Johannesburg = Big businesses that have long been fleecing South African consumers will have their wings clipped after the establishment of the National Consumer Commission (NCC).
The new regulator will give local consumers the clout to fight greedy and exploitative companies.
It will join other regulators, such as the Competition Commission and the National Credit Regulator, which have been battling unfair business practices.
The biggest blows against unscrupulous businesses have so far come from the competition authorities, which this week imposed on Sasol the single largest anti-trust fine in South African history. The petrochemicals giant was fined more than R250m.
Sasol was convicted of price collusion in the fertiliser industry. Farmers say the company's actions contributed to pushing food prices higher.
The Competition Commission has also exposed nefarious schemes hatched to milk the poor in the bread and dairy sectors.
Drugmakers, automakers and loss-making national airliner SA Airways have also been stung.
The inquiry into bank charges and access to the national payment system has, as competition commissioner Shan Ramburuth puts it, created an awareness and understanding of the workings of the payment system and empowered consumers to make informed choices and assert their rights.
Tami Bolani, the chairperson of the independent consumer watchdog the National Consumer Forum, applauds the work done so far.
"However, a whole lot more needs to be done in terms of creating awareness. You can have the best consumer protection legislation in the world, but unless you arm consumers with information it won't be of much benefit," he says.
Educating consumers about their rights is the best weapon against unscrupulous business practices, Bolani says.
More bite
He cites an example where there was market abuse even when legislation prohibiting such practices existed. "Until recently Standard Bank has automatically increased the credit card limits of its clients, even though the National Credit Act expressly prohibits the practice."
Like Bolani, Ina Wilken of the SA National Consumer Union endorses every "clause" in the Consumer Protection Act.
The act was signed into law by former President Kgalema Motlanthe a few weeks ago.
"This new legislation takes consumer protection to levels not seen before," she says.
The act has provided for the creation of the NCC. The NCC will be an enforcement and investigative body that protects consumers and will be responsible for implementing the act.
The act will be enforced in October next year due to an 18-month grace period that will allow businesses to familiarise themselves with it and to put the right systems in place.
Wilken says the consumer rights lobby groups should also be using this period to form a single unified national consumer watchdog.
"The pooling of resources should give us more bite," she says.
The new act makes provision for autonomous consumer watchdogs to apply for accreditation from the NCC. Accredited watchdogs will get funding for consumer education and for costs incurred in resolving complaints from the NCC.
Bolani feels funding should be extended to cover research, product testing and comparability studies.
Wilken has suggested that the Competition Commission pay for this from the penalty levies imposed for anti-competitive behaviour.
Among other things the new consumer protection legislation will prohibit is cellphone providers unilaterally renewing contracts when they lapse at the end of the initial 24-month contract, as is currently the practice.
Another recent significant development is the promulgation of a regulation which, if approved, will see motorists paying for fuel with a credit, debit or hybrid card. This will render garage and petrol cards unnecessary and save consumers bank charges.
Petrol stations will become safer environments as less cash will be handled, reducing the risk of robberies as consumers will not have to carry large amounts or draw cash each time they want to refuel.
- City Press