anufacturers will need to spend more on insurance premiums, while ensuring their goods contain warning labels, if a new bill to protect the rights of consumers is introduced in its present form.
These are just two of a raft of measures listed in the Consumer Protection Bill, which introduces substantial changes in the way businesses sell and market products.
The Consumer Protection Bill was recently passed by parliament and is now before the national council of provinces. The various conditions laid out by the bill will take effect 18 months after the legislation is enacted. It will not affect those enterprises that form part of a supply chain. Any person convicted of an offence in terms of the bill will be liable to a fine valued at 10 percent of their business's turnover or R1 million, or imprisonment for up to 10 years, or both.
Eric Levenstein, a director at Werksmans Attorneys, said he expected litigation regarding consumer issues to increase after the bill became law. The legislation would also increase the cost of insurance premiums for manufacturers. Manufacturers would have to ensure their products contained warning labels carrying a detailed breakdown of the nature and the risks of a product in respect to injury, death or physical damage to property.
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The legislation will also affect businesses such as plumbers or handymen, who repair, supply or replace parts in a property. It will be mandatory for them to present a customer with a quote in writing or in another recorded format before proceeding with any work. Franchisees will be granted a 10-day cooling off period upon signing a franchise agreement, in which time they will be able to rescind the agreement.
Levenstein said one of the main effects of the legislation was that it introduced strict liability, where the supplier of the goods or services - whether it is the manufacturer, retailer, distributor or importer - would be expected to prove that the goods or services supplied were in good order. Until now the onus has been on the consumer to prove any wrongdoing on behalf of the manufacturer or retailer. Damages can be claimed from a supplier up to three years after the death or injury of a person using the product.
Business owners have to grant refunds on goods that the customer found to be undesirable and returned to the seller within 10 business days after delivery.
The bill stipulates that a full refund must be granted, minus certain costs to cover wear and tear if the goods were used by the customer. The bill provides for setting up a national consumer commission that would be empowered to investigate complaints brought by consumers. The commission would be able to refer matters to the National Prosecuting Authority or a provincial consumer court.
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