and financial burden on the state.
2. The SAC - section 33 - Just administrative action
1. Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.
2. Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons.
3. National legislation must be enacted to give effect to these rights, and must provide for the review of administrative action by a court, or, where appropriate, an independent and impartial tribunal.
3. The SAC - section 33 - Access to Courts
Everyone has the right to have any dispute that can be managed and adjudicated by the application of law decided in a fair public hearing before a court; or where appropriate, another independent and impartial tribunal or forum.
The golden thread that is weaved into all Consumer Legislation can be summed up in two words: Consumer Protection.
Consumers in South Africa enjoy certain rights, which are protected under the SAC, as aforementioned. There are also numerous institutions established to specifically deal with matters relating to consumer rights. One institution set up and positioned to look into consumer complaints is the Ombudsman. An Ombudsman is an independent, impartial person with authority and responsibility to receive, investigate or formally address complaints.
Following are some of the available Ombudsman offices in South Africa:
Ombudsman for Banking Services
This office resolves complaints to do with banking services and products. The service is free and the only requirements are that it must be a bank issue and the customer must have followed the banks' complaint handling procedures before approaching the Ombudsman. Businesses may also lodge complaints provided the business has a turnover of R10 million or less per year.
Community Schemes Ombudsman Service
Community Schemes Ombudsman Service (CSOS) regulates the conduct of parties in community schemes and presides over the regulation, control and quality assurance of all scheme governance documentation issues or complaints. This office also provides stakeholder training, consumer education and awareness for property owners, occupiers and other stakeholders.
The National Consumer Commission
The National Consumer Commission (NCC) regulates consumer-business interaction in South Africa. This body conducts investigations into alleged prohibited conduct of suppliers and promotes the resolution of complaints between consumers and suppliers.
Consumer Goods and Services Ombudsman
This office was established to guide the consumer goods and services industry on expected minimum standards of conduct and resolve disputes between consumers and suppliers. If you have an unresolved complaint against a supplier, this is the right office to assist you.
Credit Ombudsman
This office was established to resolve complaints from consumers and businesses that are negatively impacted by credit bureau information and disputes with credit providers.
National Credit Regulator
The National Credit Regulator is tasked with carrying out education, research, policy development, and registration of industry participants, investigation of complaints as well as enforcement of the National Credit Act. This office also deals with the registration of credit providers, credit bureaux and debt counsellors.
Ombudsman for Financial Services Providers
This Ombudsman’s objective is to consider and dispose of complaints by clients against financial services providers. Any act of omission complained about must have occurred on or after 30 September 2004. The complaint must not constitute a monetary claim in excess of R800 000 unless the responding party has agreed in writing to this limitation being exceeded.
Financial Sector Conduct Authority
The mission of this organisation is to ensure that there is a fair and stable financial market, where consumers are informed and protected. This is done through enhancing and supporting the efficiency and integrity of financial markets and customers by promoting their fair treatment by financial institutions, as well as providing financial customers with financial education.
Ombudsman For Long Term Insurance
Established in 1985, this office mediates in matters of insurance contracts. Policyholders who submit a complaint to the Ombudsman may still decide to follow the conventional civil justice process, although these two processes are not allowed to proceed simultaneously. A key requirement to get assistance from this office is that insurance policies should have been marketed or effected in South Africa.
Motor Industry Ombudsman of South Africa
This independent institution resolves disputes where a deadlock has been reached between the motor and related industries and their customers. While the service is free, should it prove necessary that a technical inspection has to be carried out, the complainant will pay the costs incurred during such an inspection.
Ombudsman for Short-Term Insurance
This independent office was established in 1989 and provides consumers with a free, efficient and fair dispute resolution mechanism. Short term insurance disputes undertaken by this office include motor, house-owners (buildings), householders (contents), cell phone, travel, disability, credit protection insurance and commercial insurance on a limited basis.
Tax Ombudsman
This office has been set up to enhance tax administration and provide independent redress channel for taxpayers who have exhausted the normal SARS complaints mechanism. Tax Ombudsman maintains a balance between SARS powers and duties and taxpayer rights and obligations on the other. Tax Ombudsman, therefore, communicates with SARS officials and has access to SARS system and taxpayer information in order to resolve complaints.
Health Ombudsman
The Health Ombudsman operates under the Health Professionals Council of South Africa (HPCSA). This office addresses complaints of miscommunication against health practitioners and determines their nature and validity in line with the Health Professionals Act No.56 of 1974.
Following close in the footsteps of the Legislature is the Court’s interpretation of all these “consumer protection” pieces of legislation.
Since we have moved away from “rules based” interpretation of legislation and adopted the “principle based” reading of our statutes, we see a far bigger impact of “consumer protection” than what was envisaged by the law writers. The “preamble, purpose and application” of any piece of legislation has now become the scapegoat to put more emphasis on “consumer protection”.
The fist of the “principle based” interpretations, and probably the most significant of them all, is the National Credit Act. The initial preamble read as follows:
“To promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information; to promote black economic empowerment and ownership within the consumer credit industry; to prohibit certain unfair credit and credit-marketing practices; to promote responsible credit granting and use and for that purpose to prohibit reckless credit granting; to provide for debt re-organisation in cases of over-indebtedness; to regulate credit information; to provide for registration of credit bureaux, credit providers and debt counselling services; to establish national norms and standards relating to consumer credit; to promote a consistent enforcement framework relating to consumer credit; to establish the National Credit Regulator and the National Consumer Tribunal; to repeal the Usury Act, 1968, and the Credit Agreements Act, 1980; and to provide for related incidental matters.”
The latest National Credit Amendment Act (2019) now reads as follows:
“To amend the National Credit Act, 2005, so as to provide for debt intervention; to insert new definitions; to include the evaluation and referral of debt intervention applications as a function of the National Credit Regulator and to provide for the creation of capacity within the National Credit Regulator and logistical arrangements to execute this function; to include the consideration of a referral as a function of the Tribunal; to provide for the recordal of information related to debt intervention; to require a debt counsellor to investigate whether an agreement is reckless; to provide for a court to enquire into and either refer a matter for debt intervention or make an order related to debt intervention; to provide for a Magistrate’s Court and the Tribunal to determine the maximum interest, fees or other charges when re-arranging debt and for guidance to be prescribed in this regard; to provide for an application for debt intervention and the evaluation thereof; to provide for the Tribunal to re-arrange a consumer’s obligations and make an order in respect of an unlawful credit agreement; to provide for orders related to debt intervention and rehabilitation in respect of such an order; to provide for mandatory credit life insurance; to provide for offences related to debt intervention, prohibited credit practices, selling or collecting prescribed debt and related to failure to register as required by the Act; to provide for measures when an offence is committed by a person other than a natural person; to provide for penalties in relation to the newly created offences; to provide for the Tribunal to change or rescind an order under certain circumstances; to require the Minister to make regulations related to a financial literacy programme; to provide in a transitional provision for the application of this Amendment Act to credit agreements entered into before its commencement; and to provide for matters connected therewith.”
If we compare the two versions, as quoted above, we can clearly see that the aim is to give more power to the Courts to “protect consumers”. The flip side, or balancing act of the rights of “consumer protection” should, in my opinion, be the “protection of the rights of business”. I fail to see any reference being made of the “protection of the rights of business”, in fact, the opposite is true in that the actions of the business, in contravention of the Act, would henceforth be offences - plain language meaning “criminal deads”.
The Courts have often made the statement that the consumer legislation must be interpreted in a manner that gives effect to the “objects”. The referral to the “objects” means the “Objectives” and “Purposes” of the Legislation. Statements like: “Appropriate foreign and international law may also be considered in construing the Acts” have also been made by our senior Judges, trusting they know the demographics of our consumers versus “foreign” and “international” consumers.
The Courts also have to interpret legislation and whilst doing so we have comments like: “Unfortunately, the NCA cannot be described as the “best drafted” Act of Parliament, which was ever passed, nor can the draftsman be said to have been blessed with the “draftsmanship of a Chalmers. Numerous drafting errors, untidy expressions and inconsistencies make its interpretation a particularly trying exercise”. Now with this in mind, the numerous appeals demonstrate the numerous disputes that have arisen around the construction of the NCA. The interpretation of the NCA calls for a careful balancing of the competing interests sought to be protected, and not for consideration of only the interests of either the consumer or the credit provider.
In summary, consumers are the best-protected species found in South Africa, I dare you to prove me wrong. Businesses, you will have to wait for your turn to do business with this protected species on equal “protection” footing.
JH Eugenè Joubert
CP(Int) CMP(Int) MCE(USA) M.Inst.D FICM(SA & UK)
CORPORATE REBELS
eugene@rebels.co.za
www.rebels.co.za