(All opinions expressed in the Expert Opinion section are those of the writer and do not necessarily reflect the opinion of the Credit Ombud.)
The Consumer Goods & Services Ombud Office
The Consumer Goods & Services Ombud (CGSO) office officially came into being in March 2013. Previously operating under the ambit of the Consumer Goods Council of South Africa, the office was established to provide a system of standards, check and balances for the consumer goods and services industry, under the leadership of an independent ombudsman, Advocate Neville Melville.
The CGSO is a voluntary Ombud scheme set up in line with the Consumer Protection Act 68 of 2008.
The CGSO’s jurisdiction includes all registered industry players within the consumer goods and services industry, as defined in the Consumer Goods & Services Code, including retailers, suppliers, wholesalers, distributors, manufacturers, producers, importers, intermediaries, logistics and supply chain agents.
Consumer protection has come a long way in this country with the advent of the Consumer Protection Act (CPA) and the National Credit Act (NPA). The two acts more often than not overlap, with many transactions under the CPA accompanied by credit agreements which in turn are covered by the NCA. Both acts make provision for consumers to approach an Ombud as an alternative to going to the respective regulator with their complaints.
This occurrence is the main cause of confusion for consumers who are faced with the dilemma of which regulatory system their complaints fall under: the National Consumer Commission; the Consumer Goods & Services Ombud; the National Credit Regulator or the Credit Ombud.
Section 5(2)(d) of the Consumer Protection Act provides:
This Act does not apply to any transaction —
- (d) that constitutes a credit agreement under the National Credit Act, but the goods or services that are the subject of the credit agreement are not excluded from the ambit of this Act;
This ensures that goods sold through a transaction in terms of the NCA will be subject to the protections afforded by the CPA. These protections include the imposition of strict liability upon suppliers for damages suffered by consumers as a result of defects in products sold to them by the suppliers.
This approach seems at first glance to be the perfect solution, but there is a problem in that not all of the sections of the CPA relate to either goods, services or the agreement. In fact, many of the important safeguards created for consumers relate to the marketing, or promotion, of goods.1
Where there are two separate parts to the transaction, the CPA would apply in its entirety to the non-credit-related part of the transaction, for example, where someone purchases goods by using a credit card, the transaction with the supplier regarding the sale of the goods would be covered by the CPA, while the credit card transaction would not.
Where there is a single agreement that covers both the terms of the sale of the goods or services and the provision of credit to finance the transaction, both Acts apply, but to different aspects of the transaction. The CPA applies, for instance, to the delivery and quality of the goods and services while the NCA applies to the form and content of the agreement. It follows that the CPA then does not apply to aspects of the agreement covered by the NCA. The Table on the following page suggests a list of CPA provisions that would not apply to the agreement.
Table 1: Provisions of the CPA that do not apply to credit agreements
1Neville Melville & Robin Palmer ‘The applicability of the Consumer Protection Act 2008 to credit agreements’ SA Mercantile Law Journal Vol 22 No 2 2010, 272-278
1. General Process
The office of the CGSO is often faced with complaints that have more than one issue that needs to be resolved. A common example is that of a consumer stopping to pay their account because the goods were not delivered; were defective or not returned from repair.
Our advice to consumers is always to continue paying their debt while their matter is being attended to by our office. Where required, we may refer the credit part of their complaint to the Credit Ombud’s office if that part of the consumer’s complaint is not resolved by the supplier as well.
The following approach is used by the CGSO’s staff members:
- Find out if the consumer has unsuccessfully attempted to resolve the complaint with the supplier
- If this process was not followed they are referred to the supplier, who is given 20 business days to resolve the complaint, following which if the complaint is unresolved or the consumer is not happy with the outcome, they can forward the complaint to the CGSO
- If the consumer has already attempted to resolve the credit side of the complaint with the supplier, the complaint is referred to the Credit Ombud
The following guideline is used to provide practical assistance to members of staff of CGSO with regard to which Ombud office has jurisdiction in a particular case:
- No product delivered,
- Wrong product delivered,
- Product defective,
- Product taken for repairs,
- Product caused damage/ made sick
- Price not as advertised
- I cannot pay my account,
- They will not give me a copy of the contract,
- The amounts in the contract are wrong,
- They did not tell me that the total price would be –,
- I paid the amount outstanding but was handed over to debt collectors/ black listed,
- The account was opened in my name but not by me,
- The goods were repossessed
= FOR CREDIT OMBUD