Consumer watchdog laments understaffing as it tackles Ford, unsafe meat, timeshare cases
As far as it is able, the National Consumer Commission will try to make sure suppliers of unsafe goods are fined and losses to consumers are recovered - despite being understaffed by some 50%, members of Parliament heard.
The NCC's acting commissioner Thezi Mabuza, and other executives on Tuesday briefed Parliament's portfolio committee on trade and industry on its financial outcomes for the 2018/19 year.
The NCC is the primary regulator of consumer-business interaction in South Africa. It falls under the oversight of the Department of Trade and Industry (dti) to ensure the economic welfare of consumers.
Its key strategic outcomes are to promote consumer protection and consumer safety, promote the reform of consumer policy and compliance with consumer protection laws and ensure public awareness of consumer protection.
Among the notable cases investigated by the NCC are complaints regarding the timeshare industry as well as investigations into the combustion of Ford Kuga engines.
However, the commission is understaffed – with only 50% of its proposed structure being filled, members of Parliament heard.
The commission does not have the resources to take every case it investigates to the National Consumer Tribunal, said company secretary Babs Kuljeeth.
"[It is] cheaper and more progressive and effective to get parties together around table to deal with it," he said. The NCC aims to resolve problems amicably in a way that uses its limited resources sparingly, he explained.
In terms of the matters dealt with in the 2018/19 year, the NCC gave an update on the progress made:
The timeshare industry is undergoing a regulatory overhaul, this after an inquiry was held into thousands of complaints received by consumers.
While a legislative review of timesharing is underway by the dti, in the interim, the NCC has agreed with the Consumer Goods and Services Ombud that it will assist in resolving complaints related to timeshare.
In the last four months the NCC has persuaded timeshare service providers to cancel more than 997 contracts in relation to complaints that have been filed. Only 233 complaints are outstanding.
The estimated amount written off by the clubs for the cancellations is currently standing at R1.6m and the amount is expected to increase dramatically, according to the NCC's presentation to Parliament.
Cooperation from the industry has been positive, barring one service provider which insists on charging a cancellation fee, the NCC noted.
Motor vehicle complaints
A trend in complaints emerged of certain motor vehicles sellers not being willing to comply with a six-month warranty right for consumers.
Some suppliers are providing a one-month warranty and insist that consumers purchase mechanical breakdown insurance, the NCC said. So far 34 investigations were conducted.
Nine applications were made to the National Consumer Tribunal to declare certain investigated conduct as prohibited conduct.
Chester Wholesale Meat
This matter relates to the provision of unsafe goods, Mabuza told the committee. The NCC teamed up with the department of agriculture, land reform and rural development for the inspection. Following the collection of evidence, a criminal case was opened with the SA Police Service Commercial Crimes Unit in Durban, where the wholesaler is based.
The criminal case has been finalised and with a fine of R1.44m issued. Half of the fine was suspended for two years.
Mabuza said the NCC only has power over to administer a fine to the supplier. The NCC plans to take the matter to the Tribunal and will discuss issues of an administrative fine in relation to the Consumer Protection Act.
Ford Kuga investigation
The NCC finalised its investigation into Ford Motor Company. While Ford has proposed entering into a settlement agreement, the NCC said if an acceptable agreement is not received by November 30, 2019, it will take the matter to the Tribunal.
The NCC is precluded from claiming damages suffered by individual consumers.
The NCC said most consumers have been refunded by Ford. The outstanding issue relates to the violation of the Consumer Protection Act.
Once Ford accepts that it engaged in prohibited conduct, then any consumer that suffered damages arising from the conduct can proceed to court to seek damages, without having to prove prohibited conduct.
Mabuza said that the NCC is currently negotiating with Ford to accept its conduct was "prohibited".
"Once we have that and get a certificate, that certificate will allow people affected to approach the court to get their matters in relation to compensation as they were affected differently," she said.
The NCC is also looking for guidance from Australia – where a similar matter was dealt with.
"We are applying our minds to ensure we get the maximum we can get. We do not want the matter to drag as long as possible," she said. Senior council has been appointed to look into the NCC's legal powers.