Programme Director,
Chairperson of the National Consumer Tribunal; Ms. Diane Terblanche,
President of the Law Society of the Northern Provinces Rre Busang Mabunda,
Head of FEDHASA Strategic Projects Rre Caleb Mabaso,
Head of the Department Rre Abram Tlaletsi,
All other Dignitaries invited,
Senior Managers of the department here present,
All officials present,
Ladies and gentlemen.
Programme Director, we are gathered here today to celebrate the 30th edition of the World Consumer Rights Day under the theme “Consumer Justice Now.”
Programme Director, allow me to quote one of the famous statement made by the former President of the United States of America, the late John F Kennedy “consumers are the largest economic group, affecting and affected by almost every public and private economic decision, yet they are the only important group, whose views are often not heard!”
It is our view that the dynamics of the South African consumer environment should be given a special consideration as it comprise mainly of the unsophisticated, and people with disadvantaged backgrounds due to the legacy of the apartheid regime. We have noted that the unbalanced terms of trade in transactions bring negative consequences for consumers and there has been a wide spread abuse of the doctrine of freedom in contracts.
The observed power imbalance manifests itself when contracts are concluded between those representing powerful monopolies and the uninformed and often unsophisticated consumers. Our observations are further that consumer injustice comes in various forms and relate to the unequal bargaining power, unbalanced terms of trade, unfair contractual terms, unnecessarily prolonged time frames to obtain redress as well as complexities of the legal processes.
It will however be noted that amongst the rights we have elevated, is the right to redress, which right forms the cornerstone of consumer protection. It embraces the right to receive fair settlement for just claims, including compensating for misrepresentation, shoddy or poor quality goods and unsatisfactory services. This right entails a right for consumers to get their money back, to have defective products replaced or the correct rendering of procured services.
The Consumer Protection structures have to ensure that the consumer voice is heard not at implementation stage but at a planning stage as most damages occur at the initiation stages. Consumer bodies have to be taken on board when consumer contracts are drafted so that consumer interests are safeguarded.
We all know that whilst contracts govern the relation between consumers and suppliers, such contracts are most of the time drafted by highly skilled and experienced legal practitioners who leave consumers with limited options to manoeuvre. They draft such contracts to safeguards the rights and interests of suppliers and once such a contract is signed, it becomes difficult to change the mind-set.
The unfortunate abnormality observed in such contracts is that they contain only the rights of suppliers and obligations on the part of consumers.
Programme Director, we also observe that the imbalance is more expressed in the usage of the so-called standard form contracts where even the educated and the rich are not protected. Service providers adopt a one size fit all approach which is often unfair and where it becomes a question of “take it or leave it!” and consumers can hardly bargain on terms of the contract.
This also restricts consumers from shopping around for better terms as competitors use similar contracts that carry same clauses. It is therefore, a coincidence to say that consumers have the right to choose if suppliers trade on similar terms. Contractual terms are essential especially in cases of disputes as they are the ones that govern relations between parties.
Consumers are further made to read voluminous documents written in small prints meant to discourage them from reading them. This invariably ends in consumers unconsciously signing their rights away and in cases of disputes their defences are compromised. It is normally observed that in cases of disputes, consumers will first have to deal with unfair contractual terms compounded by the fact that some of these clauses will be written in Latin maxims which is alien to an ordinary consumer.
Legal maxim such as exceptio errore calculi, meaning an error of calculation, is found in almost all credit agreements. The statement made by the late John F Kennedy is still valid and applicable today when he said “The poor man always looks upon the law as an enemy not as a friend.
For him the law is always taking something away.” Good consumer protection is not just about legislation, it can deliver justice, create fairer society and even save lives; but Programme Director, it is worthless as a piece of paper written on it if it is not accessible. Consumers will lose confidence in the legal system, if litigation processes remain complex, costly and sluggish.
Programme Director, in one of the cases lodged with the Consumer Affairs Office, it took three and half years to obtain relief for a complainant for unauthorized and unlawful deductions that were being effected on a salary for a period of nine (9) years. In this case, a furnisher store had obtained judgment against the complainant for an amount of R3 621, 54. A court had then granted a garnishee order for an amount of R200 on the salary of the complainant to settle the said debt.
During the period from June 2002 until February 2011 when the garnishee order was in effect, the complainant had ended up paying a whopping R21 000, 00 to settle a judgment debt of R3 620, 54. As if that was not enough, it further took the Consumer Affairs Office another three years to obtain refund for the complainant from a firm of attorneys and was ultimately refunded an amount of R12 310, 00 in October 2012 which means that an amount of R8 690 had to be paid for a debt worth R3 620, 54!
There are other cases Programme Director which can make you cry and where a consumer’s rights had unsuspectingly, completely been compromised in contracts signed. One of the things that the Minister of Finance, Mr Pravin Gordhan had emphasised during the presentation of his Budget Speech of the 27th February 2013 in Cape Town, was the need to contain the abuse or maladministration of the garnishee orders by creditors against members of the public, with a special reference to public servants as victims.
It should be known that this is also in the background that psychiatric wards are lately full with public servants (and other people of course) who are forever over-indebted and faced with the many garnishee orders that erode their salaries every month and therefore disabling them from making ends meet and ultimately affecting their performance at work.
We are aware that Section 80 of the National Credit Act 34 of 2005 clearly denotes the responsibilities of every credit provider when faced with a credit application. We nonetheless have on a daily basis, an intrusion of our privacy by some unscrupulous credit providers offering a loan or a credit facility. In many instances, this also happens when people are desperate, vulnerable and easily tempted.
We therefore agree and support the stance taken by the Minister on this matter and urge him to expedite remedial actions in this regard. We applaud and support therefore what has been said is the move to establish a Task Team that will investigate emolument attachment orders and the need to establish a code of conduct for the credit industry.
Another indication of the trivialisation or disregard for the rights of consumers is the recent findings by researchers that some meat suppliers have been feeding consumers products which are normally not edible or palatable to their tastes, e.g., horse meat, donkey meat and all those types of venison that are normally not liked.
You will agree with me that these are all callous acts which show a disregard for consumer rights and also demonstrate rather the absence of a moral conscience and the manifestation of extreme greed by those perpetrators involved.
You will also agree with me Programme Director that such actions do have the potential to impact negatively on the meat industry through possible consumer boycotts a matter that can induce devastating consequences on the economy and employment! The emergence and mass production of counterfeit and poor quality products destined for our shores have created major challenges as these products are not durable and are generally not fit for the intended purposes.
Delays in obtaining legal remedies for consumers result in the disappearance of the service providers. We should therefore, act swiftly on fly by night whose businesses are cropping up everywhere and disappearing overnight only to emerge in another province.
Businesses providing funeral services and those selling tombstones are becoming main culprits in this regard and our current biggest handicap is that they are not required to be licensed. Other practices that disadvantage our consumers relate to the selling of businesses as going concerns where businesses shift hands from one person to another using the same name and sometimes trading on the same premises, especially businesses that use lay-bye systems.
The advent of the sophisticated e-commerce where trading is conducted online has also left consumers finding themselves wanting. A lately globalised economy where procurements occur through the internet has created untold miseries to consumers and has exposed consumers to various schemes and scams in circulation around the world.
Consumers have lost their hard earned savings through fraudulent schemes which in certain instances originate in countries which make it extremely difficult to combat fraud. The more consumers participate in global markets, the greater the need for a vigorous awareness campaign due to the dangers associated with such trading.
Programme Director having said the above, we commit ourselves as a Government Associate Member of Consumer International (CI), to implement the United Nations Guidelines on consumer protection and in particular, the right to consumer education and the right to redress as enshrined in the guidelines and encapsulated in various legislation in particular the rights incorporated in the Consumer Protection Act and the National Credit Act.
We reaffirm our duty to implement the Nairobi Declaration which amongst others calls on us, as government to provide effective redress mechanisms for aggrieved consumers. We will do everything in our power to ensure that the Consumer Affairs Court is up and running by the end of this year to consolidate redress mechanism that are in place. We are pleading with all law enforcement agencies to ensure that consumer rights are given the necessary attention they deserve.
In closing, I would like to encourage all responsible citizens and all traders to recognise and observe consumer rights in all transactions carried out and in this regard I salute you all and say “Forward with the Consumer Justice Now, forward.”
Ke a leboga!
