The Code of Conduct (Code) for the Consumer of Goods and Services (CGS) industry became effective in 2015. The Code provides for the establishment and powers of the Consumer of Goods and Services Ombud (CGSO) to guide the industry on the minimum standards of goods and services expected when engaging consumers and to assist the industry in resolving disputes arising from complaints about non-compliance with the Code and the Consumer Protection Act 68 of 2008 (the Act) by participants (businesses) in the CGS industry.

The CGSO is the official ombud scheme for all entities whose business activities fall within the supply chain that provides, markets and/or offers to supply goods and services to consumers.

The Code applies to all parties who directly or indirectly provide, market and/or offer to supply goods and services to consumers, unless they are specifically excluded. The Code therefore applies to, among others, producers, importers, distributors and retailers of goods, and to service providers.  Importantly, this means that adherence to the Code is mandatory, unless the limited exceptions apply.

The Code and the CGSO were established in terms of section 82 of the Act in line with the provisions of the Act and failure to comply with the provisions and procedures set out in the Code will be regarded as a breach of the Act.

Since the launch of this initiative, a mere 662 businesses have registered with the CGSO in compliance with the provisions of the Code, despite the fact that businesses are in fact required to register with the CGSO and obligated to pay the annual participation fee due.

The CGSO is entitled under the Code to take legal action against businesses, that supply goods and services to consumers, and even those who simply market their goods or services to the public as they too fall within the ambit of the Act, that are dragging their feet in registering and paying their share of the CGSO’s operating costs.

The CGSO has now, through its legal counsel initiated an application in the High Court, Gauteng for a declaratory order demanding participation in the CGSO by eligible businesses and payment of the annual fees due.

The matter has been placed on the court’s roll for 8 June 2017 and if successful the CGSO will be further empowered to compel all industry players to register with the CGSO and to enforce payment of the annual participation fee by eligible businesses.

Businesses eligible to register should take note of the fact and ensure that they register. In doing so businesses aid their customers in a speedy dispute resolution process as well as a being noted as a business that follows the minimum standard of conduct when engaging customers. It is important to note that customers are entitled to call on the CGSO for assistance even if the supplier of the goods or service received by the customer is not a registered participant and/or failed to pay the annual fee due.

Businesses, as participants under the Code, are required to:

  1. Establish an effective Internal-Complaints-Handling Process that is accessible and understandable to all consumers.
  2. Display prominently on all their trading premises by means of the CGSO decal and on their website, Facebook and any other active social accounts, a prescribed notice that states that they are a participant to the Code and bound by its provisions.
  3. The prescribed notice must furthermore notify the consumer of their right to refer complaints to the GCSO in the event that they are unsatisfied with the supplier’s Internal Complaints-Handling process.
  4. Ensure that the relevant staff and agents in their business have adequate knowledge of the Act and its Regulations issued thereunder, including the provisions of the Code and the business’ own Internal Complaints-Handling process.
  5. Keep detailed records of complaints received for a period of three years.

Our professional and skilled team at BLC Attorneys has the necessary expertise to assist your business in registering with the CGSO, should you be required to do so, to prepare your business’ Internal Complaints-Handling Process and to provide your employees with the necessary training to ensure that they possess adequate knowledge to handle customers’ complaints on your behalf.