Online shopping and the Law - Part II

Online shopping has become our haven away from the noise and bustle of real-world stores, real life and the stresses that come with it. You can “window shop” hundreds of stores all while in your pj’s, sipping your wine if you so choose to.

Online there’s choice, there’s sizes, there’s “exclusive online” offers, and everything can simply be added to cart, all with a simple click of a button and the move of your mouse.

It’s how shopping should be.

And millions upon millions of dollar spend supports that notion.

South Africa included.

But with all the choice that surrounds us, lies loopholes and potholes and ways that shoppers may fall victim to unscrupulous sellers. Because of this, we decided to discuss the laws that exist within South Africa that protect buyers from real buyer’s remorse.

To do this – and in our previous article - we started off discussing how the Electronic Communications and Transactions Act 25 of 2002 (ECTA)  has application where online shopping is concerned.

And you must be wondering – is that it? One Act to rule them all?

In short – no. There are other Acts and regulations that find application here. Do we hear a collective “whew” in the air?

With that, let’s get into, shall we?

Other Acts That Protect Online Shoppers

The Consumer Protection Act 68 of 2008 (CPA)

The CPA applies to every transaction for the supply of goods and services within South Africa (unless the transaction is exempted under Section 5(1)(a)-(d) of the CPA -  

“This Act applies to—

(a) every transaction occurring within the Republic, unless it is exempted by subsection (2), or in terms of subsections (3) and (4);

(b) the promotion of any goods or services, or of the supplier of any goods or services, within the Republic, unless —

(i) those goods or services could not reasonably be the subject of a transaction to which this Act applies in terms of paragraph (a); or

(ii) the promotion of those goods or services has been exempted in terms of subsections (3) and (4); (c) goods or services that are supplied or performed in terms of a transaction to which this Act applies, irrespective of whether any of those goods or services are offered or supplied in conjunction with any other goods or services, or separate from any other goods or services; and

(d) goods that are supplied in terms of a transaction that is exempt from the application of this Act, but only to the extent provided for in subsection (5)”.

Further to the above and under Section 8 (a) – (d) the CPA will extend to all transactions regardless of whether the supplier –

“(a) resides or has its principal office within or outside the Republic;

(b) operates on a for-profit basis or otherwise; or

(c) is an individual, juristic person, partnership, trust, organ of state, an entity owned or directed by an organ of state, a person contracted or licensed by an organ of state to offer or supply any goods or services, or is a public-private partnership; or

(d) is required or licensed in terms of any public regulation to make the supply of the particular goods or services available to all or part of the public”.

While South Africa does not have specific laws that regulate online purchases, consumer protection laws will apply to online transactions in the same way they apply to other transactions – including the right to return the goods as Section 20(2)(a) – (d) which sets out as follows –

“(2) Subject to subsections (3) to (6), the consumer may return goods to the supplier, and receive a full refund of any consideration paid for those goods, if the supplier has delivered—

(a) goods to the consumer in terms of an agreement arising out of direct marketing, and the consumer has rescinded that agreement during the cooling off period, in accordance with section 16;

(b) goods that the consumer did not have an opportunity to examine before delivery, and the consumer has rejected delivery of those goods for any of the reasons contemplated in section 19(5);

(c) a mixture of goods, and the consumer has refused delivery of any of those goods, as contemplated in section 19(8); or

(d) goods intended to satisfy a particular purpose communicated to the supplier as contemplated in section55(3), and within 10 business days after delivery to the consumer, the goods have been found to be unsuitable for that particular purpose”.

Of significance with regards to online shopping relates to the advertising of the goods. Online false, misleading, or deceptive advertising can, for example, be deemed unfair under the general clauses of the CPA. Deceptive marketing is governed in terms of Part G of the CPA and section 48 prohibits suppliers from marketing goods or services in a manner that is unfair, unreasonable, or unjust (Scielo).

Part G, Section 48(1) of the CPA sets out as follows –

“48. (1) A supplier must not—

(a) offer to supply, supply, or enter into an agreement to supply, any goods or services— (i) at a price that is unfair, unreasonable or unjust; or (ii) on terms that are unfair, unreasonable or unjust;

(b) market any goods or services, or negotiate, enter into or administer a transaction or an agreement for the supply of any goods or services, in a manner that is unfair, unreasonable or unjust; or

(c) require a consumer, or other person to whom any goods or services are supplied at the direction of the consumer—

(i) to waive any rights;

(ii) assume any obligation; or

(iii) waive any liability ofthe supplier, on terms that are unfair, unreasonable or unjust, or impose any such terms as a condition of entering into a transaction”.

Should a buyer purchase a Louis Vuitton handbag off a seller on Instagram (as an example) and upon delivery of the item find that it’s not the same as the description. Or say it’s a fake Louis Vuitton which was advertised as an authentic one, the buyer would have right of recourse under the CPA (specifically under Section 48).

Further to the above and according to Scielo–

“Where a consumer relies upon a false, misleading, or deceptive representation in any advertisement to his or her detriment, the advertisement may be regarded as unfair, unreasonable, or unjust. Similarly, where the online or social media advertisement falls foul of the plain language requirement, it may also be regarded as unfair. Section 51 of the CPA further prohibits suppliers from making "a transaction or agreement subject to any term or condition if its general purpose or effect is to ... mislead or deceive the consumer". By implication, untruthful and misleading advertising, whether online or offline, is prohibited. The rationale is that they mislead the consumer regarding the characteristics or the nature of the goods or services”.

How is the CPA enforced?

Under Section 85 of the (CPA), the National Consumer Commission (NCC) stands asa regulatory body that “protect the interests of consumers and ensure accessible, transparent and efficient redress for consumers. In addressing complaints that allege contravention of the CPA”.

The NCC –

1. “Promotes the resolution of disputes between consumers and suppliers,
2. Conducts investigations against those suppliers allegedly engaging in prohibited conduct,
3. Refer matters for prosecution to the National Consumer Tribunal, and
4. Promotes compliance with the CPA through advocacy, education, and awareness.
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The NCC further, has the responsibility to protect consumers from hazards to their well-being and safety by ensuring that goods that may be unsafe or pose a potential risk from their continued use or exposure to them, are recalled.

The Consumer Protection Act gives the consumer several fundamental consumer rights, in line with the Constitution of the Republic of South Africa, and the United Nation’s Guidelines on Consumer Protection. Any infringement of these rights is an act of non-compliance with the provisions of the CPA. A consumer of goods and services can file a complaint with the NCC, should their consumer rights be undermined by a supplier”.

In addition to the NCC and should a buyer/consumer find themselves at the short end of the online shopping stick they are able to approach the Consumer Goods and Services Ombudsman (CGSO) where they are able to submit a complaint (find out about the process here) about a product and/or the seller. The CGSO reports to the NCC.

The take-away here? Consumers engaging in e-commerce require protection and this level of protection should be the same as that offered to buyers/consumers who shop in a real-life store.

Finally, is the Advertising Regulatory Board that regulates advertising in South Africa.

Important for online shopping is the fact that the ARBadopted a SocialMedia Code. The Social Media Code serves to “provide a clear set of rules around social media marketing to ensure the protection of consumers and the promotion of ethical conduct by brand marketers across all social media platforms. This comes down to ensuring that all social media advertising does not contain any deceptive, false, or misleading content, which includes deceptive claims, offers, or business practices (by commission or omission). All messaging should be responsible and accurate”.

(Sources used and to whom we owe thanks: Scielo).

That’s a lot to take in and can be a complex problem to solve. If you or someone close to you has fallen victim to an unscrupulous seller or a dodgy transaction online, we implore you to get in touch with us to see how we can be of assistance.

If fact, if you have any questions on the information we have set out above or have a personal issue which you want to discuss with us, please don’t hesitate to contact us at NVDB Attorneys.

We are a law firm that considers honesty to be core to our business. We are a law firm that will provide you with clear advice and smart strategies - always keeping your best interests at heart!