In the first nine months since the appointment of the Consumer Goods and Services Ombudsman, Advocate Neville Melville, in June 2013, the Consumer Goods and Services Ombud (CGSO) dealt with 4281 cases against retailers and suppliers. Between 1 June 2013 and 31 March 2014, the office closed 71% or 3049 of these cases.
“It is pleasing to note that since opening our doors we have been able to help thousands of consumers resolve disputes with suppliers across a range of sectors,” says Melville. “It shows the need for an independent mediator, outside of the expensive court system, to seek fair resolutions for all parties.”
On average,it took the office 16 days to close a case, although more complicated cases took around 74 days.
“There is no doubt that consumers are becoming more aware of their rights and also more demanding, which leads to more time-consuming cases,” says Melville. “The challenge is in striking the balance between the rights and responsibilities of both consumers and suppliers.”
The furniture sector topped the list of complaints, with 600 complaints lodged during the period. Telecommunications companies followed with 444 complaints; motor vehicles (378); appliances (387);clothing (208) and financial services (166).
The types of complaints received by the office were mostly around the delivery and quality of goods or defects in goods; food safety; incorrect pricing; availability of advertised specials; performance of services; lay-by; and contractual arrangements. Complaints which related to credit and motor vehicle industries were referred to the relevant ombud scheme.
Melville says increasing enquiries about service delivery issues are expected as awareness of the ombud scheme grows.
“It’s been three years since the Consumer Protection Act (CPA) was implemented and businesses have responded by improving their customer service, while consumers are more demanding when it comes to disputes,” he adds. “There has definitely been a step-change in the way that many companies treat their customers, however the response to the CPA differs from industry-to-industry and size of organisation.”
He adds that many big suppliers have come to grips with process of complaints and returns and, with the exception of cell phone companies, are not insisting on are pair instead of a replacement or refund.
“There will always be leaders and it’s now about encouraging others to follow their good example.”
The CGSO was set up in 2013 to reduce the burden of consumer complaints on the National Consumer Commission. Amongst its main work, the CGSO seeks to ensure that suppliers uphold the Code of Conduct for the Consumer Goods and Services Industry, which sets minimum standards of conduct for industry when dealing with consumers.
“The challenge is to raise the standard of conduct amongst suppliers and retailers without endangering the vitality and growth of business,” says Melville.
Meville believes that consumers are also more aware of their rights when it comes to complaining, but says they still tend to cling to the myth that they have a cooling off period in terms of every transaction.
“There is still a need to educate consumers about this in particular and of their responsibilities in general,” explains Melville. “We’re working towards a situation where suppliers appreciate the value of independent third party dispute resolution as an extension of the customer value chain and where customers feel they are getting a fair and equitable deal in the process.”
He emphasises that the growth of social media as a channel for customer engagement– both positive and negative – has spurred many bigger businesses to improve their customer relations.
“Ina connected world, it’s much easier and quicker for negative publicity about the way they handle their customers to impact their reputation and bottom line,”says Melville. “Most sales agreements are now in line with the legislation and most companies have set up the necessary processes and procedures for dealing with consumer complaints.”
But he says that many smaller suppliers remain hostile to CPA. “They seem to be denial or angry when their customers complain.”
He believes that this is driven by the idea that South Africa is a third world country and that businesses cannot afford to implement an advanced consumer rights framework.
The CPA is based on 1979 British legislation and follows other emerging nations such as Botswana, which implemented similar legislation in 2003 and India, in 1986. According to UN, 100 countries have implemented legislation based on the UN Consumer Protection Guidelines.
“It is simply incorrect to say South Africa is ahead of the pack when it comes to consumer rights,” says Melville. “If anything, third world countries where consumers generally have low levels of literacy, low incomes, limited access to courts and who face massively imbalanced bargaining powers are the very people who require protection.”
Concludes Melville: “A less adversarial approach to customer complaints resolution is likely to continue shaping the way suppliers interact with their customers, for the better.”
About the CGSO
The Office of the Consumer Goods and Services Ombud (CGSO) is the consumer goods and services industry’s voluntary Ombud scheme, set up in line with the Consumer Protection Act.
The CGSO enforces the Consumer Goods and Services Industry Code of Conduct by receiving and dealing with consumer goods complaints by a consumer free of charge and investigating alleged contraventions.