Monday, 21 March 2011

South Africa’s e-businesses are preparing for new Consumer Act

South Africa is preparing for a new consumer protection regime, since the Consumer Protection Act (CPA) is set to come into force on 1 April 2011.

The CPA, which was signed into law in April 2009, “is not just another Act,” said Gerrie Van Gaalen, Partner at Van Gaalen Attorneys. “It will ensure that suppliers deal with consumers without withholding important information.”

The CPA sets out strict rules for businesses and creates a number of consumer rights, such as the right to inspect goods and the right to information. Fixed-term agreements will have to be in ‘plain and understandable language’ and courts will get the power to redraft consumer contracts.

“The CPA will oblige e-commerce sites to abandon the practice of providing bare minimum or often just generic information about items, stock availability and delivery terms,” said Godfrey Parkin, CEO of Britefire. “And businesses will now have to take the privacy and security of customer data very seriously.”

Many e-businesses are in the process of reviewing the text of standard agreements, terms and conditions, and are rethinking the wording of their marketing. “They are also scurrying to try to get their mailing lists in order, since South Africa has never had anti-spam legislation with any teeth,” said Parkin. “There is a lot of scrambling taking place to try to be compliant before 1 April.”

This is not a surprise since “failure to comply could lead to jail time or a fine, which could be as much as R1 million, or 10% of annual turnover, whichever is greater,” explains Simone Monty, Partner at Eversheds.

Published previously in E-Commerce Law & Policy, March 2011. Copyrights apply.