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1time faces CPA probe

Nov 09 2012 10:58 Ina Opperman

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EMBATTLED airline 1time does not only have a few thousand angry consumers, who bought air tickets that will take them nowhere, to contend with.

The Consumer Commission and the Consumer Tribunal can soon also be keeping the people awake who gave permission for tickets to be sold up to the time flights were stopped last Friday afternoon.

Section 47 of the Consumer Protection Act (CPA) prohibits overselling and overbooking. While the tickets were not oversold or overbooked, this section clearly states that a supplier must not accept payment for any goods or services if the supplier has no intention of supplying the service.

Should the supplier be unable to supply the service on the specified date and time and not be able to get another company to help out, the supplier must refund the consumer with interest calculated from the date of payment to the date on which the money is paid back.

This means that the people at the helm of the 1time business rescue should have stopped selling tickets as soon as they knew that liquidation was imminent. They accepted payment for a service they knew the airline would not be able to deliver.

Apart from the fact that consumers who bought tickets should get their money back because no service was delivered, the business rescuers of 1time contravened the CPA and this in itself should be investigated by the Consumer Commission and referred to the Consumer Tribunal, which could find 1time and its business rescuers guilty and impose an administrative fine calculated on its turnover.

Section 54 of the CPA also gives the consumer the right to expect from suppliers that services be performed and completed in time and that they will be notified in good time of any delays. If the supplier fails to do that, he must refund the consumer a reasonable portion of the price paid, keeping the extent of the failure in mind.

Clearly consumers can use this section of the CPA to help them in their fight to get their money back. Some banks have already organised refunds for those clients who paid with credit cards while others are still waiting for their banks to see if they can be refunded.

Consumers who paid cash for tickets are the ones who wonder if they’ll get their money back.

Ebrahim Mohamed, acting consumer commissioner, says now that the commission has been informed that 1time is not in liquidation as has been reported; the company still exists as an entity, so it can be investigated.

Mohamed was scheduled to meet with 1time CEO Blacky Komani to get answers to the commission’s questions before further steps are considered.

While most consumer law experts have been looking at section 54 of the CPA to obtain redress for consumers who have bought tickets, one expert in consumer law, who declined to be named, agrees that 1time could also end up facing a contravention of section 47 and a hefty fine.

The CPA was promulgated to level the playing field between business and consumers. The 1time issue will give the Consumer Commission, with a new, albeit acting commissioner at the helm, the opportunity to show that it can investigate a contravention properly and present it to the Consumer Tribunal in a way that will ensure justice to consumers and act as a deterrent to other companies that plan to treat consumers unfairly.

*Ina Opperman is the co-author of Understanding the Consumer Protection Act published by Juta.

For more go to finweek.com or follow Finweek on Twitter.

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