Regulations to Consumer Protection Act

Consumer Protection Act Regulations and Threshold Published on 1 April 2011

Regulations in terms of the Consumer Protection Act 68 of 2008 (CPA) were published on 1 April 2011, by the Minister of Trade & Industry. A copy of the Regulations can be accessed here.
 
The Minister has also published the applicable threshold in terms of section 6 of the CPA. A copy of the notice can be accessed here.
 
The majority of the provisions of the CPA came into effect on 1 April 2011.
 
The Regulations provide important details in relation to the manner in which consumers’ rights under the CPA and suppliers’ corresponding obligations must be implemented.  Key provisions of the Regulations include:
 
·         Criteria for determining when fixed term agreements with individuals may be longer than 24 months and notices that need to be given when these contracts are to be renewed;
·         the replacement of the 10% cancellation fee applicable to fixed term agreements with individuals, with the introduction of criteria for determining a reasonable cancellation fee;
·         changes to the "grey list" of terms and conditions which are presumed to be unfair, unjust or unreasonable (requirements to disclose particular information when selling grey-market or reconditioned goods;
·         A list of contractual terms that will be presumed to be unfair and, accordingly, impermissible in terms of the CPA;
·         Requirements in relation to franchise agreements and the necessary disclosures that franchisors are required to make;
·         Requirements in relation to direct marketing and the steps that direct marketers must take before contacting prospective customers;
·         Requirements in relation to promotional competitions, which will replace the requirements that were previously imposed in terms of the Lotteries Act 57 of 1997 and associated regulations;
·         Disclosure requirements in relation to property syndication schemes;
·         Requirements in relation to auctions;
·         The procedures to be followed by the National Consumer Commission.
 
The threshold in terms of the section 6 of the CPA has been set as R2 million.  As such, the majority of the rights given to consumers in terms of the CPA will not apply to persons that are juristic persons where their asset value or annual turnover exceeds R2 million.  Suppliers of goods and services will not be required to comply with the CPA in their dealings with such customers.  This is with the exception of the product liability provisions of the CPA, which are applicable to all goods, regardless of the size of the entity that buys or uses them. 
 
The Office of Consumer Protection that previously formed part of the Department of Trade & Industry is now the National Consumer Commission.  The Commission’s contact details are as follows: Tel: 0860 266 786 Fax: 0861 515 259