On 29 May 2015 the Consumer Goods and Services Industry Code of Conduct (“the Code”), which obliges all parties in the supply chain to have proper consumer complaint handling procedures, came into operation.

The Code is for the Consumer Goods and Services Industry (“the Industry”), drafted in partnership between members of the Industry, government and the Consumer Goods and Services Industry Ombudsman (“CGSO”). Its purpose is to establish fair business practices within the Industry, to set minimum standards of conduct that may be expected from suppliers and to provide a scheme for alternative dispute resolution.

Application

Although not specifically stated, the Code applies to all suppliers involved who collectively contribute directly or indirectly to the ultimate supply of any particular goods or service. This includes producers, importers, distributors or retailers of goods and service suppliers. This means that, unless specifically excluded, it is mandatory for all parties in the retail industry to adhere to the Code, register with the CGSO and to pay the joinder and annual fees payable to the CGSO.

The Code does however not apply to:-

• transactions that are not covered by the Consumer Protection Act (“CPA”);
• transactions governed by other public regulations;
• the automotive industry, who has their own code with effect from 14 January 2015;
• electronic communication services as defined in section 1 of the Electronic Communications Act,2005; and
• transactions with organs of state or financial institutions.

Obligations Imposed

Regulated parties are required to ensure consumer and industry awareness of the Code. They are required to:-

• establish an effective, internal complaints handling process;
• prominently display the CGSO’s decal on all their trading premises, websites, etc;
• provide the public with a copy of their internal complaints handling procedure;
• ensure that their staff and agents are properly trained and have adequate knowledge of the CPA and its regulations; and
• compile and keep proper records of all complaints received for a period of at least 3 years.

Failure to Comply

A failure to comply with the provisions of the Code constitutes a contravention of section 82(2) of the CPA which may be met with the imposition of administrative fines. The amount of the fine can be as much as 10% of the non-complying party’s annual turnover or R 1million, whichever is the greater.

For more information, please contact Liesl Fourie on 041 396 9201

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