Press releases

Vodacom Group

The CPA gives power and choice to customers

Wednesday, 20 April 2011

When the new Consumer Protection Act (CPA) came into effect on 1 April 2011, it fundamentally changed the way business is done in South Africa. Consumers were given powers and protection virtually unrivalled anywhere in the world, and above all, freedom of choice. When properly implemented, the Act will transform the way in which businesses interact with their customers and ensure that all their dealings with consumers are fair, reasonable and honest. 

The Act places much emphasis on serving the customer better and we believe this will compel many companies to step up their level of customer service considerably. Improvements in service excellence may in certain cases imply a concomitant refocus on innovation, which ultimately has the benefit of better positioning the South African economy in the global arena as a whole.

South Africa's Consumer Protection Act is aligned with international best practice as is evidenced by the proliferation of consumer protection laws in a number of countries, including - amongst many others - Canada, India and Australia.

In Australia, federal and state laws protect business and customers from unfair trading practices while in the UK the Office of Fair Trading's mission is to make markets work for consumers by ensuring open, fair and vigorous competition between businesses.

In a bid to redress the imbalance in supplier-consumer relations, the new Consumer Protection Act in South Africa will promote and advance the social and economic welfare of consumers. Indeed, the CPA will radically overhaul the manner and form in which business is conducted in this country and we fully support its ideals.

The Consumer Protection Forum reports that nearly 2,500 complaints were finalised during the quarter ending December 2010, resulting in nearly R20 million being put back into consumers' pockets. Local statistics show consumer complaint trends can range from furniture, household and credit-related matters to cellphones and cellular service providers.

That every enterprise in South Africa will be impacted by the CPA is abundantly clear. Stringent new regulations will initially place new burdens on businesses and will forever change the way we conduct business in this country.

Given the extraordinary reach of cellphones in South Africa, it is clear that cellular networks cannot be complacent. Although for the most part Vodacom was already doing what is required, there are a number of aspects in our business that required changes to ensure complete compliance with the Act. For example, although we had previously written documents in ‘plain language', so that the content is understandable to people with average literacy skills and minimal experience as consumers of the relevant goods or services, following the promulgation of the CPA, we have had to simplify our contractual documents even further.

The new regulations will ensure fair and responsible marketing.  The prohibition on negative option marketing, which prevents suppliers from marketing goods and services on the basis that they will be supplied automatically unless the consumer declines the offer, is also welcomed.

The new Act also makes provision for contracts that exceed 24 months provided that there is consent from customers and that there is a demonstrable financial benefit for the customer. We welcome this rule, since the 24-month restriction originally in the draft regulation might have resulted in some unintended consequences; high end devices which are currently sold on a 36-month contract would have to be paid in 24 months, which would have resulted in higher monthly premiums for customers.

We welcome the rules regarding cancelation fees. The Act allows for early contract terminations and provides for businesses or suppliers to charge consumers a reasonable cancellation penalty; Vodacom is currently finalising systems development to implement a new cancellation fee. We also view the added requirement that suppliers inform customers of their contract expiry date between 40 and 80 business days prior to the expiry date, as well as the option of cancellation, renewal, or continuing on a month-to-month basis as fair since it will assist us in offering a better service to consumers.

We believe that the National Consumer Commission should encourage customers to lodge queries with suppliers first before requesting the Commission's involvement. This will help them to avoid bottlenecks and give them a better basis to operate efficiently. Vodacom has myriad platforms that customers can use to engage with us directly, which we encourage. Our aim is to make engagement as simple and easy as possible. Apart from contact opportunities via our call centre or via email, in keeping with the medium of choice of our consumers, they can also interact with us on Facebook or via Twitter - the latter both during the week and on weekends.

Overall, the new Consumer Protection Act will provide us with even more impetus to giving power and more choice to consumers. The CPA is ultimately all about customer-centricity, and we applaud it. Using it as a guide, we will make the communications experience an even simpler one for our customers.

OPINION PIECE [Portia Maurice, Chief Officer: Corporate Affairs]


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