Ethical business practices: The consumer protection act and socio-economic transformation in South Africa

Abstract

Ethical reputation and customer satisfaction and loyalty are critical factors for South African business. It is the social responsibility of business owners or suppliers to ensure that they carry out good trade practices. Consumers from disadvantaged communities were previously excluded from participation in fair business transactions in many sectors. Access to goods and services was problematic. Apart from certain common law rights for consumers generally, consumer protection was unclear and not codified. In addition, low literacy levels are serious disadvantage for consumers who become easy targets for unfair business practices because of their lack of understanding of their rights or the means to acquire legal assistance. The Consumer Protection Act (CPA) 68 of 2008 addresses these problems. The CPA, which came into effect in South Africa as from 1 April 2011, sets the basis for consumer protection in this country and is the first of its kind. It promotes a fair and accessible marketplace for consumer products and services. It also sets out ethical norms and national standards relating to consumer protection. This article explores specific provisions of the Act, with a focus on the role of business in transformation, as far as consumer protection is concerned, including the significance of plain and understandable language in contracts. It uses a descriptive approach to reveal the social responsibility of business in a transforming society as far as consumer rights are concerned. It concludes that the impact of the Consumer Protection Act for business is far-reaching; that business has a significant role to play with regard to consumer protection and transformation of a historically disadvantaged society, and that the law does play a role in placing pressure on businesses to act in a socially responsible manner. Key words: Consumer protection, transformation, business practices, contracts, consumer rights.