The Consumer Protection Act (CPA): how it protects you as a homebuyer

The Consumer Protection Act (number 68 of 2008) is a piece of legislation that was implemented by the Department of Trade, Industry and Competition in April 2011, with the purpose of encouraging fairness when dealing with consumers.

The Act regulates every transaction between a supplier and a consumer that involves the supply of goods or services in the ordinary course of business in South Africa. It includes the way in which those goods and services are marketed and promoted, and the actual goods and services received after the transaction has been completed.

The definitions of ‘consumer’ and ‘supplier’

In a nutshell, a consumer is defined in the CPA as “a person to whom goods or services are marketed in the ordinary course of the supplier’s businesses” and “a person who has entered into a transaction with a supplier in the ordinary course of the supplier’s business. A supplier is defined as “a person who markets any goods or services”.

The CPA protects your rights in eight ways

The rights granted to consumers, in this case homebuyers, when dealing with suppliers are explained in more detail in the following parts of the bill:

Part A: The right to equality in the consumer marketplace

A consumer may not be excluded from access to goods or services. No consumer may be discriminated against or charged different rates based on any discriminatory grounds.

Part B: The right to privacy

Marketers are not allowed to send adverts or other marketing material to a consumer if the consumer has informed the marketer that he or she doesn’t want to receive the marketing and promotional materials. A central registry must be established so that consumers can indicate their marketing preferences.

Part C: The right to choose

Consumers are allowed to choose their suppliers – bundling is not allowed. In other words, where Bank A provides finance for a home, it may not make it a requirement of the loan that the home must also be insured with Insurer B, unless specific criteria are met.

Part D: The right to the disclosure of information

All information must be provided in plain and understandable language. The homebuyer must be able to determine the price of the home. Furthermore, the supplier must advise whether the goods are new or reconditioned.

Part E: The right to fair and responsible marketing

All marketing must be fair and responsible. Rules and regulations govern promotional competitions. There are also separate regulations governing loyalty programmes.

Part F: The right to fair and honest dealings

No “unconscionable conduct” is allowed. In other words, no supplier may use any force, coercion or undue influence during the promotion, execution or enforcement of a contract.  

Part G: The right to fair, just and reasonable terms and conditions

The Act rejects agreements that are too one-sided, adversely impact on the consumer, involve unfair or unreasonable waiving of rights and agreements that contain unjust terms or charge unreasonable prices. A consumer may not waive any protection that is given to them and also can’t indemnify a supplier against gross negligence.

Part H: The right to fair value, good quality and safety

The goods and services that are provided must be safe and fit for the purpose for which they were intended.

Buying a home is probably one of the biggest financial decisions most people will make in their lifetimes. It can be a very daunting process, even for a knowledgeable and experienced buyer. Just remember that the CPA doesn’t give you leeway to let your guard down, it means that your rights are still protected in certain scenarios.