Non-compliance with Consumer Protection Act could cost companies dearly

The freight industry will have to go back to school if it wants to get its ducks in a row ahead of the new Consumer Protection Act which comes into force in October next year. This was the message from legal expert Advocate Louis Nel at the monthly Transport Forum where the contentious act came under the spotlight. “There is a major job ahead of you to really understand the Act and to interpret it correctly,” said Nel. “Also the Act in its bill and green paper form has been around for more than five years so all companies have had ample time to ensure they are compliant come October 2010.” Signed into law in April this year, the Act has been a long time coming, said Nel. “There is nothing new about it and it really follows overseas trends. The crucial element of this act will be training – and it will be important that companies go back to the basics and really understand the supply chain as there will be no more place for ambiguity.” With the new Act having already caused much uproar, many saying it will impact negatively on business in South Africa, Nel said at least 60% of the new Act was just the reinstatement of the common law. “There is nothing scary about this Act, but all industries, including the freight industry are really going to have to understand their rules and regulations if they want to be compliant. My advice to companies is to prepare themselves now.” With the second phase of the new Act – the implementation of regulations – expected to start soon, as well as the establishment of a Consumer Commission to enforce the law, noncompliance with the Act will cost business dearly. Breach of the act could see a company having to fork out 10% of its annual turnover or a fine of R1 million. “Companies must not think only in terms of next October. The next few months will see the implementation of the Privacy Act as well as the Companies Act – it is not business as usual. Those who are sitting around thinking they still have a lot of time, are going to find themselves digging into their pockets. Do your homework now.”