Companies should not take the Consumer Protection Act lightly in the hope that government will not be able to enforce the legislation, a legal expert has warned.

Roger Knowles, speaking at Dimension Data’s Accelerate conference on Thursday, says some companies have taken the approach that the act “won’t work” because of the complexity involved in enforcing it. “It’s not that simple,” he says, warning that the National Consumer Commission, created in terms of the act, has sweeping powers and can impose administrative fines of R1m, or 10% of turnover, whichever is lower, for businesses that infringe the law.

“Don’t think for one moment it’s not going to happen,” Knowles says. “And don’t think for one moment your lawyers can put a clause in your contracts that will get you out of this — because you can go to jail if you try and get around the provisions of the Consumer Protection Act. It’s that bad.”

The act was created to give ordinary consumers greater power in their dealings with suppliers. Knowles describes it as SA’s first “American-style legislation” in that it gives “massive power” to consumers. “Every business … has to go through this act and work out what they have to do,” he says.

Knowles warns that there are dangers lurking everywhere in the legislation for business. For example, he says, where an employee becomes liable under the act, their employer also becomes liable (unless the employee has committed a criminal act).

“Fica (the Financial Intelligence Centre Act) was a pain, but it’s an itchy bite compared to this one,” says Knowles. “It means a complete change for everybody in our business. It’s not just a case of management reading the act a dozen times and saying, ‘I know where we are, we’re fine’.”

The act came into force on 1 April. — Staff reporter, TechCentral