new bill promotes rights of consumers 
07 May 2008

The draft Consumer Protection Bill  tabled in the national assembly aims to promote and advance consumers' "social and economic welfare".

A memorandum to the bill says current consumer protection provisions are fragmented, outdated and mostly incorporated in legislation that is merely incidental to consumer protection. There are so far no general rules of law relating to the consumer's most basic rights to information, disclosure, fairness and transparency.  Current laws do not address discriminatory and unfair market practices, the proliferation of low-quality and unsafe products, lack of awareness of rights, inadequate protection and limited redress, as well as weak enforcement systems.

Among other things, the bill codifies: 

• fundamental consumer rights, including that of equal access to consumer markets.
• It protects communities, districts, market segments and populations against unfair discrimination regarding access to goods or services of different quality or pricing.

The consumer's right to privacy includes he right to accept, refuse or block any direct marketing approach. The responsible minister may also prescribe certain days, dates and times when consumers may not be contacted for promotional purposes.

To enhance consumer choice, suppliers are prohibited from requiring consumers to buy bundled goods or services, unless it can be proven that such bundling results in their economic benefit.

The right to choose includes the right to decide whether to continue a commercial arrangement, either during the course of an agreement or once it has expired.  And the right to cancel advance reservations or bookings, but suppliers may charge advance deposits and impose reasonable cancellation penalties.

The bill establishes the consumer's right to cancel a fixed-term agreement, limits the rights of suppliers to impose cancellation charges and sets out rules governing the expiry of such agreements.  Because consumers approached by direct marketers often feel pressured to agree to a transaction, the bill establishes their right to cancel such an agreement without penalty during a brief "cooling-off" period of five business days.

The right to disclosure aims to ensure that consumers understand the terms of transactions or agreements they enter into and can make informed choices about the products and services they consume.

The bill sets out standards for fair and responsible marketing and provides a general prohibition against misleading, fraudulent or deceptive marketing.  It prohibits certain specific marketing and selling practices, including bait marketing, negative options and referral selling.  It regulates loyalty programmes and prohibits the offer of prizes with the intention of not providing them.

It bans companies from informing consumers that they have won a prize when no competition has been conducted or they have never entered a competition, or making the prize subject to a previously undisclosed condition payment of any consideration, whether for participating in the competition or for the prize itself. There is a ban on overselling and overbooking, which requires a supplier not to accept consideration for any goods or services unless it reasonably expects to have capacity to supply them.

Otherwise, consumers must be refunded in full with interest. Consumers can also claim contractual and consequential damages, including economic losses.  The bill aims to codify and improve on common law by addressing unfair contract terms and providing consumers with remedies when there have been breaches of contract.  Provisions seeking to limit the supplier's liability must be specifically and conspicuously brought to the attention of the consumer. The bill provides for consumers to receive goods that are of good quality, reasonably suitable for the purpose for which they are intended, in good working order, free of defects, and usable and durable for a reasonable period of time.

Suppliers are obligated to accept the return of waste goods that may not be accepted in the common waste collection system.  Prepaid certificates, credits and vouchers will remain negotiable for up to five years. The supplier is obligated to honour them when presented.

The bill seeks to make redress accessible and to protect consumers from being victimised if they act to enforce their rights. It establishes a national consumer commission as the primary administrative regulator responsible for carrying out education, research, investigation of complaints and enforcement of the act.

A tribunal will conduct hearings on complaints and adjudicate certain disputes and alleged prohibited conduct.

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