Consumers: The Consumer Protection Ombud’s Power to Help You

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In 2015 the Consumer Goods and Services (CGS) Code of Conduct took effect. It sets out minimum standards for the CGS industry to observe when dealing with consumers. Failure to comply with the Code contravenes the Consumer Protection Act.

Thus, CGS businesses that were not already subject to regulation (such as the motor industry and financial services) fall under the ambit of the Code.

In addition, the Code accredited the Consumer Goods and Services Ombud as the official Ombud to enforce the Code by dealing with consumer goods complaints by consumers, and to investigate alleged contraventions by CGS businesses. These affected organisations are also obliged to register with the Ombud and to pay participation fees depending on turnover (nil if your turnover is under R1 million but rising to R250,000 for businesses with turnover exceeding R3 billion).

What does the Ombud do?

The Ombud steps in when disputes between consumers and suppliers of consumer goods and services cannot be settled by the parties. The Ombud provides mediation services to help resolve disputes using alternative dispute resolution (ADR) techniques. The service is free for consumers.

In the 2015/2016 year the Ombud took on 3,495 cases of which 2,192 were resolved or closed out (i.e. outside of the Ombud’s jurisdiction or the case was withdrawn etc) and 1,303 were still ongoing. It takes an average of 57 days to resolve a dispute.

In addition the Ombud can refer matters for investigation to the National Consumer Council where it finds trends that appear to be at odds with the principles of the Consumer Protection Act. Some examples of referrals for further investigation are:

  • Speculative financial software. This covers suppliers who promise consumers high returns if they trade on the stock exchange using the software
  • Orthopaedic pillows and mattresses which supposedly do not deliver the claimed results
  • A loan tracking service which is supposed to help people find loans but instead apparently signs up consumers for other products and services and charges them a fee.

The Ombud is providing a valuable service to consumers and is becoming better funded. Tell your staff about this free service if they get “taken” by an unscrupulous business. Also check you are paying your subscription if you are a business that falls within the ambit of the Ombud.