Friday, 1 April 2011

Consumer Protection an absolute Necessity in Namibia!

Mihe Gaomab II

Friday 1st April 2011 is the watershed event in the historical development for a broad based consumer movement in South Africa. South Africans have lived in something close to the consumer dark ages for many years that was plagued by historical legacy of disempowerment for consumers. The consumers in South Africa and Namibia alike are suffering enormous weight of “small print” and tedious “terms and conditions” when almost about buying anything under the sun. These were made further difficult by purposefully having unclear hire purchase contractual arrangements to paying the price for a service provider's inability to cancel a contract whether subscribing for a gym facility or paying for a unwanted service on a periodic basis, which is normally a year.
Ever since political liberation and independence for South Africa and Namibia, concentrated economic sectors and lack of strong consumer and political will against the need for effective consumer protection have greatly disenfranchised and disempowered consumers.

This is greatly to change on 1st April 2011, when the new Consumer Protection Act (CPA) comes into effect with strong support from the consumers and politicians alike. Namibian support for the need for consumer protection has also culminated with a strong and effective consumer division at the Ministry of Trade and Industry.

There has also been increased awareness created led by the vibrant grassroots consumer organisations such as the Namibia Consumer Trust, Namibia Consumer Protection Group, and the Namibia Consumer Lobby.

All these bodies are increasingly using social media such as “Facebook” to increase awareness on consumer issues and the need to ensure legislation for the consumer. The Law Reform and Development Commission have also been aggressive lately to ensure that Namibia follows suit on the heels of South Africa to develop Consumer Protection Policy and Law in Namibia. Further, Ministry of Justice held in 2009 a ground breaking workshop to sensitise on consumer protection from a legal perspective.

There is also considerable effort in terms of financial literacy to bring consumer rights to the public domain in the country. Ministry of Finance, Bank of Namibia and NAMFISA as well as other cooperating partners such as SME Compete, NCCI and GIZ can indeed be complemented with embarking on a nationwide financial literacy programme to educate the public on consumer financial education.

The Namibian Competition Commission has started to interrogate the link between consumer protection and competition policy and law. In fact, the Commission is busy drafting a historical research study that will as an outcome propose concrete recommendations with regard to the strong relevance between Consumer and Competition Protection in Namibia. As evidence shows, having only one without the other compromises the attainment of the purpose for which the Competition Commission has been established for.

But then, what really does the Consumer Protection do and how is it link to the Competition Policy and Law. In short, what will the Act do the South African consumers now that they have reached his historical milestone.

Undoubtly, the Act will have many implications for businesses, who will be called to account, legally speaking, in instances that traditionally generated only a knee jerk reaction of consumers that they can’t do anything. Businesses have also been apologetic to any credit agreement dispute with consumers and in fact power relations remain highly skewed in favour of businesses when consumers wanted to follow up on contract terms, product safety, fair pricing, or even product defects to mention but a few.

One thing is clear, consumers will be significantly more empowered. In fact, South African consumers can now stand up for ourselves and be counted. The Consumer Movement will be revolutionised and enforcement can assist them to score on big points with businesses.
All does however not look rosy. Consumers need to become educated to know more about the provisions of the Act, and how to approach the consumer in a confident, purposive and responsive manner knowing that the law is on our side. The success of the Act depends on how Consumer Bodies in South Africa get their act together and all effort depends however on their willingness and effort to expose any infringement on consumer rights. Lawyers are told to take a back seat but they are also crucial to bring the consumer complaints to book and to make sure that businesses pay for their alleged malpractices.

The yeast of the truth is that the Consumer Protection Act has real teeth and its National Consumer Commission is given the bark it needs to bring businesses in line. Companies and Businesses that fail to comply with its terms can face penalties as severe as an administrative fine of up to 10% of annual turnover - or a fine of R1 million. Businesses in South Africa has realised this and are proactively changing their operations to conform to the provisions of the Act.

Of course, to be an active consumer, there is need that South Africans need to understand their rights, and the responsibilities of service providers, industry players and government are clearly defined in the Act. Namibians ought to take heed and here are some of the highlights of the Act:

“Oshoto” or Lounge Privacy finally – Most South Africans and Namibians have been bombarded and harassed by businesses of taking unsolicited sales calls, junk emails and SMS’s. The Act takes very necessary privacy action, allowing you to demand that any company that contacts you without you asking them to do so removes you from its database. Even better, when you're filling out a contract or membership form, online of offline, you must be given the choice to specify that you do not want to be bothered by advertising.

At last Swakopmund Coastal Cooling off – Ever regret that buying a Vacuum Cleaner from a Sales guy visiting you at home just to get rid of him or her. Alas, no need to despair. The Act says companies must now offer you a cooling off period to cancel an advance reservation, booking or order. This measure gives consumers the ability to recover from the heat of sales moment and confirm their decision after consideration. The act also makes it illegal for companies to automatically renew contracts as they expire. From now on, they'll need permission in writing from you before they can renew. And, even better, suppliers and service providers you hold contracts with are now obliged to communicate with you when they increase prices.

No more gobbledekook or English jargon- One of the most important changes the Act brings is a legal obligation on companies communicating with consumers to do so in plain, simple language. Companies now have to communicate with consumers in plain language that any reasonable person can understand in their adverts, media statements and terms and conditions. This isn't only a measure to reduce overwhelming consumer annoyance – it also seriously empowers consumers and means companies can no longer dupe you with fine print you haven't read.

Your right to say no to misleading or false marketing and advertising. The Act will make it far easier for consumers to take action when a company provides bad or defective goods or services. According to the Act consumers can stop legally misleading and false and deceptive advertising, marketing, and service. Consumers have also a legal right to cancel any promotional scheme they signed up for within 20 working days' notice. Sounds fair, isn’t it!

Do unto those as they would like to be done unto you; Remember that time you got thrown literally to a different flight because the airline had 'overbooked' or remember when businesses require you to choose their service no matter what by constrained choice? Remember how frustrated you are when deals are offered by discounts and promotions and yet it is so ridiculous? Well, Namibians, times have changed in South Africa. Now, if you miss a flight because the airline sold more tickets than it had seats, the airline must refund your ticket, with interest, and not just hand out vouchers for the missed booking.

This Act also looks to protect consumers against generally fraudulent schemes and offers (remember pyramid related schemes or Ponzi schemes in Namibia, BON take note). To put it simply, companies indulging in overselling (a polite term for commercial lying) and under delivering will be punished.

Once locked in Contract, you are forever doomed is over - Signing your life away by mistake is no longer going to be so easy, thanks to the Act. Even if you have agreed to a contract with your signature, companies creating one-sided contracts that clearly favour themselves will be taking a real chance. The court now has the power to redraft clauses or to order the company to change unfair terms and conditions.

Good Deal, Good Product, Good Life - The Act also includes clauses designed to ensure that consumers receive goods that are of "good quality, free of defects and reasonably suitable for the purpose for which [they were] required". In a nutshell that means when the product is delivered, it must do what they say it will in the advert. If it clearly doesn't, or if it arrives in a terrible condition, you, the consumer, are totally within your rights to take action.

Voetstoots and SMS Competitions - Suppliers, particularly in the car industry, will have to let consumer know of all defects of your purchase and consumer have to agree to buying the product in that condition. When entering competition, consumer will not be allowed to charge an exorbitant R5 or R10 to enter an SMS or MMS competition, but will have to stick to the preapproved rates by regulation.

All this things above seem to be too good to be true. In fact, knowing consumer rights before and treatment mooted to them by businesses in the past, the Act in fact will make it far easier for South Africans to enforce their rights as consumers, and, importantly, to go through the process of claiming damages or compensation when consumers have ended up on the wrong end of a commercial transaction. The Act is also small business friendly in the sense that companies who earn less than N$3 Million are not subjected to the conformity of the Act and Hawkers from the informal sector do not have to comply thus avoiding any cost of regulation associating to full compliance. But they are all protected as a consumer.

This development in South Africa can’t be divorced from Namibia given the closeness and semblance of the two economies. One thing is clear. All involved in consumer issues in Namibia are going to watch developments with keen interest in South Africa and remind themselves continually that they wish they can be there as well on the 1st April 2011.

Hell. No need to despair. It can happen in Namibia as well. Namibia can also develop its Consumer Protection and ensure some level of responsibilities to institutions concerned on consumer matters. In fact, it is encouraging that the Law Reform and Development Committee is taking the judicial lead to develop the Act. With an energetic Chairman and eager Secretary, the Act will find its home in Namibia, I am sure.

The Minister of Trade and Industry, Dr Hage Geingob should be commended for its visionary direction of centralising consumer protection on the developmental agenda through creating a necessary institutional capacity at the Ministry as well as pushing the Namibian Competition Commission in defining its competition space from a consumer point of view. One thing is clear increasingly from the Commission’s point of view. Consumer rights are here to stay in Namibia in the near future. The Commission knows that its success lies in the purpose of the Competition Act, 2003 around economic and consumer welfare in terms of the three P’s, (competitive) Pricing, Product (choice) and Promotions (honest ethical advertising)

In conclusion then, going forward there cant be effective competition policy and law in Namibia unless there is response to give greater weight to consumers that should not only benefit from lower prices, better quality and a greater variety of goods and services but such situation can lead to an efficient business transactions, that provides transparent information availability to the consumers.

Mihe Gaomab II is the Secretary and Chief Executive of the Namibian Competition Commission.