Outgoing National Consumer Commissioner’s introspection

October 1st, 2012

By Nomfundo Manyathi

Prior to her contract ending in early September, former National Consumer Commissioner Mamodupi Mohlala-Mulaudzi held a media briefing in Pretoria to discuss the performance of the National Consumer Commission (NCC) in its first 15 months in operation, as well as on the Labour Court dispute between herself and the Minister of Trade and Industry and the NCC’s court case with local auction company Auction Alliance.

The NCC came into operation in April last year, after the enactment of the Consumer Protection Act 68 of 2008 (CPA). Ms Mohlala-Mulaudzi said that since then the commission had reached 22 million people and had handled over 73 000 calls. Ms Mohlala-Mulaudzi said that, as of 15 August, the commission had received over 18 000 complaints, of which 11 973 had been dealt with.

On some of the challenges the commission faced, Ms Mohlala-Mulaudzi said that businesses were using loopholes in the CPA to weaken the NCC. ‘We have been speaking to policymakers to amend the loopholes, but this has not happened as yet,’ she said.

‘Business has failed to meet us halfway in certain respects. We do not believe they are as prepared as they should be to check that their business operations are in order and meet the requirements of the CPA,’ she added.

Major investigations

Ms Mohlala-Mulaudzi highlighted five major investigations by the NCC, which relate to the banking industry, the medical and pharmaceuticals industry, the information and communication technology (ICT) sector, Auction Alliance and car dealership Mahindra South Africa, respectively.

In respect of the banking industry investigation, Ms Mohlala-Mulaudzi said that the commission had focused on the four major banks, namely ABSA, Standard Bank, Nedbank and First National Bank in respect of the fees and charges applicable when consumers use automated teller machines (ATMs). Ms Mohlala-Mulaudzi added that Capitec Bank had also been included in the research. She said that the outcome revealed that often banks did not notify consumers of charges for withdrawing money.

The NCC recommended that banks disclose their fees prior to the transaction, with ATMs providing an opt-out option. This was in line with their responsibility to ensure the protection of consumer rights to plain and understandable language and to be informed of the price of goods before they transact.

In terms of the medical and pharmaceuticals industry, Ms Mohlala-Mulaudzi said that, following an investigation, the terms and conditions of various medical aid schemes were found to be in contravention of the CPA and constituted discrimination based on gender.

As a result of this investigation, the commission made an application to the Equality Court alleging that the medical schemes were in breach of the constitutional right to gender equality.

The respondents in the matter, which are the Council for Medical Aid Schemes and several medical schemes, have written to the NCC’s attorneys arguing that the CPA does not apply to the Medical Schemes Act 131 of 1998 because the latter excludes the application of any law contrary to it.

Renewal of commissioner’s contract

In terms of the Labour Court issue between herself and the Minister of Trade and Industry, Ms Mohlala-Mulaudzi said: ‘I believe that, as the Consumer Commissioner, I have worked hard and excelled. I have gone beyond my call of duty in relation to the demands in terms of the Act. My team and I have made sure that consumers are better off. We play a very important role in society and it is fundamental that consumers have an institution such as ours. … An institution needs to be given three to five years to prove itself.’

Ms Mohlala-Mulaudzi first approached the court after receiving a letter from the Minister informing her that her contract as commissioner would expire on 3 September and that it would not be automatically renewed. She applied for an interdict preventing the Minister terminating her contract and sought an interpretation of the terms and conditions of her contract. The matter was dismissed by the Labour Court.

Ms Mohlala-Mulaudzi’s court bid ultimately failed, as at the final court appearance in the matter the court found that the Minister was not obliged to extend her term of office.

The Deputy Consumer Commissioner, Ebrahim Mohammed, has since been appointed as acting Consumer Commissioner until the position is filled.

Nomfundo Manyathi, nomfundo@derebus.org.za

This article was first published in De Rebus in 2012 (Oct) DR 8.