Govt enacts Consumer Protection Act, as rent-seeking behaviour rises

By The NewsDay | Dec. 24, 2019 | 6 Min read

GOVERNMENT finally enacted the Consumer Protection Act (Chapter 14:14) which seeks to enforce and protect consumers in an environment in which “rent seeking” is on the rise. In Zimbabwe, rent-seeking behaviour has caused the monthly cost of living to exceed $4 000 for a family of six and continues to rise.

BY TATIRA ZWINOIRA

The Act, enacted on December 10, 2019, will curb some of the rent seeking behaviour through the Consumer Protection Commission (CPC), penalties, introducing guidelines for e-commerce, and enforcement of consumer rights.

CPC will essentially promote, enforce and protect consumer rights in the country.

“The Commission shall consist of the chief executive officer, who shall be an ex officio member and 12 other members appointed by the minister after consultation with the President,” part of the Act reads.

The minister referred to in the Act is the Industry and Commerce one, currently under Sekai Nzenza.

“The Act also makes provision for enforcement of consumer rights in addition to recourse to courts of law, both civil and criminal. These include a Consumer Protection Commission, Consumer Protection Advocacy Groups, provision for other consumer protection organisations and consumer protection officers,” local legal think-tank, Veritas, said in an analysis of the Act.

The powers of the CPC covers a variety of aspects regarding consumers.

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These include protecting consumers from unconscionable, unreasonable, unjust or otherwise improper trade practices; as well as deceptive, misleading, unfair or fraudulent conduct; promote fair business practices; co-ordinate and network consumer activities and liaise with consumer organisations and the competent authorities and agencies locally and outside Zimbabwe to protect consumer interests.

Other key functions include providing consistent, accessible and efficient system of consensual resolution of disputes and redress arising from consumer transactions; negotiate and conclude undertakings and consent orders; and issuing and enforcing compliance notices.

“The Commission may issue a compliance notice on any producer, distributor, supplier, wholesaler or retailer of goods or services concerning an actual or alleged prohibited conduct regarding any safety provisions or the safety and quality of goods or services,” reads part of the Act.

The CPC will also be able to “receive complaints concerning alleged prohibited conduct or offences, and deal with those complaints; investigate and evaluate alleged prohibited conduct and offences; maintain a record of and publish annual reports on consumer complaints and the outcomes of any hearings; encourage and assist governmental and official organisational support to further the interests of consumers and consumer organisations”.

“Refer to the Competition Commission or any other relevant authority any concerns regarding market share, anti-competitive behaviour or conduct that may be prohibited in terms of the Competition Act [Chapter 14:28] or other relevant Acts; co-operate with other consumer protection authorities to obtain redress across borders for consumers affected by fraudulent and deceptive commercial practices.

“Promote international co-operation in the comparative testing of consumer goods and services and facilitate exchange of test methods, plans and results; recommend the effective implementation of this Act and any other laws affecting consumers,” part of the Act reads further.

The idea behind these measures is to empower the commission to deal with errant businesses who engage in anti-consumer practices.

Penalties against anti-consumer practices For a long time, many consumers have complained to government or the CCZ of being unfairly treated by businesses.

Under sections 78 to 81 of the Act, penalties against anti-consumer practices have been introduced to target such businesses.

The Act makes it an offence for any business to disclose confidential information of a consumer. It also makes it an offence for any business or person not to comply with the CPC.

Further, the Act lists an administrative fine in respect of prohibited conduct of “two and a half per centum of the respondent’s annual net profit during the preceding financial year; or any amount the court may determine” following a dispute.

Employees and agents who work for suppliers of goods or services are also protected in the Act.

“If an employee or agent of a supplier of goods or services is liable in terms of this Act for anything done or omitted in the course of that person’s employment or activities on behalf of their principal, the employer or principal is jointly and severally liable with the employee or agent,” the Act further reads.

Establish guidelines for e-commerce Following the rise in the mobile penetration rate, currently at 88,2% as at the end of the third quarter of the year, retailers are increasingly seeking ways to more into e-commerce.

Over the past few years, some of the created big online shopping platforms include Ownai and Hammer and Tongues Online Shopping Mall.

“We benchmarked the Consumer Protection Act with international guidelines as well as best practice in other regional countries that have already moved forward and enacted the Consumer Protection Act like South Africa which had a more advanced Consumer Protection Act,” CCZ chairman Philip Bvumbe told NewsDay Business.

“We have taken into account the amendments that were made especially the area of sustainability and consumption and the area of e-commerce.”

Under section IV, it established consumer protection for online shopping that basically hold the website responsible and liable for consumers shopping on e-commerce websites.

Under this section, a consumer is advised to have full information on the products being sold or hired online.

This section also entitles a consumer to cancel without reason and without penalty “any electronic transaction and any related credit agreement for the supply of goods or services within seven days after the date of the receipt of the goods or the conclusion of the agreement; provided that the only charge that may be levied on the consumer is the direct cost of returning the goods”.

Often, online platforms put a fee if a consumer wants to cancel a purchase or transaction which is why the Act now limits this cost to the return of goods, only.

Enforcement of consumer rights “Any of the following persons may, in the manner provided for in this Act, approach the Commission, designated consumer protection organisation or court alleging that consumer’s rights in terms of this Act have been infringed, impaired or threatened, or that prohibited conduct has occurred or is occurring,” the Act further states.

Basically, consumers now have the power under this section to report any wrong behaviour they may have experienced which can lead to legal consequences.

The section essentially allows any person who has failed to have their dispute resolved through alternative dispute resolutions to approach the CPC.

Further, the Act gives the CPC the power to prohibit a respondent, who has been reported and is being investigated, from supplying, or from offering to supply goods or services for a specified period as punishment.

“Any person issued with a notice in terms of section 68 may apply to the court in the prescribed manner and form to review that notice within fourteen days after receiving the notice.

After considering any representations by the applicant and any other relevant information, the court may confirm, modify or cancel all or part of a compliance notice,” the Act reads.

Section 68 refers to compliance notices.

Lastly, the CPC is given the powers to appoint investigators to investigate any reports they may receive from the consumer regarding a trading business as well as to issue summons to the business.

Concerns of the Act While the Act has been praised by the CCZ, Veritas has raised a few concerns.

“Suppliers and consumers of goods and services should be aware that many provisions of the Act are already operational – such as the Part spelling out Fundamental Consumer Rights and the part applicable to electronic transactions. These provisions apply to most transactions for the supply of goods or services occurring on and after December 10 between suppliers and consumers,” Veritas said.

“Some transactions are exempted by section 3 — for instance, those in which goods or services are supplied to the State or to large companies and other juristic persons big enough [how big is still to be prescribed by the responsible Minister]; these consumers can be considered capable of protecting their own interests when entering into transactions.”

Despite this, Veritas concluded that the protection enjoyed by ordinary consumers, however, will be improved by the provisions found in the Act.