The Consumer Protection Act (CPA) has been set up to protect South Africa’s consumers from unscrupulous businesses. But how can businesses protect themselves against some of the harsher aspects of the Act? GRAEME VICTOR of Du Pont Telecom discusses some of the issues.
As the deadline for the implementation of the Consumer Protection Act (CPA) draws closer, I have seen the demand for telephone recording solutions is growing among all types and sizes of businesses across South Africa. Routine recording of telephone interactions between businesses and their customers will no longer be the preserve of the financial services and direct marketing sectors as was the case in the past.
Du Pont has experienced an upsurge in queries about telephone recording solutions in recent months from businesses across the economic spectrum as they prepare to deal with the impact that the CPA could have on their operations.
I have also found that if a business uses the telephone to interact with customers, it wants an easy and efficient way to record, store and retrieve customer conversations. They want avoid a ‚he said/she said’ situation in the case of disputes between the business and the customer.
Although the purpose of the Act is “to promote and advance the social and economic welfare of consumers in South Africa‚ and spells out the rights of consumers and the responsibilities of suppliers of goods or services, it has been criticised for being ‚an overzealous attempt‚ to protect consumer rights.
The Act revolves around a number of specific consumer rights, including the right to:
Disclosure and information
Fair and responsible marketing
Fair and honest dealing
Fair, just and reasonable terms and conditions
Fair value, good quality and safety.
This is a complex piece of legislation with excellent intentions. It is designed to protect consumers from unfair trade practices while simultaneously promoting consumer empowerment and providing an efficient system of redress for consumers.
Legal experts have warned that some of its provisions are so broad that litigation could become the order of the day and it would not be surprising if some of the first litigation under the Act resulted from telephone interactions ‚ anything from a direct sales/marketing call to dealing with a routine customer query about the features of a product or service.
Penalties for contraventions are severe: if you are found guilty of an infringement ‚ which could include making a ‚misleading’ statement – a business could face an administrative fine of up to R1 million or 10% of annual turnover, whichever is the greater.
Prudent businesses, therefore, are installing voice recording systems that can be used as evidence in disputes.
Customers, of course, must be warned that their conversation is being or will be recorded. However recording all conversations is the best way a business will be able to protect itself against frivolous or malicious litigation.