Consumer Protection Act Article 6: Responsible, Honest and Fair Dealings Part 2
In our previous article we discussed marketing in terms of the Act but in regards to responsible, honest and fair dealings.
In this article, we shall continue on this aspect but specifically in relation to prohibited schemes and practices.
The Consumer Protection Act 68 of 2008 (“the Act”) has specified various practices as prohibited. Previously prohibited schemes and practices were recognised as crimes or a delict (civil action for damages on various causes of action).
Now the Act sets out the following as prohibited:
Pretending to have authorisation – this entails a supplier when making a communication, (such as an offer) implies, represents or states that the communication is authorised by another person or that the communication represents another person, for example, a seller of second-hand vehicle claiming that he is authorised by a specific brand when he, in fact, is not;
Fraudulent currency scheme – this is when a supplier falsely claims that something can be turned into currency by treating it, or exposing it, to various chemicals or items (such as an electric charge). This can include making or issuing currency without being duly authorised to do same;
Fraudulent financial transactions – more commonly known as money laundering, are when ill-gotten gains (the proceeds of unlawful activity) are used to control the proceeds of a specific unlawful activity;
Fraudulent transfer of property – obtaining any property from any other person fraudulently (by any misrepresentation/fraud) with the intent to induce or defraud another to confer a benefit in relation to that property if the same is made on the understanding that the benefit has already been paid for or will be paid for in the future;
False information – falsely representing that a supplier is in possession of any property, information regarding the property, its whereabouts, or any legal rights or claims in relation to the property;
Unauthorised disposal of property – inducing another person to participate, for a fee, in affecting to transfer property that the supplier has no authority to transfer;
Multiplication schemes – when offering or guaranteeing an effective annual interest rate of at least 20% above the Repo Rate offered by the Reserve Bank;
Pyramid schemes – consumers receive an investment return from other participants in the scheme and not due to the sale of goods or the providing of any services;
Chain letter scheme – consumers recruit new members and receive a share of what the new members pay and thereby move to higher levels in the scheme. It is not a requirement that the new members receive any goods or services in exchange for any amount paid.
It should be noted that the above is not fixed as the Minister may declare further schemes and offers fraudulent and therefore prohibited.
***Kindly note that the contents of this article are intended for information purposes only and do not constitute legal advice. Please consult an attorney