Consumer Protection under the Consumer Protection Act, 2018 (CPA)

The CPA applies to all commercial transactions, including electronic commercial transactions. The CPA and the Electronic Communications Transactions Act, 2002 (ECTA Act) provide protection to consumers in commercial transactions. CPA and ECT Act must be read concurrently and where there is conflict, the CPA provides that the Act which affords a consumer the most protection will prevail.

The CPA provides 8 fundamental consumer rights as set out below:

  • Right of equality in the consumer market;

  • Right to privacy;

  • Right to choose;

  • Right to disclosure and information;

  • Right to fair and responsible marketing;

  • Right to fair and honest dealing;

  • Right to fair, just and reasonable terms and conditions; and

  • Right to fair value, good quality and safety.

Obligations under the CPA include:

  • a requirement to provide details of the goods or services in a plain language that the consumer can understand;

  • a requirement to offer goods or services in its business name or the clients name;

  • a requirement to have a written record of transaction of goods and services supplied;

  • a requirement to disclose reconditioned or grey market goods;

  • a requirement to inform the consumer of their right to cancel a direct marketing agreement;

  • a requirement to notify the consumer of any agreement terms that limit their liability, and places liability on the consumer or requires the consumer to indemnify the advertiser.

The CPA prohibits the following:

  • making false, misleading or deceptive representations about the supplier or any goods or services unless they have reasonable grounds for believing that the representation is correct;

  • sending unsolicited goods;

  • intentionally using a misleading trade description or alter, deface, cover, remove or obscure a trade description;

  • bait marketing, where the consumer is misled regarding the actual availability or the price of goods and services;

  • creating fraudulent or pyramid schemes and offers;

  • making false, misleading or deceptive representations about the nature, properties, advantages or uses of the goods and services;

  • offering to supply any goods and services at a price that is unfair, unreasonable or unjust or market any goods or services in a way that is unfair, unreasonable or unjust;

  • over selling or over booking;

  • using physical force, undue influence, unfair tactics, etc, in marketing, negotiating, suppling goods and services or collecting payment;

  • taking advantage of physical or mental disability, illiteracy, ignorance or inability to understand language;

  • negative option marketing, where the consumer is informed that the sale agreement will come into being or the agreement will be modified unless the consumer informs the supplier that the consumer does not wish to proceed with the agreement;

  • pretending that the customer has won some competition;

  • making a promotional offer with no intention of fulfilling it;

  • offering participation in a customer loyalty programme with no intention of providing it;

  • making a false representation regarding the availability or profitability of work or business;

  • referral selling, where the supplier markets a services or goods on that basis that the consumer will subsequently help the supplier to do business with other customers; and

  • direct marketing.

Direct Marketing

The CPA addresses direct marketing and acknowledges that it has become a problematic practice. A consumer has the right to refuse to accept any marketing communication and once any marketing communication is received, the consumer may request that the marketer send no further communication be sent. Furthermore, marketers and advertisers must ensure that their communications contain an “unsubscribe” option. Regulation 293 to the Act sets out mechanisms to block unwanted direct marketing. Consumers have the option of registering a pre-emptive block against the company in terms of Regulation 293 and such a block is effective within 30 days. This is a registered pre-emptive block in a national registry set up by the National Consumer Commission. Marketers and advertisers can call to enquire whether any pre-emptive blocks are registered against them.