The Consumer Protection Act is set to change the face of business in SA. Roxanne Rolando attended a one day seminar, hosted by FOCUS4 consulting and presented by food lawyer, Janusz Luterek, on the basics of this monster of an Act.
Consumers in SA have been waiting for more than four years for the Consumer Protection Act (CPA) to be promulgated and signed by the president of SA, and by the 1 April 2011, it was put into full affect.
‘We should first of all view the Consumer Protection Act (CPA) as something that is there to protect everyone and from which we will all benefit. It will, hopefully, eventually raise the general levels of ethics and service in the business environment. For those of you who are in business, or even operate non-profit organisations, the bar has certainly been raised,’ this is according to Neville Melville an advocate who specialises in consumer matters and the writer of The Consumer Protection Act made easy.
What’s the big deal?
The CPA is ‘far more altruistic’ and has the biggest fines and liability, compared to any other legislation affecting the food industry, says Janusz Luterek, a partner at Hahn and Hahn attorneys which specialises in food law. ‘The customer gets much more ‘revenge’ satisfaction going to the consumer commission,’ says Luterek. Law is getting personal!
Of late, the media has been obsessed with the new labelling law and Food Review is also guilty. ‘The CPA will trump all of this stuff,’ says Luterek. So isn’t it about time we take some notice of this monster Act or it’s sure to stab you in the back.
Who should be watching their backs?
‘This law applies to everyone,’ were some of the first words uttered by Luterek. ‘If a consumer suffers harm, someone will pay!’ he says.
Enforcement
First and foremost, this Act is very simple: ‘Negligence is no longer required to be proven! This thing caused that reaction. That’s it!’ is how Luterek describes it.
Also, ‘to prove that you know someone is going to be misled is difficult. But to prove that someone has been misled is not such a high hurdle to climb. The way to avoid liability is to stop deceiving. That’s what you’ve got to do. Stop fiddling with words!’ he went onto say!
As a product distributer or manufacturer one reads about new laws and acts affecting industry all the time, but how would a consumer know about the Act and how would they go about lodging a complaint with the commission?
For the last year or so pamphlets have been distributed in SA warning consumers of the imminent Act, but to be honest, not many are aware. Consumers, however, are not just the man in the street. Don’t forget that if you have purchased something, no matter what – a car, a house, a new piece of machinery for production, raw ingredients – you are the consumer.
But, Luterek drew our attention towards the facts in SA: ‘There is no centralised food agency! No mechanisms to resolve the conflicts between different departments and regulatory bodies. So they are going to use the one that suits them best!’ And that, at the moment, is the Department of Health. But, ‘the real problem is that no one at the Department of Health has a law background and now they’re interpreting law!’ advises Luterek.
CPA penalties
A supplier who is found by the Tribunal to have contravened the Act may face an administrative fine of up to 10% of the suppliers annual turnover or R1 million, whichever is the greater. ‘This means that if 10% of the suppliers annual turnover works out to less than R1million, the maximum fine is R1 million, but if the 10% comes to more than R1 million, the maximum amount of the administrative fine could be tens of millions,’ writes Melville.
The back end of the story
This pretty much reads as if anything can go wrong, and yes, ‘there are people out there that make a living out of these claims!’ warns Luterek. ‘But don’t be scared of the CPA – Some people think if they get sick, from say sandwich, they can retire. It’s not like winning the lotto. We’re not in America!’
And, concludes Luterek, ‘no one is entitled to expect perfection. Even NASA lost two space shuttles.’ This is not to say that the CPA must be put last on the list of priorities. ‘So you must cancel your golf day and sort out your compliance notice,’ concludes Luterek.
WARNINGS ala Luterek
· ‘The fact that you comply with the food labelling legislation doesn’t mean that you comply with the CPA,’ warns Luterek.
· ‘One must be careful of exaggeration and innuendo – puffing. If you overstate what your product is going to do you must be very careful.’
· ‘If you can’t sell your product without lying to the customer, you shouldn’t be selling it in the first place.’
· ‘When complaints come in they must be dealt with snappy, snappy like. A quick turnaround time can resolve many issues.’
· ‘One last warning – No one can certify that you comply with the CPA!’
