DATE DOWNLOADED: Wed Jul 20 00:31:02 2022

SOURCE: Content Downloaded from HeinOnline

Citations:

Bluebook 21st ed.

Tanya Woker, Consumer Protection: An Overview Since 1994, 30 Stellenbosch L. REV. 97
(2019).

ALWD 7th ed.

Tanya Woker, Consumer Protection: An Overview Since 1994, 30 Stellenbosch L. Rev. 97
(2019).

APA 7th ed.

Woker, T. (2019). Consumer protection: an overview since 1994. Stellenbosch Law
Review, 30(1), 97-115.

Chicago 17th ed.

Tanya Woker, "Consumer Protection: An Overview Since 1994," Stellenbosch Law Review
30, no. 1 (2019): 97-115

McGill Guide 9th ed.

Tanya Woker, "Consumer Protection: An Overview Since 1994" (2019) 30:1 Stellenbosch L
Rev 97.

AGLC 4th ed.

Tanya Woker, 'Consumer Protection: An Overview Since 1994' (2019) 30(1) Stellenbosch
Law Review 97

MLA 9th ed.

Woker, Tanya. "Consumer Protection: An Overview Since 1994." Stellenbosch Law Review,
vol. 30, no. 1, 2019, pp. 97-115. HeinOnline.

OSCOLA 4th ed.

Tanya Woker, 'Consumer Protection: An Overview Since 1994' (2019) 30 Stellenbosch L
Rev 97

Provided by:
University of the Free State Library

-- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and
Conditions of the license agreement available at
https://heinonline.org/HOL/License
-- The search text of this PDF is generated from uncorrected OCR text.
-- To obtain permission to use this article beyond the scope of your license, please use:
Copyright Information
CONSUMER PROTECTION: AN OVERVIEW
SINCE 1994

Tanya Woker
BA LLB LLM PhD
Professor of Law, University of KwaZulu-Natal (Durban)

1 Introduction
The late President Mandela's vision for South Africa was to create a people-
centred society that pursued certain goals regarded as fundamental to human
dignity: freedom from want, hunger, deprivation and fear.1 He also saw
the need to protect consumers from unscrupulous business practices and he
committed the government to introducing consumer protection measures.2
South Africa now has a Constitution (the Constitution of the Republic of
South Africa, 1996 ("Constitution") that is celebrated internationally because
it recognises that economic and social rights are just as important as civil and
political rights. As pointed out by Liebenberg:
"Without material security and the means 3
to a dignified life, many of the civil and political freedoms
in the Bill of Rights will ring hollow."

These rights are not just "nice-to-have" ideas. They are legally enforceable
rights and the government is required to take reasonable steps to ensure that
the right to healthcare, food, housing, water and social security are realised
and protected .
Since the early days of the newly installed democratic government in 1994,
substantial measures have been introduced to promote and advance the social
and economic welfare of South Africans. The most significant include the
Competition Act 89 of 1998, the National Credit Act 34 of 2005 ("NCA"), the
Consumer Protection Act 68 of 2008 ("CPA") and most recently the Financial
Sector Regulation Act 9 of 2017 ("FSR Act") which became operative on 1
April 2018. 5 The FSR Act aims to transform the financial services sector
and provide further and better protection for consumers from unacceptable

N Mandela "State of the Nation Address by President of South Africa, Nelson Mandela, Cape Town"
(24-05-1994) Nelson Mandela <http://www.mandela.gov.za/mandelaspeeches/1994/940524_sona.htm>
(accessed 05-07-2018).
2 Mandela "State of the Nation Address by President of South Africa, Nelson Mandela, Cape Town" (24-
05-1994) Nelson Mandela.
S Liebenberg "South Africa has a model bill of rights. But it doesn't feel that way" (16-03-2017) The
Conversation <https://theconversation.com/south-africa-has-a-model-hill-of-rights-but-it-doesnt-feel-
that-way-74457> (accessed 04-07-2018).
Liebenberg "South Africa has a model bill of rights. But it doesn't feel that way" (16-03-2017) The
Conversation.
See EY "Financial Sector Regulation Act: Implementing Twin Peaks and the impact on the industry"
(2018) EY <https://www.ey.com/Publication/vwLUAssets/ey-financial-sector-regulation-act-twin
-peaks/SFILE /ey-financial -sector-regulation-act- implementing-twin-peaks-and-the-impact- onthe-
industry.pdf> (accessed 31-07-2018).
 STELL LR 2019 1

conduct by financial service firms. 6 It also aims to support balanced and

sustainable economic growth in South Africa. The Financial Services
Regulatory Authority (the "FSRA") has been established 7
and its role is to
regulate the conduct of financial services businesses.
There are now a host of measures designed not only to promote consumer
welfare but also to ensure that the welfare of society as a whole is improved.8
When the CPA came into operation on 1 April 2011, many hailed South
African consumers as being the best protected consumers in the world.9
Unfortunately, the reality in South Africa is somewhat different and a
marketplace that embodies fair competition with a high degree of recognition
and respect for consumer rights remains a distant dream for the majority of
consumers. 10
There is no doubt that the government has faced and continues to face a
formidable task. The apartheid legacy of poverty, high levels of illiteracy,
socio-economic inequalities and widespread human rights abuses (including
consumer rights abuses) made this task a daunting one. This article will
highlight just some of the problems that consumers face. In a modern society
having access to goods and services is an important part of life and when
consumers are denied their rights, this leads to frustration and sometimes
even violent protests, as recent service delivery protests have demonstrated."
An important aspect of consumer protection is access to justice, so the article
will highlight some recent court decisions as well as some of the decisions

In terms of the Financial Services Laws General Amendment Act 45 of 2013, which came into operation on
28 February 2014, the long-term and short-term insurance industry, the pension fund industry, collective
investment schemes and securities are exempt from the operation of the CPA. This is because many of the
provisions of the CPA cannot be applied appropriately in the financial sector and because there is a need
for even greater protection for consumers in this sector. Hence, the introduction of the FSR Act.
7 There is definitely an overlap between the NCA and the FSR Act as both regulate market conduct in
the
credit market. The FSR Act requires financial sector regulators (such as the Pension Fund Adjudicator,
the FSCA, the Financial Intelligence Centre and the National Credit Regulator), together with the South
African Reserve Bank, to co-operate and collaborate when performing their functions in terms offinancial
sector laws such as the NCA and the Financial Intelligence Centre Act 38 of 2001. In order to facilitate this
co-operation the FSR Act establishes the Financial System Council of Regulators ("FSCR"). The FSCR is
a forum in which the different financial sector regulators can address industry-wide concerns and ensure
that there isconsistency in action between the different financial sector regulators. The FSR Act sets the
scene for the phasing out of industry-specific legislation and lays the foundations for the adoption of new
financial sector legislation such as the Conduct of Financial Institutions Bill, the Special Resolution Bill,
the Insurance Bill and the Financial Sector Levies Bill.
E van Eerden & J Barnard Consumer Protection Law in South Africa 2 ed (2017) 11.
9 See eg, G Stokes "A good decade for South African consumers" (13-02-2012) Fanews <https://www.
fanews.co.za/article/talked-about-features/25/straight-talk/ 146/a-good-decade-for-south-african-
consumers/I 1458> (accessed 02-08-2018).
'o In T Woker "Why the need for Consumer Protection Legislation? A Look at some of the Reasons Behind
the Promulgation of the National Credit Act and the Consumer Protection Act" (2010) 31 Obiter 217-231, 1
stated that the next question which needed to be discussed is whether the NCA and the CPA would actually
achieve their aims of providing consumers with appropriate protection in today's highly sophisticated
market (231). The answer to that question was left for another day.
Groundup "We burn tyres and damage roads to force the City to give us basic services, but it continues to
neglect us" (22-06-2018) Groundup <https://www.news24.com/SouthAfrica/News/we-burn-tyres-and-
damage-roads-to-force-the-city-to-give-us-basic-services-but-it-continues-to-neglect-us-20180621>
(accessed 04-07-2018).
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 99

of the National Consumer Tribunal ("Tribunal") that has been established

12
specifically to ensure that consumers have speedy access to justice.

2 Progress to a fair marketplace

Consumer protection legislation aims to promote fair business practices,
eliminate unfair practices, deceptions and fraud and provide consumers with
effective access to redress. 13 The legislation also provides added protection for
the more vulnerable in society.
It must be acknowledged that it is very difficult to measure the level at
which consumer protection laws are actually making a difference in the
marketplace. According to Consumers International ("CI"), the impact of
consumer protection legislation reform remains unknown generally. The laws
are often not enforced and, sometimes, complex laws result in unintended
4
consequences.' The plethora of cases that have resulted since the introduction
of the NCA indicates that attempting to strike a balance between 15
consumer
protection and promoting the economy is not easy to achieve.
In recent years there have been some spectacular failures in consumer
protection which affected large groups of consumers and not just individuals.16
The level of debt amongst South African consumers has spiralled alarmingly,

12 The Tribunal was established in terms of s 26 of the NCA. Its powers and functions are set out inthe
NCA and its mandate was increased when the CPA came into operation on I April 2011. The Tribunal
adjudicates primarily over conduct that isprohibited in terms of either the CPA or the NCA.
13 See in particular s 3 of the CPA and s 3 of the NCA. Section 7 of the FSR Act provides that the object of
the FSR Act is to achieve a financial system that works in the interests of financial consumers. The FSR
Act also seeks to promote the fair treatment of consumers.
Consumers International A guide to developing consumerprotection law (2011) 12. This is particularly
true when it comes to accessing credit. The NCA promotes responsible lending and consumers who cannot
afford to repay their loans should not have access to credit. However, consumers who are struggling
financially may turn to unlawful, unregistered credit providers, also referred to as mashonisa. These
lenders often charge exorbitant interest and fees and have questionable collection practices. See Credit
Ombud Media Release "Warning all consumers! beware the signs 'blacklisted consumers welcome"
it could be a trap!" (01-10-2016) MFSA <http://www.mfsa.net/wp-content/uploads/2016/07/Media-
ReleaseCredit-Ombud Warning-ConsumersOctober.pdf> (accessed 02-08-2018).
See eg, FirstRandBank Ltd t/a First National Bank v Seyffert and Three Similar Cases 2010 6 SA 429
(GSJ) para 10. In Mercedes Benz FinancialServices South Africa (Pty) Ltd v Dunga 2011 1 SA 374
(WCC), Blignault J described the NCA as "notorious for its lack of clarity" (para 17). In Renier Nel Inc
v Cash on Demand (KZN) (Pty) Ltd 2011 5 SA 239 (GSJ) para 15, Willis J stated that "[i]t has become
a notorious fact that cases requiring the interpretation of the NCA resulted in a scarcely muffled cry of
exasperation resounding from the leathered benches of the judiciary".
16 B Nortje "Unsecured lending ticks like a time bomb" Sunday Times Business Opinion (12-08-2018) 9;
D van Rensburg "Don't be fooled, there is a credit problem" (07-01-2018) Fin 24 <https://www.fin24.
com/Money/Debt/dont-be-fooled-there-is-a-credit-problem-20180107-2> (accessed 31-07-2018). South
African Press Association "Half of SA is over-indebted" (2015) Independent Online <http://www.iol.
co.za/business-report/economy/half-of-sa-is-over-indebted-sahrc-1830518> (accessed 02-08-2018).
The labour unrest at the Marikana mine in 2012, which led to the deaths of mineworkers at the hands
of the South African Police Service, was attributed to the debt woes of mineworkers. Mineworkers
found that virtually all their monthly earnings were attached to satisfy debts on loans that had been
granted recklessly. See M Bateman "Microcredit and Marikana: how they are linked" (2012) The Star
<http://sbeta.iol.co.za/the-star/microcredit-and-marikana-how-they-are-linked-1385126> (accessed
02-08-2018); R Davies "The debt-hole that fuelled the fire" (12-10-2012) Daily Maverick <https://www.
dailymaverick.co.za/article/2012-10-12-marikana-the-debt-hole-that-fuelled-the-fire/#.WjZxD9-Wa70>
(accessed 02-08-2018).
 STELL LR 2019 1

the Life Esidimeni tragedy sent shock waves throughout South Africa, 17 the
social grant system lurches from one crisis to the next,' 8 and South Africa
faced the world's deadliest outbreak of listeriosis. 19
Even before the CPA became fully operational in 2011, the Minister of
Trade and Industry realised that many municipalities would not be able to
meet the requirements set out in the CPA and he issued a notice exempting
small, middle and low capacity municipalities from having to comply with
the Act.20 This is service delivery at its most basic level and impacts on
the lives of the most vulnerable consumers in South Africa. South Africa is
plagued by service delivery protests as consumers complain about a lack of
access to water, sanitation, housing and electricity whilst their counsellors
appear to live luxurious lifestyles. 2 1 On a less fundamental level, consumers
frequently report frustration with the level of knowledge and compliance
amongst suppliers. Anecdotal evidence suggests that it is impossible to cancel
a Telkom contract despite section 14 of the CPA, 2 2 and the refunds offered by
South African Airways when a consumer tries to cancel an advance booking
in terms of section 17,23 are non-existent or laughable. Both these entities are
state owned and yet both appear to be blissfully unaware of (or have no regard
for) the requirements of the law.
Nevertheless, there is some evidence that the South African business
community is slowly coming to terms with the concept of consumer protection
and it is generally accepted, in the formal market at least, that it is no longer
business as usual. 24 Some examples include changes to contract terms,
disclosure of information to enable consumers to make informed decisions,
the introduction of more fair returns policies and policies dealing with the
cancellation of advance bookings. A violation of consumer rights carries the
risk of serious reputational damage and there is always the possibility that

" See In the Arbitration between: Families of Mental Health Care users affected by the Gauteng Mental
Marathon and the Minister of Health in the Republic of South Africa <http://www.saflii.org/images/
LifeEsidimeniArbitrationAward.pdf> (accessed 02-08-2018).
18 N Ngubane "I have no food at home" says grant recipient following Post Office Glitch" (06-07-2018)
GroundUP Newsletter <https://www.groundup.org.za/article/i-have-no-food-home-my-grandchildren-
have-eat-says-grant-recipient-following-post-office-glitch/> (accessed 06-07-2018).
i9 K Child "Listeriosis in Enterprise Factory: its everywhere" (07-03-2018) Timeslive <https://www.
timeslive.co.za/news/south-africa/2018-03- 07-listeriosis-in-enterprise-factory-its-everywhere/>
(accessed 05-07-2018).
20 See GN 221 in GG 34116 of 14-03-2011 and GN 898 in GG 34724 31-10-2011. GN 898 repealed GN 221
and GN 898 was set aside by Afriforum v Minister of Trade and Industry 2013 4 SA GNP on 12 March
2013, effective 30 days after the order.
21 N Gous "Citizens are doing govt's work but is this the right thing" (06-07-2018) Times Select Daily
Edition<timeslive.co.za> (accessed 06-07-2018).
22 Section 14 gives consumers the right to cancel fixed term agreements subject only to a reasonable
cancellation penalty. For an example of consumer complaints, see Telkom "Business Products and
Services (undated) Telkom <https://community.telkom.co.za/t5/Business-Products-Services/Can-t-
Cancel-Telkom-Read-Here/td-p/16270> (accessed 30-10-2018).
In terms of s 17 consumers have the right to cancel an advance booking subject only to a reasonable
cancellation fee. For an example of consumer complaints, see Hellopeter "Refund SAN'(23-10-2018)
Hellopeter <https://www.hellopeter.com/saa/reviews/refund-saa-2605226> (accessed 30-10-2018).
24 T Woker "Consumer Protection and alternative dispute resolution" (2016) 28 SA Merc LI21-48.
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 101

service providers will be referred to the Tribunal for a hearing into prohibited
conduct.25
The NCA regulates the entire credit market, from small micro lenders
26
such as mashonisas to the large banks. The National Credit Regulator
27
("Regulator") has investigated many credit providers; some have been
charged with reckless credit lending 28 whilst others, usually micro-lenders,
have had their registration cancelled.29
The CPA is a comprehensive statute that covers virtually every type of
business activity in South Africa, from taxi driving to legal practice; from the
fitness industry to hairdressing salons. One of the more interesting examples
presented recently regarding how and when the CPA applies referred to the
performance of a soccer team. It was argued that soccer teams are in the
business of providing entertainment for which consumers pay. Consumers
are therefore entitled to quality service and poor quality service may include:
* cancellation of a scheduled match;
* avoidable delay in starting a soccer match; and
* failure to perform in a manner and quality that persons are generally
entitled to expect.
Failure to provide quality service, including not performing properly
in a match, is prohibited conduct under the CPA, 3 1 which could lead to an
administrative fine of 10% of annual turnover. This may be a wonderful
incentive to ensure that South African sports teams up their game!
The fact that the Tribunal is able to impose considerable fines on recalcitrant
suppliers of goods and services is what gives the NCA and the CPA their teeth
and the threat of a fine has proved to be a powerful incentive for settlement

5 Both the NCA and the CPA introduce the concept of"prohibited conduct". Prohibited conduct isdefined
as any act or omission in contravention of the NCA or CPA (see s I of the NCA and s I of the CPA-
the definition sections). When a supplier is engaging in such conduct, the matter can be referred to the
Tribunal for a hearing and the Tribunal is empowered to impose an administrative fine of RI million or
10% of annual turnover (s 151 of the NCA).
16 The five biggest banks in South Africa are Standard Bank, First Rand Bank, Absa, Nedbank and Investec.
In terms of the NCA, all credit providers are required to register with the Regulator (s 14) and the
Regulator may apply to the Tribunal for cancellation of registration (s 57) if a credit provider is found to
have repeatedly contravened the NCA.
27 The Regulator has been established in terms ofs 12 of the NCA. Its primary functions include to develop
and regulate an accessible credit market in South Africa and to enforce the NCA. See ch 2, part A of the
NCA.
2 In 2013 African Bank agreed to pay an administrative fine of R20 million for reckless lending. See Fin24
"African Bank fined R20m forreckless lending" (03-10-2013) Fin24 <https://www.fin24.com/Companies/
Financial-Services/African-Bank-fined-R20m-for-reckless-lending-20131003> (accessed 08-10-2018);
National Credit Regulator v Shoprite Investments LtdNCT 05-09-2017 case no 32946/2015/140(l). In this
matter, the Tribunal fined Shoprite Checkers RI million for reckless lending in that it failed to conduct
sufficient checks to establish whether consumers could afford the repayments on loans obtained from
Shoprite Checkers. See also National Credit Regulator v A-Z Micro Loans CC NCT 28-02-2018 case no
78949/2017/57.
29 See eg, National Credit Regulator v Werlan Cash Loans t/a Lebathu Finance NCT 13-02-2013 case no
3867/2012/57(1); National Credit Regulator v Season Star Trading 333 CC t/a De Noon's Cash Loans
NCT 21-11-2013 case no 6977/2012/57(1)(P) and National Credit Regulator v Self Discovery Cash and
Marketing CC NCT 09-01-2018 case no 71714/2016/140(l).
MNS Attorneys "The Consumer Protection Act: Quality Service" (02-02-2016) MNS Attorneys <https://
mnsattorneys.co.za/legal_discourse/consumer-protection-act-quatity-service/> (accessed 05-07-2018).
31 See s 54 of the CPA.
 STELL LR 2019 1

negotiations. Section 54 of the CPA appears to be a relatively innocuous

section in that the penalties within the section are quite limited. Consumers
who receive poor service are entitled to a refund of a portion of the fees that
they were charged for the service, or they may insist on having the goods
repaired properly. However, a failure to provide quality service is prohibited
conduct. A finding by the Tribunal that a service provider such as a motor
vehicle dealer engaged in prohibited conduct in that it provided poor service
to a consumer not only carries the threat of reputational damage, there is also
the risk that the Tribunal may impose a large penalty. 32 In NCC v Highends
Trading and Projects (Pty) Ltd t/a Highends Auto Services,33 the Tribunal
imposed a fine of R150 000 on an auto repair business for failing to repair
a consumer's vehicle. This fine was suspended for a period of 90 days on
condition that the vehicle was restored to a roadworthy condition.
The Tribunal has also dealt with a significant number of consent orders for
consumers who are debt stressed.34 Since commencing with this process in
2015, the Tribunal has issued 56 485 consent orders in debt re-arrangement
matters. 35 Debt counsellors approach the Tribunal with debt re-arrangement
plans rather than the magistrates' court because this is a much more cost-
effective option for consumers. When debt counsellors first referred matters
to the Tribunal many credit providers opposed the process but are now far
more willing to negotiate debt re-arrangement plans.
The recognition of two ombuds under section 82 of the CPA has also
increased consumer access to redress. 36 The two ombuds are the Motor
Industry Ombud of South Africa ("MIOSA") and the Consumer Goods
and Services Ombud ("CGSO"). Both these ombuds deal with a substantial
number of consumer complaints. 37 The Consumer Goods Council and its
members fully support the appointment of the CGSO. 38 MIOSA deals with

See NCC v Western Car Sales CC t/a Western Car Sales NCT 14-09-2017 case no 81554/2017/73(2)(b)
where the Tribunal imposed an administrative fine of R100 000 on a car dealer who sold a defective
vehicle.
33 NCT 27-07-2018 case no 101932/2018/73(2)(6).
34 In terms ofs 86 (7) (b) ofthe NCA debt counsellors may facilitate debt re-arrange plans for debt stressed
consumers which may then be made an order of the Tribunal in terms ofs 138(1).
35 The Tribunal provided this information in email correspondence dated 06-07-2018 (copy on file with
author).
36 The correct term is ombudsman derived from the Old Norse word "umbodhsmadhr" that means "trusty
manager". It is has been incorrectly assumed that the ending "man" refers to a male person hence the South
African legislature adopted the word ombud as a term which is gender neutral. However the ending has
nothing to do with gender and there are many highly regarded ombuds who are women.
17 Section 82 provides that the Commission, acting on its own or in response to a proposal
from persons
conducting business within a particular industry, may recommend a proposed industry code to the
Minister. The code must first be published for public comment and persons conducting business within
the relevant sector and relevant accredited consumer protection groups must be consulted. The proposed
code must also be consistent with the purposes and policies of the Act. Ifthe code provides for a scheme
of ADR and the Commission considers that the scheme is adequately situated and equipped to provide
ADR services comparable to those generally provided in terms of any public regulation, the Commission
when recommending that code to the Minister may also recommend that the scheme be accredited as an
accredited industry ombud. This code then becomes the recognised standard for the industry and disputes
relating to the industry will be referred to that ombud for resolution.
38 The Consumer Goods Council was established in 2002. It has more than 12 000 members from the retail,
wholesale and manufacturing sectors. Members include Premier Foods, Pioneer Foods, Massmart, Pick
n Pay, the JD Group, Shoprite, Nestld, Lewis Stores, Unilever, Spar, Woolworths and Rainbow Chicken
(CGCSA Annual Report (2012)).
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 103

complaints against manufacturers, importers, and dealers of motor vehicles

39
and has been assisting the Commission with disputes since 2013. Three
further codes have been published for public comment. These are codes for
sector, the advertising industry, and the funeral industry.
the franchise

3 Effective consumer protection - a three-pronged approach

Effective consumer protection relies on a three-pronged strategy: consumers

must have knowledge of their rights, consumers must have access to redress,
and the law must be enforced.43

3 1 Knowledge of consumer rights

Consumer protection legislation has been introduced primarily to protect

the interests of the poor, the vulnerable and the less literate. 44 But, if these
consumers are unaware of their rights they will remain vulnerable and easy
prey for exploitation in the marketplace.
In 2017, the Tribunal dealt with an application by the Regulator to cancel
the registration of Self Discovery Cash and Carry CC, a micro lender. 45 The
Tribunal found that many of this lender's practices were in contravention of
the NCA; its employees were oblivious to their responsibilities under the NCA;
and it used documents, which consumers were required to sign, but which its
employees did not understand.46 From the evidence before the Tribunal, it
was clear that the employees were not in a position to explain anything to its
consumers who often found that their salaries were subjected to emoluments
attachment orders ("EAOs") and they had no idea why these deductions were
being made.47
An important factor about consumer protection is that consumers have to
claim their rights - they do not just happen. It is a serious challenge in South
Africa to ensure that consumers are sufficiently educated about their rights in
order to be able to claim them.48

3 Information regarding MIOSA is available at <http://www.moisa.co.za> and information regarding

CGSO is available at <www.cgsa.co.za>.
40 Industry Code for the Franchise Industry of South Africa GN 33 in GG 39631 of 05-02-2016.
4' National Consumer Commission GN 449 in GG 40159 of 26-07-2016.
42 Regulations relating to children: Amendment GN 978 in GG 40243 of 02-09-2016.
43 For a three-pronged approach that focusses on public enforcement bodies, judicial mechanisms and
out-of-court redress schemes see P Cortes "Enforcing EU Consumer Policy More Effectively: A Three-
Pronged Approach" in S Drake & M Smith (eds) Effective Enforcement of EU Law and Policy (2015).
4 This is a specific aim of the CPA (see s 3 (b)).
4' NCR v SelfDiscover Cash and Marketing CC NCT 09-01-2018 case no 71714/2016/140 (1).
46 Para 102.
17 In terms of s 80 of the NCA it is reckless lending to enter into a credit agreement with a consumer who
does not understand the risks, costs or obligations involved. The issue of unlawful EAOs is an ongoing
problem in South Africa, led to the Marikana tragedy in 2012 and was the subject of a Constitutional
Court decision in University of Stellenbosch Law Clinic v Minister of Justice and Correctional Services
2016 6 SA 396 (CC).
4' For information regarding the work done by the FSB (now the FSCA) to improve financial literacy in
South Africa see L Clarke "Consumer Empowerment through financial literacy and financial capability
initiatives" (undated) FinancialServicesBoard<https://www.fsb.co.za/Departments/consumerEducation/
Documents/B usiness%20Conduct%20and%2OConsumer%2Protection%20Presentation.pdf>(accessed
on 25-10-2018). See also S Sibanda & T Sibanda "Financial Education in South Africa: overview of key
initiatives and actors" (2016) International Labour Office <https://www.ilo.org/wcmsp5/groups/public-
 STELL LR 2019 1

South Africa has a history of inequality. This has led to a divided economy
and a society that is one of the most unequal in the world. South Africa was
once described as having two economies. 49 On the one hand, there is a modern
first world industrial, mining, agricultural, financial, and services sector and
on the other, a third world economy, in both50 urban and rural areas, where the
majority of poor, mainly black, people live.
It is against this background of a highly developed modem economy living
side by side with a very poor underdeveloped third world economy with
high levels of illiteracy, that we must consider the issue of what constitutes
meaningful consumer protection. It is all well and good if educated, relatively
affluent consumers residing in urban areas have knowledge of their rights.
But it cannot be said that there is any meaningful protection for consumers
in South Africa unless that message is able to reach and empower the most
vulnerable consumers including those residing in the most remote rural areas.
This is an enormous challenge for the authorities.

32 Access to redress
Even when consumers are aware of their rights, this will have very little
meaning if consumers cannot achieve quick and effective redress. 5 1 Different
dispute resolution forums have been established and/or recognised in terms of
the CPA and the NCA to ensure that consumers have access to redress when
they suffer prejudice in the marketplace. The legislature saw fit to introduce
new avenues for consumers to access justice because the more traditional route
through the normal civil courts is not a viable option for most consumers. 52
Litigation is expensive, complicated and very intimidating for most people
even in circumstances where consumers are not regarded as being vulnerable.
The new processes are set out in the CPA and NCA. Consumers may, for
instance, take a matter directly to the Tribunal, if such a direct referral is
permitted.53 Alternatively, they may refer the matter to various alternative
forums. 54 These include an ombud, a consumer court in the province with
jurisdiction over the matter or another alternative dispute resolution ("ADR")
agent, or they may file a complaint with the National Consumer Commission

edemp/documents/publication/wcms_545803.pdf> (accessed 25-10-2018).

49 T Mbeki "Two Worlds: two economies" South African Labour Bulletin 28-02-2004 10-11.
'o It must be noted that economists and social scientists have challenged the notion that there are two
separate economies in South Africa and argue instead that one is highly dependent on the other. See, eg,
B Cousin "Agrarian reform the two economies: transforming South Africa's countryside" in R Hall & L
Ntsebenza (eds) The Land Question in South Africa: the challengedof transformationand redistribution
(2005) and P Bond "Introduction: Two economies: or one system of super exploitation" (2007) Afrikanus:
Journalof Development Studies 1. Whilst it is not possible to engage further with this discussion in this
article, the notion of two distinct economies living side by side in South Africa serves to paint a useful
picture of what life is like.
5' Draft Green Paper 40.
52 See Woker (2016) SA Mere LJ 21 at 23-24 where this issue is discussed more fully. In some instances,
suppliers may even engage in criminal conduct but reporting such matters to the criminal authorities does
not assist consumers to obtain redress.
53 Section 69 of the CPA deals with the enforcement of consumer rights. The following sections of the NCA
are relevant to dispute resolution: s134 alternative dispute resolution; s 136 initiating a complaint to the
Regulator; Part C informal resolution or investigation of complaints and s141 referral to the Tribunal.
For a more detailed discussion of the role of each of these forums, see Woker (2016) SA Mere L/21-48.
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 105
56
55
("Commission") if the complaint falls 57under the CPA or with the Regulator
for complaints that fall under the NCA.
The CPA has proved to be problematic because section 69(d) provides that
once all other remedies available to consumers in terms of national legislation
have been exhausted, they may approach the ordinary civil courts. 58 This last
section suggests that consumers may only approach the civil courts once all
other remedies have been exhausted. 59 The only reported decision to deal with
section 69 is Joroy 4440 CC v Potgieter. The matter involved an application
for a refund of the full purchase price of a motor vehicle that the applicant
close corporation, Joroy, bought from the respondent trust. The court held
that the wording of section 69 is unambiguous and that the section 69(a) -
(c) remedies must first be exhausted before approaching a court for redress
under section 69(d). 61 The court did not make a finding on the merits of the
application and stated that the applicant was free to utilise any of the dispute
resolution mechanisms available to it in terms of the CPA. 62 In addition, it has
been held by the Constitutional Court that, where a specialised framework has
been created for the resolution of disputes,
63
parties must pursue their claims
primarily through such mechanisms.
It is not entirely clear how the legislature intended this process to operate. Is
this intended to be some kind of hierarchical scheme with consumers starting
with their supplier and then climbing some kind of ladder, or can they just
approach whichever forum is the easiest accessible?64 Some consumers seem
to adopt a shotgun approach sending their complaint to as many dispute
resolution forums as possible.65 This leads to a considerable delay in the

The Commission was established in terms of s 85 of the CPA. The Commission describes itself as the
"chief regulator of consumer business interaction in South Africa" and confirms that it was created by
government "to ensure economic welfare of consumers". See Commission "About the NCC" (undated)
The NCC <http://www.thencc.gov.za> (accessed on 17-08-2018).
56 Section 136 of the NCA.
17 Complaints regarding competition matters can be referred to the Competition Commission and complaints

about financial service providers to the FSCA.

58 Section 69(d) of the CPA.
See Naude "Enforcement procedures in respect ofthe consumer's right to fair, reasonable and just contract
terms under the Consumer Protection Act in comparative perspective" (2010) 127 SALJ 515; Van Heerden
& Barnard (2011) Journalof InternationalCommercial Law and Technology 130; Y Mupangavanhu "An
analysis of the Dispute Settlement Mechanism under the Consumer Protection Act 68 of 2008" (2012) 15
PELJ 319; E van Eerden Consumer ProtectionLaw in South Africa (2013) 452-454 and CH van Heerden
"Enforcement of Act" in T Naude & S Eiselen (eds) Commentary on the Consumer ProtectionAct (RSI
2016) 69-14 69-18.
6 2016 3 SA 465 (FB).
61 Para [8] at 467C-D.
62 Para [11] 467 H. See also T Naude & S Eiselen: Commentary on the Consumer ProtectionAct where the
learned authors discuss the interpretation of section 69(d) under the heading "Limitation upon access to
civil courts" 69-14 para [26].
63 See Chirwa v Transnet Ltd 2008 4 SA 367 (CC).

64 Van Heerden argues that the intention of the legislature is to introduce a hierarchy of dispute resolution
forums. See Van Heerden "Enforcement of Act" in Commentary on the Consumer ProtectionAct 69-2.
65 In the case of Bandera Trading CC v Kia the Glen; Wesbank; Short Term Insurance Ombud; Public

Protector the consumer complained to the Department of Trade and Industry, the Minister of Trade
and Industry, the Ombudsman for Short Term Insurance ("OSTI"), MIOSA, the Public Protector, the
Commission and the Tribunal.
 STELL LR 2019 1

resolution of disputes 66 as well as frustration on the part of suppliers that may

67
find that they have to defend themselves in a number of different forums.
In Imperial Group (Pty) Ltd t/a Auto Niche Bloemfontein v MEC. Economic
Development,EnvironmentalAffairs and Tourism FreeState Government the
court pointed out:
"[I]f anyone believed that the application of the CPA would ensure that an aggrieved consumer would
in future be in a position to have his/her dispute with a supplier resolved in a fair, inexpensive and
'
speedy manner, the facts emerging from this judgment will change that belief."

Four years after a dispute concerning a defective vehicle arose, there was
still "no light in the proverbial tunnel".69 The parties are still arguing about
jurisdiction; the merits of the matter had not even featured. 7
A critical issue that needs to be considered is the issue of prescription.
Consumers cannot bring complaints to the Tribunal more than three years
after the act or omission that is the cause of the complaint. 7 1 In the case of
Ngoza v Roque Quality Cars7 2 both the Commission and Roque Quality Cars,
("Roque") raised the issue that the matter had prescribed. Mr Ngoza purchased
a vehicle from Roque on 31 January 2012. In April 2012, he reported that he
was experiencing problems with the vehicle. On 25 April 2014, two years
later, Mr Ngoza approached MIOSA, which issued its findings on 2 September
2015. This was one year and seven days after receiving the complaint.
MIOSA recommended that Roque repay Mr Ngoza his purchase price within
25 days. Roque failed to adhere to this ruling and Mr Ngoza referred the
matter to the Commission on 23 July 2016. The Commission issued a notice
of non-referral 73 on the basis that the matter had prescribed and Mr Ngoza
then self-referred the matter to the Tribunal. 74 The Tribunal found that the
referral to MIOSA interrupted prescription because section 69 requires that

See eg, Clientele General Insurance Ltd v National Consumer Commission NCT 15-04-2013 case no
4671/2012/60(3) & 101(1) (P)); Simelane v PretoriaFranchiseSupport Services (Pty) Ltd T/A Fastway
Couriers (Pretoria) NCT 14-11-2013 case no 8742/2013/73(3) & 75(l)(b)&(2) CPA; Lekgetho v
Outsurance NCT 09-2-2015 case no 21125/2015/75(1) (b); Bandera Trading CC v Kia the Glen; Wesbank;
Short Term InsuranceOmbud; PublicProtector Case No NCT 24-02-2016 17829/2014/75 (I) (b) Rule 34;
Mmebe v Nashalele Specialist Imports (Pty) LtdNCT 10-03-2016 case no 34961/2015/75 (1) (b); Imperial
Group (Pty) Ltd t/aCargo Motors Klerksdorp v Dipico NCHC 01-04-2016 case no 1260/2015; Mbekeni
v Freeway Toyota NCT 01-04-2016 case no 36177/2015/75 (1) (b); Imperial Group (Pty) Ltd ta Auto
Niche Bloemfontein v MEC. Economic Development, Environmental Affairs and Tourism Free State
Government Grobler NO and others FHC 09-06-2016 case no A 169/2014; Lazarus and Sarkin v RDB
ProjectManagement tIa Solid and Vicostone NCT 09-06-2016 case no 36112/2016/75 (1) (b).
67 See CGSO "Annual Report 2016/17" (2017) CGSO 13 <http://www.cgso.org.za/wp-content/
uploads/2017/09/J7166-CGSO-Annual-Report l_.pdf> (accessed 02-08-2018).
68 Imperial Group (Pty) Ltd t/a Auto Niche Bloemfontein v MEC: Economic Development FHC 09-06-2016

case no A 169/2014 para 2.

69 Para 3.
70 See also Lazarus and Sarkin v RDB ProjectManagement t/a Solid and Vicostone NCT 09-06-2016 case
no 36112/2016/75 (1) (b), which took over four years for the very persistent consumer to be awarded
R 18424.00 by the Tribunal. In2017, the GCSO reported that it had approached the Commission in order to
find a resolution to this problem but that no progress had been made see CGSO "Annual Report 2016/17"
(2017) CGSO 13.
7i See s 116 of the CPA and s 166 of the NCA.
72 NCT 28-09-2017 case no 79905/2017/73(3) and s 75(l)(b) of the CPA.
This isa notice that is issued by the Commission in terms of s 73 of the CPA indicating that it does not
intend to refer the matter to the Tribunal.
74 Section 75(1)(b) of the CPA provides that a consumer may self-refer a matter to the Tribunal if the
Commission issues a notice of non-referral, with the leave of the Tribunal.
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 107

a consumer exhaust all his remedies before approaching the civil courts. One
of the dispute resolution mechanisms available to an aggrieved consumer is
to refer the matter to the applicable industry ombud. MIOSA is the accredited
industry ombud that is responsible for the resolution of consumer disputes
in the motor vehicle industry.75 Its code of conduct applies to all those in the
industry. Therefore, by lodging a complaint with MIOSA, the Tribunal found
that prescription had been interrupted during the time that the complaint was
being dealt with by MIOSA, because Ngoza could 76not have approached a civil
court before he had exhausted his other remedies.

33 Effective enforcement
For any law to achieve its objectives it needs to be effectively enforced.
Investigations need to be conducted and they must be conducted according to
the procedures set out in the legislation. Both the Regulator and the Commission
have been criticised for failing to carry out investigations'?7 The Commission has
indicated in the past that it does not investigate individual consumer complaints.
It only investigates endemic harmful business practices and harmful trends
and it focuses on issues of policy.7 8 The Commission uses the complaints that
it receives from consumers to determine trends in the marketplace and once
trends are established, it determines whether intervention is necessary.79 The
Commission reports that it has investigated the following: mislabelling of meat
products, 80 unfair contract terms in timeshare contracts;81 complaints relating

MIOSA became the accredited industry ombud for the motor industry on 15 January 2015 See GN 817 in
GG 38107 of 17 October 2014.
7 In other decisions, the Tribunal held that referring a matter to the Commission or to the consumer courts
also interrupted prescriptions. See Lazarus v RDB Project Management CC ta Solid NCT 09-06-2016
case no 36112/2016/75(1)(b) and Van Heerden v Bryanstan Executive Cars NCT 25-05-2017 case no
69249/2016/73(3) & 75(l)(b).
77 See eg, A Arde "Credit Regulator 'Stalls' Action against Lewis" (06-08-2017) Business Live <https://
www.businesslive.co.za/bt/business-and-economy/2017-08-05-credit-regulator-stalls-action--against-
lewis> (accessed 10-07-2017); Editor "Debt Counsellor Vindicated after 3 year Battle" (24-07-2017)
Debt Free DIGI Magazine <http://debtfreedigi.co.za/debt-counsellor-vindicated-after-3-year-battle/>
(accessed 10-07-2017); A Arde "Law failing consumers drowning in debt" (12-11-2016) 1OL Personal
Finance <https://www.iol.co.za/personal-finance/aw-failing-consumers-drowning-in-debt-2089323>
(accessed 10-07-2018). A Arde "NCR in hot water over enforcement" (2016) IOL Personal Finance
<http://www.iol.co.za/personal-finance/ncr-in-hot-water-over -enforcement-2004166> (accessed 10-07-
2018); L Ensor "Absolutely nothing happens at the NCR, says Wendy Appelbaum" (2016) BusinessDay
<https://www.businesslive.co.za/bd/business-and-economy/2016-11-25-absolutely-nothing-happens-at-
the-ncr-says-wendy-appelbaum/> (accessed 10-07-2018).
18 Commission Annual Report 201312014 12 and Annual Report
201512016 11.
" Commission Annual Report 2014/2015 18 and Annual Report 2015/2016 26.
'0 Annual Report 2013/2014 21 and Annual Report 2014/2015 29.
See IOL Personal Finance "Regulator goes after timeshare contracts" (20-09-2014) IOL PersonalFinance
<http://www.iol.co.za/business/personal-finance/regulator-goes-after-timeshare-contracts-]753838>
(accessed 03-10-2016); Annual Report 2013/2014 21 and Annual Report 201412015 31. In 2017/18, the
Commission carried out an extensive investigation into the timeshare industry and a report has been
concluded however, it has yet to be released. See Staff Writer "Report due on SA timeshare industry
as complaints soar" (18-03-2018) BusinessTech <https://businesstech.co.za/news/business/230761/
report-due-on-sa-timeshare-industry-as-complaints-soar/> (accessed 02-08-2018) and NCC News First
Issue (2018) 4 <http://www.thencc.gov.za/sites/default/files/news/Newsletterthlssue.pdf> (accessed
02-08-2018).
 STELL LR 2019 1
82 83 84
to gyms, paraffin stoves and heaters, second-hand car dealers in Pretoria
and Ford, (relating to its Ford Kuga motor vehicle). 85 However, to date none of
these investigations have been referred to the Tribunal for hearings into possible
86
on any suppliers.
prohibited conduct, so no penalties have been imposed
Individual complaints from consumers against their suppliers received by
the Commission are usually referred to other forums for resolution. 87 This
is problematic, however, because these other entities, such as ombuds, do
not have powers to enforce their findings and make recommendations of
remedial action. It is necessary, therefore, that the Commission takes the lead
concerning enforcement and to refer matters to the Tribunal if suppliers have
engaged in prohibited conduct and they are refusing to respect any consumer
rights under the CPA. 88 The Commission has recently referred two individual
matters to the Tribunal which is hopefully an indication that it is changing its
approach. 89
A failure to comply with either the CPA or the NCA constitutes prohibited
conduct and the primary task of the Tribunal is to adjudicate on matters of
prohibited conduct that either the Regulator or the Commission refers to it.
Many matters have been referred to the Tribunal where the Tribunal has been
unable to grant the applications because the authorities have not followed
proper procedures as set out in their respective legislation.90 The Tribunal

Annual Report 2013/2014 22. Between 2013 and 2014, the Commission conducted an investigation into
gym contracts at Body Lab, Planet Fitness, Maponya Mall Gym and Alberton Sports and Fitness. It
focused on high cancellation fees and allegations of misleading marketing information given by gym
staff. See W Knowler "Ombud backs gym members" (03-11-2015) TimesLive <http://www.timeslive.
co.za/thetimes/2015/I 1/03/Ombud-backs-gym-members> (accessed 03-10- 2016).
8' Commission Annual Report 2014/2015 29.
14 See Media Advisory "NCC, SAPS to conduct inspections at Pretoria North secondhand motor dealers to
turn the tide on after sale consumer challenges" (04-12-2017) The NCC <http://www.thencc.gov.za/sites/
default/files/news/mediaadvisorydec campaign041217.pdf'> (accessed 02-08-2018).
8 Media Alert "National Consumer Commission Institutes Investigation Into Ford Motor Company South
Africa" (01-03-2017) The NCC <http://www.thencc.gov.za/sites/default/files/news/media / 20release_
ncc%20investigation%20into%20fordO1032017.pdf> (accessed 02-08-2018).
16 The Commission reports that it often enters into consent agreements with non-complying suppliers in
terms of which they agree to abide by the legislation (see Annual Report 2014/2015 29).
17 The Commissioner has confirmed that this is the Commission's usual approach to individual complaints
on a number of occasions. See T Woker "Evaluating the role of the National Consumer Commission in
ensuring that consumers have access to redress" (2017) 29 SA Mere U 1-16.
8R For a full discussion of the role of the Consumer Commission, see Woker (2017) SA Merc LJ 1-16.
'9 See NCC v Western Car Sales CC t/a Western Car Sales NCT 14-09-2017 case no 81554/2017/73(2) (b)
and NCC v Highends TradingAnd Projects (Pty)Ltd t/a HighendsAuto Services NCT 22-070-2018 case
no 101932/2018/73(2)(b).
90 See, eg, NCR v Capitec Bank NCT 09-04-2014 case no 9152/2013/140(1) where the Tribunal found that
the Regulator initiated a complaint and investigation into Capitec Bank in the absence of any prior
reasonable suspicion which could be objectively assessed as required by the National Credit Act. The
Tribunal referred to Woodlands Dairy v Competition Commission 2010 6 SA 108 (SCA) and Competition
Commission v Yara (SA) (Pty) Ltd 2013 6 SA 404 (SCA) where the Supreme Court of Appeal had dealt
with similar issues relating to investigations by the Competition Commission. The Tribunal's decision was
subsequently confirmed on appeal to the High Court. See National Credit Regulator v Capitec Bank Ltd
GPPHC 23-03-2016 case no A440/2014. See also City of Johannesburgv NationalConsumerCommission
NCT 30-03-2012 case no 2667/201 1/(101(!) (P); Vodacom Service Provider(Ltd) v National Consumer
Commission; Cell C v NationalConsumer Commission NCT 08-06-2012 case no 2793/201 1/101(l)(P).
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 109
91
has at times been criticised for being too formalistic and anti-consumer.
However, South Africa is a constitutional democracy and the principle of
legality applies .92 The rule of law requires that all of those who exercise public
powers do so within the powers that have been conferred upon them and
that the law authorises all their decisions and acts. 93 The procedures, which
have been set out in the legislation, cannot simply be ignored. Consumer
protection authorities must exercise their authority according to the law and
cannot act arbitrarily. In other words, they cannot be, as Goldstone J stated in
DawnlaanBeleggings 95
(Edms) Bpk v JohannesburgStock Exchange,94 a law
unto themselves.

4 Suggestions to enhance consumer protection

In order to address some of the problems discussed above it is suggested
that the following is needed:

(1) consumer protection authorities must be effective in the provinces;

(2) the Commission must function effectively; and
(3) more specialised ombuds must be established.

4 1 Provincial consumer courts

When the Tribunal presented its 2016/17 Annual Report to the Portfolio
Committee meeting of the Department of Trade and Industry on 18 February
2018, the Tribunal was asked how it was bringing consumer protection to the
grandmothers in the rural areas. 96 These are precisely the kinds of people
for whom consumer protection legislation has been introduced, but it is quite
clear that very few of these consumers are being reached. The most effective
way of doing this is to ensure that there are effective consumer protection
entities in all the provinces. Consumer protection is an area of concurrent97
jurisdiction between national government and the provincial governments

9I See eg, A Arde "Credit Regulator to be probed for failing consumers" Business Report 26-11-2016
<https://www.iol.co.za/business-report/credit-regulator-to-be-probed-for-failing-consumers-2093581>
(accessed 06-07-2018) which reported that the Public Protector had launched an investigation into the
Regulator and the Tribunal. This followed a complaint to the Public Protector by Summit Financial
Partners, a financial education company, that the Regulator has "utterly failed" to fulfil its mandate and
that the Tribunal is "ineffective".
92 National Credit Regulator v Capitec Bank Ltd GPPHC 23-03-2016 case no A440/2014.
13 As stated by Ngcobo CJ in Albutt v Centrefor the Study of Violence and Reconciliation 2010 3 SA 293

(CC) "it is by now axiomatic that the exercise of all public power must comply with the Constitution,
which is the supreme law, and the doctrine of legality, which is part of the rule of law". In Fedsure Life
Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1999 1 SA 374 (CC) para
58, Chaskalson P stated, it is "a fundamental principle of the rule of law, recognized widely that the
exercise of public power is only legitimate where lawful" and that "it is central to the conception of our
constitutional order" that public bodies are "constrained by the principle that they may exercise no power
and perform no function beyond that conferred on them by law".
9 1983 3 SA 344 (W).
9' See also Clur v Keil 2012 3 SA 50 (ECG).
See National Consumer Tribunal 2016/17 Annual Report Meeting Summary <https://pmg.org.za/
committee-meeting/25794/> (accessed 03-10-2018).
97 Schedule 4 to the Constitution.
 STELL LR 2019 1

and therefore it is up to the provincial governments to ensure that consumer

protection authorities are operating effectively in their respective provinces.
At this point in time all the provinces have consumer protection offices
and most of the provinces are making progress, albeit very slow progress,
towards bringing their consumer protection legislation in line with the CPA
and the NCA. Before the introduction of the CPA, some of the provinces
adopted legislation which mirrored the now-repealed Consumer Affairs
(Unfair Business Practices Act) 71 of 1988. 98 The problem with the Consumer
Affairs legislation, both in the provinces and nationally, is that it did not give
the consumer protection authorities the power to 99enforce their findings and
therefore suppliers could simply ignore the orders.
It is not clear how effective the provincial offices are because very little
information is readily available about the work that they are doing. I°0 It appears
that provincial consumer affairs offices operate largely as advice offices,
and that very few suppliers are actually held accountable for their conduct.
The few reported cases suggest that when suppliers do not co-operate the
complaints are then referred to the Commission. This is problematic because
the Commission does not investigate individual cases and so, it seems,
consumers hit a roadblock.
The new proposed legislation for the various provinces makes provision
for the establishment of either a consumer court or a tribunal that will have
more extensive powers to enforce their orders. The Northern Cape adopted
new legislation in 2012, which repealed the Northern Cape Consumer Affairs
Unfair Business Practices Act 7 of 1996 and which aligned the Northern Cape
consumer protection legislation with the CPA and the NCA. The Northern
Cape legislation provides for the establishment of a consumer court 0 ' which
has the power to impose an administrative penalty of RI million or 10% of
annual turnover for prohibited conduct.0 2
Limpopo has adopted the Limpopo Consumer Protection Act 4 of 2015, but
does not appear to have a functioning consumer tribunal. Mpumalanga and the
Free State have draft legislation that aligns with the CPA but at present, both

See, eg, Gauteng Provincial Consumer Affairs (Unfair Business Practices) Act 7 of 1996; North West
Consumer Affairs Act 4 of 1996, Mpumalanga Consumer Affairs Act 6 of 1998; Western Cape Consumer
Affairs (Unfair Business Practices) Act 10 of 2002 and Free State Consumer Affairs (Unfair Business
Practices) Act 14 of 1998.
99 Itwas a criminal offence to ignore an order but it was very difficult, if not impossible, to persuade the
criminal authorities to act. There are no reported decisions of any criminal prosecutions in such cases.
See further T Woker "Business Practices and the Consumer Affairs (Unfair Business Practices) Act 71 of
1988" (2001) 13 SA Mere LJ315-323.
'ooEvidence of functioning consumer courts or tribunals could be found in the Northern Cape, North West
Province, Mpumalanga, Gauteng and the Free State.
'oiThe Northern Cape Consumer Court was one of the entities that dealt with the complaint inImperial
Group (Pty) Ltd t/a Cargo Motors Klerksdorp v Dipico (unreported case no 1260/2015 NCK (1 April
2016) discussed below.
102 Section 40 of the Northern Cape Consumer Protection Act.
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 111
10 3
legislation.
are still operating according to their 1998 Consumer Affairs
The Free State published the second draft of its Consumer Protection Bill in
August 2012 and has a functioning consumer court that is presently operating
in accordance with its 1998 Consumer Affairs legislation. The North West 14
Affairs Act.
Province is also still operating in terms of its 1996 Consumer
Public hearings into the Eastern Cape Consumer Protection Bill were held
during June 2018 and the closing date for submissions from the public was 285
2018.10
July 2018. It was hoped that the bill would be tabled during October
The intention is to align the Eastern Cape legislation with the CPA. In terms of
the proposed bill, its tribunal will have the power to impose an administrative
106
fine which may not exceed a fine which can be imposed by the Tribunal. The
bill also provides that any decision of the Eastern Cape Consumer Tribunal
will be deemed an order of a magistrates' court and can be enforced in terms
of the Magistrates' Court Act 32 of 1944. The Eastern Cape does not currently
have a functioning tribunal.
Gauteng has published a draft consumer protection bill. 10 7 The closing
date for public comments was 3 August 2018. The purpose of the proposed
legislation is to align consumer protection in Gauteng with the consumer
018
protection measures provided for in both the CPA and the NCA.' The bill
proposes that in the event of prohibited conduct on the part of a supplier, the
matter9 may be referred to the Tribunal for the imposition of an administrative
10
fine.
KwaZulu-Natal ("KZN") appears to be an exception as it has adopted its
10 rights.'
own consumer protection legislation with its own list of consumer
It does not have a functioning consumer tribunal although the Act provides
that a consumer tribunal or tribunals should have been established within 12
months of the Act coming into operation.1 2 The Act provides that the KZN
Tribunal must apply the existing law of South Africa in the assessment of
consumer complaints or disputes." 3 The KZN Tribunal does not have the
power to impose an administrative penalty and it is not clear how its orders
will be enforced.

103 See J Oosthuizen "Consumers have the right to legal assistance" (20-03-2017) The Bulletin <http://
thebulletin.co.za/2017/03/20/19106/> (accessed 14-08-2018). Mpumalanga has courts situated at Sekunda,
Evander and Bethal. The Member of Executive Council ("MEC") responsible for the Mpumalanga
Economic Development and Tourism recently called for nominations for consumer courts situated in
the Ethanzeni, Gert Sibande and Nkangala Regions. See Anonymous "Call for nominations: members
of the Mpumalanga Consumer Affairs Court" (03-05-2018) Lowvelder <https://Iowvelder.co.za/431103/
call-nominations-members-mpumalanga-consumer-affairs-court/> (accessed 14-08-2018).
104 Government and Municipal News "North West Consumer Court officially launched" (31-03-2017)

Platinum Weekly <https://www.platinumweekly.co.za/article.php?id 298&categoryID=6> (accessed

14-08-2018).
0 Information obtained from the Eastern Cape Public Protection.
106 Section 42 of the Eastern Cape Consumer Protection Bill.
107 ProvincialGazette 179 of 4 July 2018.
108 Section 2.
...Section 32 of the Gauteng Consumer Protection Bill.
"0 KwaZulu Natal Consumer Protection Act 4 of 2013. See Extraordinary Provincial Gazette KwaZulu-Natal
13 February 2014.
. See s 23 of the KwaZulu-Natal Consumer Protection Act.
112 Section 12(a).
"3 Section 10(l)(d).
 STELL LR 2019 1

As previously stated it is important for the provinces to align their legislation

with the CPA because having different legislation in different provinces will
cause confusion, especially in circumstances where suppliers operate in many
different provinces." 14 It is also necessary for all the provinces to establish
functioning consumer courts or tribunals. 115 This will make it much easier
for consumers
6
to access redress because the Tribunal sits for the most part in
Centurion."

4 2 Consumer Commission
The Commission is the primary entity established to champion consumer
protection and enforce consumer rights in South Africa. Notwithstanding this,
the Commission has adopted the approach that it does not pursue individual
consumer complaints. This approach is causing a roadblock for consumers
seeking to enforce their rights, and so it was suggested at a seminar in
February 2018, that the CPA should be amended to allow consumers to bring
their complaints directly to the Tribunal.' 17 This suggestion was received
favourably by many of the delegates, especially those from the ombuds' offices
who felt that if the ombud could not resolve a dispute, the consumer should be
allowed to approach the Tribunal directly for a hearing without having to refer
their complaint first to the Commission. As promising as this may sound, this
approach would, to a large extent, defeat the purposes of the legislation. Most
consumers have no idea about legal processes or what needs to be proved
in order for their claims to be successful. They do not know which section
of the applicable legislation will apply to their complaint and simply have a
story to tell. Even with a relatively simple complaint regarding a defective
motor vehicle, consumers are still required to prove that their vehicle was
defective. The reason why the Commission was established to drive consumer
complaints was so that consumers could receive the necessary assistance
to ensure the best possible outcome to their complaints. It is necessary for
the Commission to investigate and prosecute consumer complaints because
otherwise vulnerable consumers are back where they started before the
legislation was introduced. They have to deal with theI 18minefield of litigation
on their own, unless they engage legal representation. Most consumers do
not have the resources or the knowledge to do this.

4 3 Ombuds

Consumer protection legislation in South Africa places a strong emphasis

on ADR and recognises the important role that ombuds and other ADR agents

14 See Woker (2016) SA Mere LfJ44.

15 The use of the term consumer courts is misleading because these are administrative tribunals and not

courts in the true sense of the word. See further Woker (2016) SA Merc LJ21 43.
116 The Tribunal has jurisdiction throughout South Africa but most of the cases are dealt with in Centurion. It

has held hearings in other provinces but this is not done on a regular basis.
17 This suggestion was made at a seminar entitled "Common approach, understanding and interpretation of
the Consumer Protection Act" hosted by the Commission in Pretoria on 22 and 23 February 2018.
1i In most cases before the Tribunal suppliers are represented, sometimes even by senior counsel.
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 113

can play in the resolution of disputes. In the future, it is hoped that more
specialised ombuds will be established because ombuds have often proved
to be the most effective of the dispute resolution entities. The ombud is a
viable alternative to deal with complaints which involve, in the bigger scheme
of things, relatively minor issues or small amounts of money but which are
nonetheless very real for the individuals involved.1 9
In South Africa, ombuds are already well established in the financial
services sector and play a very effective role in resolving consumer disputes,
and their role has been given statutory recognition in both the NCA and CPA.
As stated above, two ombuds, MIOSA and the CGSO have been recognised
in terms of the CPA and there are more in the pipeline. Both the CGSO and
the Public Protector have highlighted the need for the establishment of more
specialised ombuds.' 20 The CGSO has a very broad mandate 2' because its
code applies to all participants in the marketplace unless they are regulated by
some other entity - everything from "tombstones to wedding photos". 122 The
CGSO has recommended that its jurisdiction be revisited and that it should be
restricted to retail industry-related complaints only.' 23 The Public Protector
has called for organs of state such as municipalities to establish effective
complaints resolution units, customer service units, or•••sector-specific
124 ombud
institutions to deal with individual consumer complaints.
National Treasury has recognised that the ombud system is a powerful
mechanism in the hands of consumers 125 and it is intended that the ombud
system in the financial services sector under the FSR Act will be strengthened.
The FSR Act establishes an Ombud Council as a full-time statutory body,
tasked with ensuring that consumers are able to access effective, independent,
fair and affordable dispute resolution processes.' 26 The Ombud Council will
set rules for financial sector ombud schemes to follow, to drive consistent
approaches amongst the various ombuds and ensure that they adhere to
minimum best standards.
The Act also requires that all financial institutions belong to an ombud
scheme. It was anticipated that the Ombud Council would be established
in 2018, and that new provisions relating to the ombud system will be

119 British Columbia Development Corporation, quoting from W Wade Administrative Law 5 ed (1982)
73 74. In 2017 the CGSO reported that of the 4650 complaints received that fell within its jurisdiction 60
per cent were resolved by the consumer receiving all or part of what was claimed or some other assistance.
See CGSO "Annual Report 2016/17" (2017) CGSO 4. 72% of the complaints are resolved within 90 days
(CGSO "Annual Report 2016/17" (2017) CGSO 9).
120 The Public Protector is an ombud in the public sector and deals with a host of issues affecting individual
consumers who encounter uncaring, disinterested or incompetent government officials on a day-to-day
basis.
12i CGSO "Annual Report 2016/17" (2017) CGSO 17.
'22 Clause 4.1 of the Consumer Goods and Services Industry Code.
121 CGSO "Annual Report 2016/17" (2017) CGSO 17.
124 E Mabuza "Mkhwevane wants provinces and municipalities to establish own ombuds" (13-08-2018)
Times Live <https://www.timeslive.co.za/news/south-africa/2018-08-13-mkhwebane-wants-provinces-
and-municipalities-to-establish-own-ombuds/> (accessed 14-08-2018).
125Media statement issued by the National Treasury quoted in Credit Ombud, Annual Report 2013 12.
126 This Ombuds Council replaces the Financial Services Ombud Schemes Council that was established under
the Financial Services Ombud Schemes Act 37 of 2004. The FSOS Council members were appointed on a
part-time basis. The Councils role was to register voluntary ombud schemes and to facilitate co-operation
between the various voluntary and statutory ombud schemes.
 STELL LR 2019 1

implemented thereafter. In 2017 National Treasury published a consultation

document entitled A known and trustedOmbud system for all. This document
proposes further reforms to the existing ombuds system that include:
" Enhancing the existing hybrid model that includes both statutory 127 and
28
industry ombuds;'
" Establishing a single statutory ombud scheme under a super ombud; and
" Moving toward exclusively industry-established ombuds with strong
oversight by the Ombud Council.
Each option has different advantages and disadvantages, which will need
to be considered carefully by the National Treasury and the Ombud Council,
once it is established.
The Public Protector's call for municipalities to establish effective
consumer complaints units suggests that there is a lack of communication
between the various bodies that have been established to assist consumers.
The provinces have consumer protection offices, they just need to be used
effectively, and the provinces need to bring their empowering legislation in
line with national legislation. This requires political will on the part of the
provincial governments.
There also needs to be effective communication between these various
consumer protection bodies so that consumers are not sent from pillar to post
or are able to engage in forum shopping. The case of Imperial Group (Pty)Ltd
t/a Cargo Motors Klerksdorp v Dipico highlights the kinds of problems that
consumers are experiencing. Mr Dipico referred his complaint to a number of
different forums, including the Office of the Consumer Protector in Kimberly,
the North West Consumer Affairs Office, the North West Consumer Court,
MIOSA, the Commission and the Tribunal. When an application to review a
decision of the Northern Cape Consumer Court was heard in the High Court
in 2016,' 2 9 Mr Dipico seemed no closer to resolving the dispute regarding his
vehicle that was purchased in 2012.130 This is also frustrating for suppliers
because it means that they continually have to defend themselves in a number
of different forums. Hence the argument that has been made previously:
the Commission, as the entity established by the legislature to champion
consumer rights, must take charge of the 3
process and ensure that there is a
speedy resolution to consumer disputes.' '

127 The FAIS ombud appointed under the Financial Advisory and Intermediary Services Act 37 of 2002
and the Pension Fund Adjudicator appointed in terms of the Pension Fund Act 24 of 1956 are statutory
ombuds.
128 Those industries in the financial sector that have voluntary ombuds which were recognition in terms of
the FSOS Act, include the long term and short term insurance industries, the banking sector, the credit
information industry and the Johannesburg Stock Exchange.
129 Northern Cape Division, Kimberley.
"o0 For other cases that highlight these issues, see the text to n 70 above.
"3' See Woker (2017) SA Merc LJ 16.
CONSUMER PROTECTION: AN OVERVIEW SINCE 1994 115

5 Concluding remarks
Consumer protection legislation has been introduced primarily to protect
the interests of the poor, the vulnerable and the less literate. But in truth
South Africa seems to have created a sophisticated system which is accessible
only to those who are found in its modern first world economy. We have to
find a means of ensuring that the poorest of the poor can also have access
to redress otherwise they will continue to be exploited by those who simply
ignore the legislation. It must be accepted that at present, claiming their
consumer rights remains a distant dream for the majority of South Africans.
It therefore continues to be a serious challenge in South Africa to ensure that
we establish a marketplace where there is fair competition with a high degree
of recognition and respect for consumer rights - not just for those who are in
a position to claim their rights.

SUMMARY
South Africa has a Constitution that is celebrated internationally because it recognises that
economic and social rights are just as important as civil and political rights. These rights are legally
enforceable rights and since the early days of the newly installed democratic government in 1994,
substantial measures have been introduced to promote and advance the social and economic welfare of
South Africans. In theory, South African consumers appear to be the best-protected consumers in the
world. Unfortunately, the reality is somewhat different. There is a high level of consumer frustration
in South Africa which sometimes even translates into violent protest. Despite the government's best
intentions, effective consumer protection remains a distant dream for the majority of consumers. The
article considers a three-pronged strategy that is necessary before there can be effective consumer
protection: consumers must have knowledge of their rights, consumers must have access to redress,
and the law must be enforced. Consumers who are unaware of their rights remain vulnerable and easy
prey for exploitation. This poses enormous challenges for the authorities because so many consumers
in South Africa reside in remote rural areas. Even if consumers are aware of their rights, it is still
extremely difficult for them to enforce their rights. This calls for effective consumer courts in the
provinces as well as a well-functioning and effective National Consumer Commission ("NCC"). The
NCC is the primary entity established to champion consumer protection and enforce consumer rights
in South Africa. The article also calls for the establishment of more specialised ombuds, as ombuds
have often proved to be the most effective means of resolving consumer disputes.