Download National Consumer Commission

Portfolio Committee on Trade and Industry
Date: 06 September 2012
Presenter :Ebrahim Mohamed
Acting Commissioner
National Consumer Commission
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Presentation is a report prepared in compliance with a request by the
Parliamentary Committee on the Department of Trade and Industry
• Complaints status
• Matters before the Tribunal
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COMPLAINTS
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Overview
The enforcement and investigations division has three
Directorates(units)
• Investigations ,
• Complaints Handling
• Alternative dispute resolution (ADR )
This report focuses on the Complaints Handling and the
Alternative Dispute Resolution Directorates as it provides a
status update on the Complaints
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Complaints Handling Directorate
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COMPLAINTS HANDLING
DIRECTORATE(UNIT)
• Complaints Handling Unit (CHU) is one of the units within the
Enforcement and Investigations division of the National Consumer
Commission.
• The unit is tasked with the function of ensuring amicable resolution of
consumer complaints through facilitating communication between
consumers and suppliers
• The Complaints Handling Unit deals with all consumer related complaint
except those excluded by the Act.
• The National Consumer Commission in its efforts to improve the process
flow in complaints handling has developed two work streams and the
work structure is as follows.
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Work Stream One
– Contact Center - the first interface between the Commission and consumers
is through the contact center. The Commission has a call center, consisting of
5 telephones. Complaints are received through fax, email and by post. The
consumers also come in person to the Commissions’ offices. Most of the
complaints are received through email and fax.
– Walk-ins - Are complainants come to the National Consumer Commission
offices in person to lodge their complaints, query various issues, or request
verbal explanations of the written compliance notice.
– Categories-The categorizing of complaints from all sector of the economy,
including Motor Industry, Retail and Manufacturing ICT, Time-Share, Fitness
centres, Property, Financial Services , Government and Municipality, Medical
and Education Sector.
– Referencing - where all the complaints received are registered and provided
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a reference number.
COMPLAINTS CONTINUED
Work Stream One
– The Acknowledgement were all complaints received are acknowledged
within twenty-four hours
– Letter to the respondent - The letter attaching the complaint received is sent
to the respondent. The respondent is given 7 days to respond .
– Reformulations- This refers to matters received which do not constitute a
complaint as defined in the Act. These matters are sent back to complainant
and can be dealt with in two ways: either the party can reformulate the
complaint as per the guidelines and the matter becomes a complaint as
defined, or the party can abandon the matter and the file is closed.
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Work-Stream-Two
• Complaints are escalated from work-stream one to work stream two
on a weekly basis. The complaints are checked against the
accompanying spread sheet. Before the complaints are
categorized; they are captured on the work-stream 2 spread sheet
for allocation purposes When categorizing complaints, it is when we
assess the dominating categories and which are less likely to
complaints.
Follow-up Process
 After the complaint have been assessed, processed and
categorized; they are distributed to the respective individual
dealing. Follow-up are then conducted to both respondent and
complainant.
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Work-Stream-Two
 Some complaints get resolved or settled at the level of entry than
others, varying with the nature of complaints. Follow-up is
conducted in various forms, namely: telephonically, by email and
by post (however posting is the last resort if we the consumer
cannot be reached through any other form of communication).
Consumers updated on the responses received.
 Where there are settlements after telephonic interventions , a
consent agreement is prepared. Where there is no response from
the respondent ,a default compliance notice is issued so as to not
prejudice the consumer any further with undue delays.
Block Meetings
 The Purpose of the block meetings is to stream line complaints
received against one supplier in order to improve on the
effectiveness and efficiency of complaints handling .this is done by;
 -Agreeing with suppliers on the best method of Communication to
ensure speedy resolution (personal delivery, email, courier, etc.) 10
Analysis of All complaints per
category
currently being dealt with in the complaints Handling Directorate
1367
1198
700
862
513
424
44
85
240
230
148
120
73
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TREND ANALYSIS
Category
Total Number
Type Trends
Motor Vehicle
1367
Financial Services
424
Retail
1198
Promotions and Fraudulent Schemes
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Misleading information, defective cars, poor service, undisclosed information from
dealers and unfair business practice. The majority of complains are against small
dealership and large dealership. There is a tendency for dealers to mislead consumers
when they take their cars for repairs and service by quote them a specific amount but
upon collecting the car they notice that the amount has changed.
Misleading information, unfair business practice, unfair terms and conditions and
unauthorized debits. Debt Councillors to fail to distribute the money accordingly to credit
providers. Financial Institution to continue debiting consumers accounts after the
consumers have settled their accounts.
The majority of complaints received are about request for refunds, Exchanges and
Returns, replacements for defective goods, unfair business practice and poor quality
goods.
The majority of complains received are about cancellation of contracts, refunds and
consumers been unfairly black listed and high instalments.
Computers
85
Timeshares
240
Travel & Tourism
230
Fitness Centre
148
Medical Services
120
Defective goods, faulty laptops and computers. Failure to repair goods, misleading
information, undisclosed information and failure to repair goods while still under
warranty.
Contract cancellation, misleading information and unfair terms and conditions. Most of
the complainant cancel their contract due to the fact that they cannot afford the high
installments and also because they have never used their points. We have received
numerous complaints against Holiday Vacation Club, Fexi Club and Easy Holiday Club
The majority of complaints are about unfair business practice, refund for cancelled
bookings and poor service. Most complainants complain about poor communication from
airways.
Contracts cancellation, unauthorized debits over expired contracts and unfair business
practice. Consumers cancel their contracts they are being charged a higher penalty fee of
50% and this practice popular with Planet Fitness but other fitness centres charge a
reasonable penalty fee.
Medical Service complaints comprise of inability to settle medical bills by medical aid
schemes which leads to consumers being unfairly blacklisted.
A lot of consumers complain about the terms and conditions of their medical Aid.
There is also a tendency for Medical Aid Schemes to overcharge consumers and most
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complaints are against Private Doctors, Private Hospitals and Medical Aid Schemes
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Government & Other Municipalities
Most complaints are lodged against Government. Institutions and Municipalities. The
majority of complaints are about poor service, failure to reconnect electricity even after
settling the account that was in arrears and poor service
700
Property
The majority of complains are against estate agents, body corporate and property agents.
Common trends within this category are misleading information, cancellation of
contracts, cancellation of lease agreements, poor workmanship, poor service and refunds
on deposits.
862
ICT- Information Communication Technology
Matters are about incorrect billing, unfair blacklisting and unfair business practice. The
majority of complains are lodged against Multichoice (DSTV), SABC and Telkom.
But the majority of complains are lodged against Telkom and the most common trend are
about expired data bundles, slow internet connection, failure to deliver service promptly
and also the inability to connect lines after settling accounts that have been in arrears.
Network providers to trick consumers into the idea that they have won cellphone
whereas it’s actually a contract phone and as a result the consumer end up being
blacklisted and it affects the consumer’s credit record.
Most customers cancel their contracts due to delayed delivery of handsets, delivery of
wrong items and poor service.
Reformulations
513
This refers to matters received which do not constitute a complaint as defined in the Act.
The ‘A’ files can be resolved in two ways: either the party can reformulate the complaint
as per the guidelines and the matter becomes a complaint as defined, or the party can
abandon the matter and the file is closed.
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Complaints Resolution rate in
Complaints Handling Directorate
(I April to August 2012)
COMPLAINTS RECEIVED AND RESOLVED
Resolved
34%
Total
Complaints
66%
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Alternative Dispute Resolution Directorate
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ALTERNATIVE DISPUTE RESOLUTION
DIRECTORATE (UNIT)
• Alternative Dispute Resolution Unit (ADR) is one of the units within the
Enforcement and Compliance division of the National Consumer
Commission.
• The mandate of the unit is to facilitate an amicable resolution of
complaints between disputing parties using alternative Dispute Resolution
mechanism mainly conciliation.
• The Unit provides a platform for parties to a complaint to engage in an
open negotiation of the complaint with an aim of reaching an amicable
agreement.
• The Alternative Dispute resolution unit deals with all consumer related
complaint except those excluded by the Act.
THE CONCILIATION PROCESS
• Parties are invited in an attempt to assist the parties with reaching an
amicable settlement of the complaint
• Notices of set-down forwarded to complainants and suppliers/ respondent
• Conciliation proceeding done in terms of the guidelines
• All settlement agreements are reduced into consent agreements in terms
of section 74 of the act.
• Compliance notices are issued in terms of violation of the provisions of the
National Consumer Protection Act
METHODS USED TO CONCILIATE
• Telephonic Conciliation – telephonic conciliation is one method used to
conduct conciliation wherein parties deal with the complaint over the
telephone. The purpose of telephone conciliation is to yield speedy
resolution of the complaints.
• Formal Conciliation – Scheduled matter formal conciliation is another
method used to deal with complaints. This process entails inviting both
parties to the conciliation by issuing a notice of set down and giving the 14
days and the purpose is to facilitate a process of finding an expeditious
resolution to the complaint.
Outcomes Anticipated At Conciliation
• Settlement Agreement – when the parties agreed at conciliation then a
settlement agreement is signed by both parties and the conciliator.
• A Non –referral – is when after both submissions have been heard and the
complainant`s case is frivolous, then a non-referral is issued.
• Compliance Notice – a compliance notice is issued in terms of section 100,
read with the rules of the National Consumer tribunal, in terms of the
Consumer Protection Act 68, 2008.
• Compliance notice is a directive from the Commission to the respondent
to comply with the Act and address the complaint.
• The supplier has a right in terms of section 101 (1) of the Act to abject
within 15 days after the service by way of an application to the National
Consumer tribunal.
• The consumer also has the right to approach the National Consumer
Tribunal if they do not agree with the decision taken by the Commission of
issuing a non- referral.
CATEGORIES OF COMPLAINTS
• The unit receives urgent and non-urgent matters.
• All urgent matters are set down within 48 hours and dealt with every
Thursday of the week.
• Non urgent complaint follow the normal process of set down
• Conciliators are allocated files to deal with on daily basis
• Reports are submitted monthly
Analysis of All complaints per category
currently being dealt with in the alternative dispute resolution Directorate
ANALYSIS
CATEGORIE
ANALYSIS
Motor Vehicle
Defective second hand and new motor vehicles, non disclosure of information about
accidents, failure to repair the motor vehicle, warranty issues.
Retail
Defective products, non delivery on goods on time, payment arrangements, refusal to
give refunds especially small companies and poor customer services.
ICT
SABC licensing, expired data bundles, slow Internet connection, incorrect billing and
poor service. Faulty handsets and Roaming charges.Complaints comprise of defective
brand new products that requires repairs.
Suppliers often refuse to repair products still under warranty and blame consumers for
negligence.
Government
Incorrect billing and poor service delivery. Majority of the complaints are from City of
Johannesburg.
Timeshare
Misleading advertising and cancelation of a perpetual contract. Most complaints are from
Flexi Club, Quality Vacation Club and Global Travel Alliance.
Fitness Centre
Cancelation of contract, misleading information.
Financial Services
Most complainants are financed by banks for houses, buying cars and personal loans.
Banking complaints include assets repossessions and unauthorized deductions. The
most common trend in this category is repossession of cars and houses due to failure to
repay back the banks.
Education
Cancelation of agreements, non delivery of books, refusal to refund after cancelation.
Travel & Tourism
Complaints constitute mostly of refunds for cancelled flight a booking which is often led
by miscommunication between the consumers and airline companies.
Complaints about body corporates and metre readings, lease agreements nonrefundable
deposits. Poor workmanship from suppliers and refusal to fix.
Property
Computers
Medical Services
Medical services complaints comprise of inability of Medical Aids Schemes to cover or
settle medical bills and unfair terms and conditions.
ANALYSIS OF CASES FROM APRIL TO DATE
•
•
•
•
•
Cases to be Conciliated
Consent Agreements
Compliance Notices
Non Referrals
Withdrawals
4382
1115
332
262
95
Complaints Resolution rate in
Alternative Dispute Resolution Directorate
(I April to August 2012)
PERFORMANCE OF THE UNIT
Summary of work output
on complaints
April to August 2012
•
•
•
•
Complaints Brought forward -8455
Complaints received –5090
Complaints resolved -4949
Complaints Pending -8596
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Challenges
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•
•
•
•
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Call center personnel
Call center System
Case Management System
Conciliators
Dedicated Fax Machine
Computers
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LEGAL DIVISION
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Overview
The focus of this presentation report from the Legal Division is on :
• Matters that have have been referred by the National
Consumer Commission to the National Consumer Tribunal,
• The rulings of the Tribunal
• and the Commissions view on the judgments.
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• No matter that has been referred directly by the National Consumer
Commission to the National Consumer Tribunal in any of the matters that
has been heard before the National Consumer Tribunal.
• This is in line with the view of the Commission on the enforcement
procedure as set out or at least implied in the Act.
• In terms of that procedure, the Commission has a duty to investigate and
after an investigation, if it is of the view that a prohibited conducted has
taken place, to issue a compliance Notice to which an aggrieved party can
object in terms of section 101 of the Act.
• In all the matters where the National Consumer Commission has appeared
before the Tribunal, it was as a result of the Parties that had been issued
with a Compliance Notice objecting in terms of section 101 and as such,
• The Commission was actually a Respondent and not an Applicant in such
matters.
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The National Consumer Commission issued compliance notice on the following
matters all of which were objected to and some of which have already been heard
before the National Consumer Tribunal:
•
•
•
•
•
•
•
•
•
•
•
City of Johannesburg
Top TV
Telkom Fixed line
Telkom 8ta
Telkom in re Prinsloo
BMW South Africa
Multi-choice
Mobile Telephone Networks
Vodacom
Cell C
Volkswagen
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•
•
•
•
•
•
•
•
•
•
•
Citroen
Primi World
Audi
Auction Alliance
Toyota
Mercedes Benz
Tata
ADT Security:
National Home Builders Registration Council
Dynabidz
Old Fashion Chips
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City of Johannesburg:
• For poor quality service in breach of section 54 for failure to attend
timeously to consumer complaints and section 48 for failure to render an
accurate account
• The National Consumer Tribunal dismissed the Compliance Notice based
on the argument that the NCC did not conclude an investigation and that
the Commission cannot issue a compliance notice based on the fact that
the Coj was frustrating the Commission in implanting agreed dispute
resolution procedures.
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Top TV:
• For consumer subscriber agreements that are in not compliant with the
Act especially section 13, 14, 51, 54 and 56.
• The National Consumer Commission withdrew the Notice after it was
agreed that the judgment in the Multichoice matter, where the issues
were identical, would be applicable to the To TV matter.
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Telkom Fixed line:
• For subscriber agreements and or terms and conditions that are none
compliance with the Act particularly sections 14, 19, and regulations 5,
120 and 44 of the Act.
• This matter has not yet been set on the roll but both parties have since
worked on the agreement and it is ready to be approved as compliant.
Telkom 8ta:
• For subscriber agreements that are none compliant with the Act: For
violations of sections 14, 19 and regulations 5, 120 and 44.
• The parties agreed to continue working together on the agreement after
the issuance of a compliance notice and the agreement is ready to be
adopted as compliant.
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Telkom in re Prinsloo:
•
For failure to account properly and switching consumer electricity off when he
complained in violations of section 40, 48. Application in terms of section 114 of the
Act issued by the Commission for interim relief.
•
The Commission set aside the Commission application on the basis that the
Commission does not have the locus standi in a section 114 application.
BMW South Africa in re Bonn and Rogers
• for failure to comply with sections 54 and 55 which deals with defective goods. Both
matters have been heard and the Commission is still awaiting judgment.
• It needs to be said though that given the expressions that the Tribunal has made in the
Nyarra matter, that the Commission cannot issue a compliance notice without making
application to declare a conduct prohibited first, it is expected that the compliance
Notices would be set aside.
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Multi-choice:
•
•
For subscriber agreements that are not in line with sections 11, 14, 51, 54 and 56 read
with regulation 44. This is anti-bundling sections.
The Compliance Notice was set aside on the basis that the Commission did not consult
with Icasa as provided for in section 102. The Commission did consult with Icasa on the
26th August 2011 but the Tribunal agreed with a contention by Multichoice that the
consultation was not consultative enough
Mobile Telephone Networks:
•
For subscriber agreements that are in violations of sections 14, 48, 54 and 65 as well
as Regulations 5, 120, read with 44.
•
The matter was originally set down to decide if the Commission was correct by issuing
a compliance notice against MTN Pty Ltd instead of MTN Service Provider Company
Pty Ltd. The Tribunal ruled in favour of the Commission and the matter was set down
to determine if the procedure followed by the Commission was correct.
The Tribunal then ruled that the Commission has failed to follow procedure because
the consultation required by section 102 was not a proper consultation. The
Commission had consulted Icasa on the 26th August 2011.
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•
Vodacom:
• For subscriber agreement that is in violation of sections 14, 46, 54,
61, and 63 read with regulation 5, 120, and 44.
• Like in the MTN matter, Vodacom also took issue with the
Commission at the Tribunal that the Commission was not supposed
to issue a compliance notice against Vodacom Pty Ltd but Vodacom
Service Provider Company Pty Ltd. Unlike in the MTN matter where
the facts were identical, the Tribunal ruled that the Commission
was not supposed to issue a compliance Notice against Vodacom
Pty Ltd.
• The Tribunal also ruled that a consultation that the Commission
held with Icasa was not a proper consultation.
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Cell C:
• For violations of sections 14, 63, 48 and 54 of the Act for airtime and data
bundles that expire before three years as prescribed by the Act.
• The Tribunal ruled that it has already decided that the Commission did
not properly consult with Icasa and agreed with the contention that the
compliance Notice was issued on an out-dated agreement.
• The Commission still maintains that even the current agreement is in
violation of the Act and argues that the arguments of whether the
agreement is compliant or not cannot be made as a procedural argument
but only after hearing arguments on substantive issues.
Volkswagen:
• For defective products in violations of section 55 and 56 and for an
unconscionable conduct in terms of section 40
• The matter has not yet been heard.
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Citroen:
•
For defective vehicle in violation of sections 55 and 56 of the Act. The matter has
been heard but the judgment is still outstanding.
•
Given what the Tribunal has said in the Nyarra matter, the Commission believes
that the Tribunal would set it aside on the basis that the issues aroused before
the coming into effect on the Act.
Primi World:
•
For failure to comply with the section and regulations made for franchises.
•
The matter has not been set down yet.
Audi
•
For defective engine and refusal to refund or repair in violations of sections 55
and 56.
•
The matter has not been set down yet.
•
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Auction Alliance:
• For conducting an auction in violation of section 45 and all regulations
made in terms thereof.
• The matter was heard and the Tribunal has ruled that the Commission
issued a compliance notice against the wrong party and that is the
Liquidators.
• The Commission still maintains that the agreement that it reached with
the Liquidators in terms of which they were allowed to sell did not mean
that they were not in breach of the Act.
•
The Tribunal was also aggrieved by the media statements that were
made by the Commission leading to the issuance of the Compliance
Notice and also the fact that it was said in the judgment that the
Commission issued fines which is incorrect as well.
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Toyota:
•
•
For selling a defective vehicle and refusing to repair or replace
The matter is still to be set down.
Mercedes Benz:
•
For misleading advertising of a vehicle to a disabled person
promising that the vehicle has certain qualities for his disabilities.
•
The matter has not been set down. The company has not followed a
proper procure prescribed for filling an objection.
Tata
•
For selling a defective vehicle and refusing to replace and repair
the vehicle.
•
The matte is still to be set down.
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ADT Security:
•
•
For refusal to cancel a contract in violations of section 14 after failing to
provide a service.
The matter has not yet been set down.
National Home Builders Registration Council
•
•
For refusal to hold provide timeous service to the consumer who was
complaining against a Home Builder.
The matter has not yet been set down.
Dynabidz:
•
•
For operating a financial scam as an online auction in breach of section 45
and regulations made in terms thereof.
The matter has not yet been set down, but it looks like the person against
whom a compliance notice was issued has absconded.
Old Fashion Chips:
•
•
This is a franchise matter where there was no full disclosure.
The matter has not been set down.
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Thank You !!!
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