The Consumer Protection Act (CPA) imposes severe penalties to non-compliant businesses and massive opportunities to the IT industry.
This is according to Roger Knowles, a consultant and attorney, addressing delegates at the Dimension Data Accelerate executive forum last week.
The forum, hosted in partnership with ITWeb, aimed to improve Dimension Data's relationship with the local market and assist enterprises in accelerating their business into the future.
Xhaed = Consumer is king
The CPA came into effect on 1 April and brought expensive implications for all businesses that provide goods or services to consumers, according to Knowles.
He said the Act was initially put in place to empower the ordinary South African. “The Act creates a situation where David can take on Goliath,” he noted.
According to Knowles, the opportunities for IT means that IT companies will need to manage and store information in greater capacity and capability than ever before.
“The CPA states that records have to be findable and products need to be tracked right through its supply chain. This provides opportunities for IT, because IT will have to plan for massive capacity and design faster systems to provide customers with a quality service.”
Prepaid credit cards and electronic vouchers will also be affected, said Knowles. The CPA mandates that electronic vouchers remain valid until their full value has been redeemed, as the amount paid remains the property of the consumer.
Severe penalties
He explained that businesses need to clarify the services they provide and make sure the consumer understands what they can expect to get from a product and what it will mean for the consumer and their business.
Knowles said the CPA will enforce transparency in business. “The CPA is our first 'American style' legislation where the 'customer is always right'. A massive power has now been given to the consumer.”
According to Knowles, it's not just business that is responsible for a failed product, but the entire supply chain is now jointly liable.
He said if a product or service causes damage to the consumer, business can potentially face administrative fines of R1 million or 10% of company turnover; whichever figure is lower. In addition, courts can levy prison sentences.
However, if an employee is at fault, the employer and the employee become equally liable in terms of the Act.
Know your rights
Knowles said the Act protects several consumer rights: the right to equality, privacy, the right to choose, the right to disclosure of the nature of products and services.
The other rights include the right to fair and responsible marketing, honest dealing, fair and reasonable terms and conditions, and the right to fair value, good quality and safety.
The CPA mandates that for products requiring specialised means of disposal, the manufacturer will have to accept the return of those goods once they are at the end of their lifecycle.
“This includes old motor oil, fluorescent tubes and TV monitors,” added Knowles.
The Dimension Data Accelerate executive forum comes weeks after the integrator rolled out its brand refresh in order to strengthen its relationship with partners and customers.
Sean Joubert, MD of Dimension Data, Middle East and Africa, explained: “Accelerate conveys speed, a sense of urgency, pushing the boundaries and moving to the next level. The Dimension Data brand was created to resonate with the staff and clients alike.
“We want to ensure that we remain credible and relevant and to help clients meet their business objectives. Our value proposition has involved from a technology supplier to managed services, outsourced solutions and offerings.”
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