The Consumer Goods and Services Ombud (“CGSO”) was established under the Consumer Protection Act (“the CPA”) to assist in resolving disputes between consumers and the industry.
Certain participants in the industry disputed the authority of the CGSO; specifically, that it had the authority to compel them to register with the CGSO and contribute towards its funding. The CGSO approached the High Court in Pretoria for a declaratory order confirming its authority. The court accepted the submissions of the CGSO and declared the following –
- the Consumer Goods and Services Industry Code of Conduct (“the Code”) was lawfully established in accordance with the requirements of the Constitution and the law and, in particular, the CPA;
- the Code may (and does) make participation in the CGSO mandatory for all eligible businesses as defined in the Code;
- the Code may (and does) require all eligible businesses to pay fees and/or levies as a contribution towards the costs of operating the CGSO;
- the CGSO Board may, and did, declare a fee structure with eligible businesses;
- the CGSO may compel participants to disclose their annual turnover figures to the CGSO for purposes of determining the annual fees and/or levies payable to the CGSO, failing which the CGSO may make a fee determination payable by such participant, which amount shall be regarded as final and binding;
- the CGSO may initiate legal proceedings to recover any outstanding fees or levies owed by a participant as defined in the Code;
- the CGSO, acting in terms of Section 4(1)(d) of the CPA, may approach a court, the National Consumer Tribunal established in terms of the National Credit Act or the National Consumer Commission established under the CPA, alleging that prohibited conduct has occurred in that the Code has been contravened either by a participant –
- having failed to register with the CGSO in accordance with the procedures provided on the CGSO’s website from time to time; or
- having failed to contribute towards the funding of the CGSO in accordance with the funding model as set out in the Code.
Accordingly, participants in the industry who have not already registered with the CGSO are called upon to do so and all participants are called upon to pay their fees and/or levies.
