Consumer rights Reforming statutory implied conditions and warranties

Fundamental consumer rights

The South African CPA provides for a range of consumer rights under Chapter 2 of that Act, falling into nine key categories:

• 
  right of equality in consumer market (Part A);
  
• 
  consumer’s right to privacy (Part B);
  
• 
  consumer’s right to choose (Part C);
  
• 
  right to disclosure and information (Part D);
  
• 
  right to fair and responsible marketing (Part E);
  
• 
  right to fair and honest dealing (Part F);
  
• 
  right to fair, just and reasonable terms and conditions (Part G);
  
• 
  right to fair value, good quality and safety (Part H); and
  
• 
  supplier’s accountability to consumers (Part I).
  

Within these Parts — and, in particular Part H — provision is made for implied conditions/warranties in relation to the supply of goods and services. These include:

• 
  an implied provision that the seller has the right to supply goods, the consumer is entitled to quiet possession of the goods and the supplier is liable for any encumbrances (section 44);
  
• 
  a right of consumers to timely performance and completion of services in a manner and quality that people are generally entitled to expect (section 54);
  
• 
  a right of consumers to receive goods which are reasonably suitable for the purposes for which they are generally intended, are of good quality, in good working order and free of any defects, and will be useable and durable for a reasonable period of time, having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply (section 55);
  
• 
  a right of consumers to expect that goods are reasonably suitable for the specific purpose that the consumer has indicated (section 55); and
  
• 
  a warranty on repaired goods, that every new or reconditioned part installed during any repair or maintenance work, and the labour required to install it, is under warranty for at least three months after the date of installation.
  

Remedies

If a supplier fails to perform a service to the standards contemplated in section 54, the consumer may require the supplier to either remedy any defect in the quality of the services performed or goods supplied; or refund to the consumer a reasonable portion of the price paid for the services performed and goods supplied, having regard to the extent of the failure.

Within six months after the delivery of any goods to a consumer, the consumer may return the goods to the supplier, without penalty and at the supplier’s risk and expense, if the goods fail to satisfy the requirements and standards of section 55, and the consumer can choose that the supplier either:

• 
  repair or replace the failed, unsafe or defective goods; or
  
• 
  refund to the consumer the price they paid for the goods.
  

If a supplier repairs any particular goods or any component of any such goods, and within three months after that repair, the failure, defect or unsafe feature has not been remedied, or a further failure, defect or unsafe feature is discovered, the supplier must:

• 
  replace the goods; or
  
• 
  refund to the consumer the price they paid for the goods.
  

I Methodology for the NEIAT baseline study of statutory warranties and refunds³²³

The National Education and Information Advisory Taskforce (NEIAT)

NEIAT was established in 2007, comprising senior education and information staff from all jurisdictions, including the Commonwealth, to provide expert advice to MCCA and SCOCA on consumer education issues that require a national and coordinated approach.

NEIAT Baseline Study for Statutory Warranties and Refunds August 2009

In August 2008, NEIAT conducted a broad public information campaign for consumers, traders and manufacturers to inform them about the TPA and state/territory fair trading legislation. To enable NEIAT to select the behaviour most appropriate for initial targeting, a baseline research study by Latitude Research and On Track Research was commissioned to generate robust data from consumers and traders in relation to statutory warranties and refunds. Problems with warranties and refunds were found to be relatively high in three markets — whitegoods, electronic goods and mobile phones, upon which the baseline research focused.

Research objectives

The principal aim was to collect primary data from consumers and suppliers in relation to statutory warranties and refunds. Specific objectives were to:

• 
  provide a national statistically representative assessment of consumer detriment across all warranties and refunds issues;
  
• 
  provide a national statistically representative assessment of the level of consumer, manufacturer, and retailer understanding of the rights and obligations created by existing statutory warranties;
  
• 
  identify differences in the incidence and level of detriment arising from warranty and refund issues experienced across consumer groups;
  
• 
  assess reputational and business costs to traders with protracted disputes about warranty claims; and
  
• 
  identify the barriers and triggers to changing marketplace behaviour for consumers, retailers, and manufacturers, including their responsiveness to messages.
  

Research method

The methodology was both qualitative and quantitative, and consequently conducted in two stages. An initial qualitative phase ensured coverage of target audiences. This made sure the quantitative phase was appropriately targeted and defined.

Qualitative phase

The qualitative research involved a series of group discussions, in depth interviews and an online bulletin board.

Quantitative phase

The quantitative research involved a series of telephone surveys. Telephone was preferred to alternatives such as a mail out survey (likely to achieve low response rates and result in high completion errors) or an online survey (for similar reasons, and also because of concerns about unrepresentative coverage of vulnerable and disadvantaged consumers with more limited Internet access).