Consumer Protection in electronic transactions: ECT v CPA

We told you previously that the Consumer Protection Act 68 of 2008 (CPA) has been signed into law and will become operative on 24 October 2010. The CPA will give consumers lots of rights and protection where in the past vendors could to a large extent decide how they wanted to conduct business. We find that in the ICT environment, people seem confused now about which consumer protection principles should apply to electronic transactions – the provisions of the Electronic Communications and Transactions Act (ECT Act) or the provisions of the CPA? Or both?

Does the ECT Act or the CPA apply to electronic transactions?

The interpretation clause of the CPA provides that where there is an inconsistency between the CPA and another Act (like the ECT Act) the provisions of both Acts must be applied concurrently – to the extent possible, without contravening the second Act. Where this is not possible, the Act that gives the greater protection to a consumer must be applied. And the courts must interpret the CPA to allow consumers to exercise their rights in terms of the common law.

The ECT Act

The ECT Act deals with Consumer Protection in chapter 7. The ECT Act’s consumer protection principles apply only to electronic transactions as defined in the Act and excludes certain specified electronic transactions listed in section 42(2)(a) – (j).  In short, the ECT Act gives the following protection to consumers in electronic transactions:

1. The vendor must provide the consumer with certain specified information of the vendor (section 43);
2. The vendor must provide the consumer with an opportunity to review, correct or withdraw from a transaction (section 43);
3. The vendor must implement a specified secure payment system (section 43);
4. The consumer has a cooling off period of 7 days (section 44);
5. The consumer has certain options in the event of a vendor offering unsolicited goods, services or communications (section 45);
6. A vendor must perform within 30 days from which the order was received, or a time period alternatively agreed with the consumer (section 46).

What sections of the CPA apply to electronic transactions?

Sections of the CPA that do not apply

Now the question arises how to apply the CPA where these ECT Act provisions apply? The CPA gives us the answer. Some sections of the CPA will not apply where the consumer protection principles of the ECT Act apply. These sections of the CPA that do not apply include the following, as quoted directly from the CPA:

1. Consumer’s right to cooling-off period after direct marketing (section 16) – This section does not apply to a transaction if section 44 of the Electronic Communications and Transactions Act applies to that transaction.
2. Consumer’s rights with respect to delivery of goods or supply of service (section 19) – This section does not apply to- (1)(b) a transaction if the performance of that transaction is governed by section 46 of the Electronic Communications and Transactions Act.
3. Disclosure of price of goods or services (section 23) – This section does not apply to a transaction if- (1)(b) section 43 of the Electronic Communications and Transactions Act applies to that transaction.
4. Sales records (section 26) – This section does not apply to a transaction if-(1)(a) section 43 of the Electronic Communications and Transactions Act applies to that transaction.
5. Catalogue marketing (section 33) – This section does not apply to-(1)(b) a transaction if Chapter 7 of the Electronic Communications and Transactions Act applies to it.

Sections of the CPA that do apply

1. A vendor may not require a consumer to buy other goods or services as a condition of offering to supply certain goods or services (section 13);
2. Goods must correspond to the sample and description given to a consumer (section 18(4));
3. A vendor must disclose information on goods or services in plain English (section 22) and not in a way to mislead the consumer or prospective consumer (section 24(2));
4. Any provision in an agreement with a consumer that: (i) limits the vendor’s liability or risk; (ii) assumes risk or liability on the consumer; or (iii) requests the consumer to indemnify the vendor, must be drawn to the consumer’s attention (section 49);
5. A vendor must deliver goods or services of good quality, free of defects and reasonably suitable for the purpose for which it was required. Where a consumer specifically informed a vendor of a particular purpose it wishes to acquire the good or service for, a consumer can expect the goods or services to be suitable for that purpose (section 55);
6. A vendor must offer goods or services in its business name (section 79).