Unscrupulous motor retailers will need to get their act together before the implementation of the Consumer Protection Act (CPA) which comes into force in April 2011. Decent and honest motor retailers will have very little to fear. It is those who have been giving the motor retail industry a bad name that will be weeded out by the CPA.
The CPA will drive more responsible motor retailing in South Africa. While I welcome the Act I believe it will take some time to implement properly and there will be some teething problems, however I am confident that it will be sorted out relatively quickly. Consumer Protection Acts in other countries has been mostly very effective. In Australia for example, retailers are very weary of the CPA and this has resulted in more responsible retailing.
Changes to contracts, point-of-sale, advertising content and sales processes will be required as well as education of staff from motor retailers but there shouldn’t be any excuses to comply.
A key component of the CPA for motor retailers is that the consumer has a right to return goods for a full refund. This is a general right and applies when the consumer receives the product and on examining it realises that the product is not that which was ordered or that which was, for example, advertised in a sales brochure.
The Act changes the way warranties and returns must be handled. If the goods are not suitable for the purpose for which they are intended, the consumer is entitled to return them at the suppliers risk and expense and without penalty and may obtain a full refund or have the item/s repaired. It provides for the right to return goods in certain circumstances. A consumer must be allowed a reasonable time to examine goods. This right means that goods can be returned to a supplier, for a full refund, in the following instances: – If the consumer could not examine the goods; – If the consumer is exercising the 5 day cooling off period provided to him for goods sold by way of direct marketing;
Deputy Manager of consumer affairs Desmond Pillay said when the Consumer Protection Act (CPA) comes into effect on 31 March 2011, “it is fair to say voetstoots would not apply in such a case”. This is thanks to the addition of an “implied warranty of quality” in the CPA, which means that any and all goods that fall within its scope must meet certain quality criteria.
In addition to common law warranties and contractual warranties, the CPA creates an implied warranty of quality for all goods.
• The producer, importer, distributor and retailer each warrant that the goods comply with the quality provisions and standards (“the requirements”) set out in the CPA.
• This is a minimum warranty for all new and used goods (excluding auctions).
• This means that within 6 months of delivery, the consumer can return goods which fail to comply with the requirements, without penalty and at the suppliers risk and expense.
• The supplier may repair or replace the goods or refund the purchase price (at the consumer’s choice).
• If the consumer opts for repair, and the defect occurs again within the next three months (or a new defect appears), then the supplier must replace the goods or refund the purchase price! This may have serious consequences for the motor industry.
And if there are any defects at all, these should be explicitly described to the buyer. If the customer in the example bought the car after the CPA came into effect, the car dealer would have to take the car back and repair any defects or give the customer his money back.
When purchasing a motor vehicle, here are some tips to watch out for:
• Make sure you understand what the total cost of the vehicle is to you. This way you will not be surprised when you have to pay.
• If it’s a used vehicle, make sure you buy it from a reputable dealer. If you are concerned about the history of the vehicle have it checked out by the AA or the like. Buy from a dealer registered at the RMI (Retail Motor Industry www.rmi.org.za).
• Make sure the vehicle has a full service history. Check the service book for all the stamps before taking delivery of the vehicle.
• If you are financing the purchase, make sure you read the contract and understand how the payments are going to work. Make sure you can afford the payments.
• Ask questions. Make sure you understand what you are getting. Don’t be afraid to ask questions.
In conclusion, the CPA is good news for consumers in that they have recourse should they not receive the goods originally agreed upon or advertised, as well as for the motor retailing industry as it will force unscrupulous dealers to clean up their act.