By Sanele Zondi, Durban Intern
The Consumer Protection Act, 68 of 2008 (“the Act”), is one of the most important pieces of legislation for the indigent. The purpose of the Act as per section 3(1) is to promote and advance the economic and social welfare of the consumer by providing the legal framework for achieving a consumer market that is fair, accessible and responsible. The Act provides for a variety of consumer rights, but the most notable is section 17, which provides that consumers can now cancel reservations, bookings and orders, except for special ordered goods, and the supplier of the goods and services may impose a reasonable charge for cancellation.
The drafters of the Act however left a lacuna that the suppliers of goods and services have been able to exploit and use to their advantage. The term “reasonable charge” is not defined in the Act and as a result suppliers of goods and services often impose exorbitant cancellation charges to prevent consumers from cancelling their reservations, booking or orders, or to make a substantial profit despite the cancellation.
Looking at case law for an interpretation of a reasonable charge, we have found the case of Lombard V Pongola Sugar Milling where the court held that a reasonable charge/remuneration would be the usual charge for the goods. We need to consider the purpose of the Consumer Protection Act, that is to promote the economic and social welfare of consumers. Imposing exorbitant cancellation charges goes against the purpose of the Act as it creates an unfair and inaccessible market, especially to the indigent who were intended to be the beneficiaries of this legislation.
One respectfully submits that most suppliers of goods and services still follow and view cancellation of a reservation or order as repudiation and the imposition of a reasonable cancellation charge as restitution. This however, is not the approach that the Act envisages. The Act envisages the promotion of social and economic welfare of consumers and it is submitted that regulation of the reasonable charge is necessary.