- Consumer’s right to choose suppliers
Suppliers are not allowed to make the purchase of goods or services conditional on the purchase of additional goods and services from a specified supplier.
A supplier could sell a photocopier to the consumer at a bargain price with a maintenance contract (from the supplier or a related company) as a ‘compulsory’ add-on (at an inflated price).
The consumer is tricked into what seems like a good deal, but the compulsory ‘add-ons’ make it a bad deal.
- The bundling of goods might be permitted when the convenience and cost benefit to the consumer justifies the bundling. (For example, an expensive cellular telephone bundled with a 24-month mobile contract could justify the bundling).
- Bundling is also allowed if the consumer is given the option of buying each of the components separately (to mix and match at will).
- It would not be unreasonable for a bank lending money to a consumer to insist that the consumer has sufficient credit life insurance, but forcing the consumer to use a specific life insurer is forbidden.
- Expiry and renewal of fixed term agreements
The Act prohibits so called ‘ever-green’ contracts which automatically renew for another term if consumer forgets to give notice in time.
A television rental contract may have stipulated a term of 5 years and if the consumer did not give notice of termination 60 days before the end of the contract, it automatically renewed for another 5 years, and so on.
- In terms of the Act the supplier is now obliged to give the consumer a reminder at least 40 days (but not more than 80 days) before expiry.
- If the consumer forgets to give the notice, the contract simply reverts to a month to month agreement which the consumer can cancel at any time by way of 20 business days notice.
- Pre-authorisation of repair or maintenance services
Before proceeding with repairs, a service provider must get the consumer’s approval in a ‘recorded manner’ for the cost of the repairs.
- If the repairs exceed the quoted amount then this additional cost cannot be charged unless the consumer agrees to it.
The service provider may not charge for the cost of preparing the quote, unless the consumer has agreed in advance to that quote cost.
- Consumer’s right to cooling-off period after direct marketing
The consumer has the right to reverse any purchase arising from direct marketing within five business days of
- Concluding the transaction or
- From the time the goods were delivered,
Whichever is the later. The supplier may not penalise the consumer. However, the cost of returning the goods must be carried by the consumer and if the goods are damaged in transit then that cost is born by the consumer.
- The consumer has the right to cancel an advance reservation, booking or order
- This does not apply to any special-order goods.
- The supplier can apply a reasonable cancellation charge (the supplier cannot impose an unreasonably heavy penalty on the consumer).
- No cancellation charge may be applied if the cancellation is due to the consumer’s hospitalisation or death.
- Consumer’s right to choose or examine goods
- If the consumer purchased the goods based on the supplier’s description then that description needs to be materially accurate and complete. If it is not, then the consumer can choose to cancel the transaction. The cost of returning the goods must be carried by the supplier and if the goods are damaged in transit then that cost is born by the supplier.
- A consumer cannot be made to pay for damage to shop displays unless the damage is intentional or caused by gross negligence.
A supplier displaying the following notice
“Nice to look at, nice to hold, but if it is broken, consider it sold.”
would not be able to force a consumer to pay up if her little Johnny accidentally broke something.
- Consumer’s rights with respect to delivery of goods or service
It is an implied condition with every transaction that the goods will be delivered at the agreed date, time and place.
- The delivery costs are for the supplier’s account unless otherwise agreed.
- Until the goods have been delivered they remain the supplier’s risk.
If they are lost or damaged at any time before the consumer accepts delivery, they must be replaced at the supplier’s expense.
- When the goods are delivered the consumer must be given reasonable opportunity to
- examine the goods and
- ensure that they are of the type and quality agreed to.
- If the supplier delivers the wrong goods or the wrong quantity, the consumer can
- reject the entire order or
- retain and pay for that portion of the goods that are correct.
The cost of returning the rejected goods must be carried by the supplier and if the goods are damaged in transit then that cost is born by the supplier.
- Consumer’s right to return goods
- If the consumer explained their needs to the supplier and the supplier provided goods which were unsuitable for those purposes, then
- the consumer has 10 business days after delivery to notify the supplier,
- the cost of returning the rejected goods must be carried by the supplier, and
- if the goods are damaged in transit then that cost is born by the supplier.
The consumer needs a coffee maker, for her B&B, that will produce 30 cups of coffee per day. The machine recommended by the supplier proves to be unsuitable for more than 20 cups per day. Provided the consumer reports this within 10 days, the consumer would be able to insist on returning the machine for a full refund.
- This does not apply if the goods have been permanently installed or consumed in some way
- When goods are returned the consumer must be refunded the cost of the product less a reasonable amount necessary to return the goods to a condition where they can be sold to another customer.
- Unsolicited goods or services
The consumer is allowed to keep unsolicited goods or services without paying for them.
- Goods are considered to unsolicited if
- A supplier provides goods or services not asked for.
This would typically be part of a direct marketing initiative
- A supplier were to materially deviate from its agreement with a consumer, those goods might also become unsolicited.
- The supplier
- Has 10 business days to notify the recipient that the goods were delivered by mistake, thereafter the supplier
- must remove the goods within 20 business days, otherwise they become unsolicited.
- The recipient must not frustrate the efforts of the supplier to recover the goods.
- The supplier must carry the cost of recovering the goods.
- If it is obvious that the goods were accidentally delivered to the wrong address, then they are not unsolicited.
Right to disclosure and information
- Right to information in plain and understandable language
All documents, notices, advertisements and instructions must be written in plain language.
- Disclosure of price of goods or services
A retailer is not allowed to display goods for sale without also displaying the price.
- The consumer can insist on paying the marked price and nothing more.
- If more than one price is displayed the lower amount must be charged.
- If the supplier has made an obvious mistake the supplier is not bound to that displayed price once he corrects it and takes steps to inform customers.
- If the supplier advertises a discount off the price then the consumer can insist on that discount off the market price. In other words, the supplier cannot claim that the marked price already includes the discount (unless that is specifically what the advert says).
- If goods merely form part of an advertisement, then displaying the price is not compulsory.
- Product labelling and trade descriptions
Consumers have a right to products that are labelled properly and that are not misleading.
- A supplier may not supply or advertise goods if the supplier has any reason to suspect that the product label is likely to mislead consumers as to what the product is.
- Information that that needs to be communicated to consumers includes the country of origin of the goods, if it has been genetically modified as well as the ingredients.
- Disclosure of reconditioned or grey market goods
If the goods are:
- not new but are reconditioned or
- if the goods are “parallel” imports (imported without the approval of the official agents)
then these facts must be brought to the consumer’s attention before they make the purchase.
The supplier must provide the consumer with a written record of all transactions.
- This does not apply to some transactions conducted through a call centre.
- The record must contain information such as
- the supplier’s details,
- the transaction date,
- a description of the goods or services,
- the quantity,
- the price and
- applicable tax.
- Disclosure of intermediaries
When someone acts as an intermediary they are legally obliged to make certain disclosures to the person they represent as well as to the purchaser.
- Identification of deliverers, installers and others
When someone represents the supplier for deliveries, installations or is doing direct marketing in person, they must wear suitable identification.