Elizabeth de Stadler, a leading specialist in the field of Consumer Law and author of Consumer Law Unlocked, takes a look at the consumer’s right to return goods and the problem this has created for the automative industry.
The consumer’s right to quality goods plays a particularly significant role when consumers are buying expensive items such as cars. If the consumer buys a ‘lemon’ very few have the money to rectify the situation if the supplier is not co-operating. In her article ‘CPA protects you – except when it doesn’t’, Wendy Knowler writes about the ‘decision’ of the automotive industry that the sections of the CPA dealing with defective goods and the consumer’s remedies does not apply to it in the same way as the rest of us.
Here is a quick recap of my previous article: Consumers have the inalienable right to goods that are suitable for their purpose, of a good quality, in good working order, free of defects and durable for a reasonable period of time. If the goods suffer from a quality problem the consumer has the right to have the goods repaired, replaced or to ask for a refund. The consumer can choose which and this choice cannot be limited.
The problem which this creates is that a consumer can return goods for a refund even if the quality problem is relatively small. This is not such a big problem when the goods are cheap. But, when it comes to goods such as motor vehicles the effects can be very harsh on the supplier. Suppose for a moment that you buy a new car and after a couple of days it appears that the windscreen wiper is faulty. Should you have the absolute right to return the car? Or should you have to accept the replacement of the faulty component? If you are entitled to return the car, the supplier will suffer a sizable loss given that the car is now second-hand and has depreciated considerably.
The Motor Industry Ombudsman* argues that the consumer will not be able to return the car, because it is only the wiper that became defective which means that the consumer is only entitled to the return of the wiper as opposed to the whole car. In other words, the component becomes the goods. This argument is based on the reference to components in the definition of ‘defect’. However, that is the only time it is mentioned in the CPA; specifically, the distinction between goods and components is not made in the rest of the sections on quality. In my view the argument is untenable. There are very few goods that do not comprise of components and if the argument is valid, it will mean that the consumer’s right to return goods for a refund will effectively be negated.
Having said all that, I have sympathy with the automotive industry. They are indeed the victims of a particularly strange choice made by the legislature in giving the consumer the unfettered right to return goods suffering from a quality problem. However, the answer to the problem is to change the legislation.
In other countries, the solution to this is to create a hierarchy of remedies. There the consumer is forced to first consider repair or replacement (depending on which is appropriate taking into account the value of the goods, the scale of the problem and the convenience of the consumer) and only becomes entitled to a refund if those remedies are either impossible, cannot be completed within a reasonable time or will cause unreasonable inconvenience to the consumer. This is a simplification of the European Directive on consumer sales and associated guarantees, but the message is clear: consumers are not given free reign when it comes to choosing remedies.
The legislature was alerted to this issue on several occasions during the drafting of the bill, but refused to consider the necessary changes. It would appear that the NCC is now choking on the legislature’s words. This uncertainty is harmful to consumers and suppliers alike.
*In the article it is said that the Motor Industry Ombudsman ‘has been mandated to handle all motor vehicle complaints on behalf of the National Consumer Comission’. A code of conduct and ombud scheme was published for public comment on 15 February 2013, but no subsequent publications have been made. The article refers to a further code of conduct which will be published. The authority for that statement is therefore not altogether clear.
Consumer Law Unlocked by Elizabeth de Stadler provides a comprehensive overview of consumer law – not just the Act – in a way that follows the typical chain of transactions. No business or professional advisor should be without it.
Consumer Law Unlocked is available to purchase at www.siberink.co.za