On the Car Insurance Blog we have previously revealed that the Consumer Protection Act might be delayed. This has in fact happened – and we would like to refer to the confirmation provided by the Department of Trade and Industry:
The implementation of the Companies Act and the Consumer Protection Act has been delayed until April next year to give the government and others time to get ready to comply with the legislation, the department of trade and industry (DTI) says.
The decision was made after Minister Rob Davies assessed the “level of readiness of the administrative processes required for smooth implementation”, and requests by affected parties to prepare properly for compliance with the laws, the department said.
“This will enable the department to finalise all processes required to effectively administer these two pieces of legislation.
“The department is in the process of finalising regulations which will give effect to both pieces of legislation, and the postponement will allow time for more consultation with stakeholders before finalisation.”
The ministry said it recognised that the laws would have a significant impact on business practice. The postponement would allow affected parties to adjust their operations.
The legislation had been due to be implemented in the last quarter of the year.
However, there were repeated warnings that business needed more time to prepare to adhere with the onerous requirements in the Consumer Protection Act in particular.
It was argued that companies would have to make a vast financial investment to devise new sales and marketing, pricing, refunds and accounting policies and procedures; conduct extensive staff training; review and reconsider all contracts and product labelling; and purchase or upgrade information technology systems.
Robby Coelho, a partner at Webber Wentzel law firm, said the postponement was welcome but of limited benefit to business for a number of reasons.
“Firstly, the minister of trade and industry has still not published the threshold for determining which companies are to be treated as ‘consumers’ under the act for various transactions. This threshold was supposed to have been published in April 2010.
“Also, while the DTI has said that the publication of the draft regulations is imminent, these have still not been published, meaning businesses have to rely on ‘unofficial’ drafts of the regulations which are likely to change.
“The nature of the Consumer Protection Act and the regulations are such that they potentially impact on the business models adopted by certain suppliers,” Coelho added.
“Lastly, despite the extension of the effective date, until the threshold and regulations are published, it remains very difficult for businesses to properly prepare for the implementation of the act.”
The legislation is aimed at protecting consumers and is part of a project undertaken in 2004 to reform South Africa’s outdated company laws.
[Information from SAPA]
The Act will have far reaching consequences for the Car Insurance Industry – and we will keep our visitors updated on this important legislation!!