Queen Munyai | Chief Executive Officer | Consumer Goods & Services Ombud | mail me |
The Consumer Goods and Services Ombud (CGSO) wishes to announce that an appeal against a High Court decision that declared the Consumer Goods and Services Industry Code of Conduct valid has been withdrawn.
This decision means that the legal uncertainty surrounding whether eligible businesses in South Africa should sign up with the CGSO and pay the participation fee is now settled as the High Court decision is now final and binding.
Background
The CGSO Industry Code of Conduct was promulgated by the Minister of Trade and Industry in April 2015 to support and uphold the Consumer Protection Act (CPA).
In terms of the Code, all eligible companies are compelled to subscribe to the Code by registering with the CGSO, declaring their annual turnover, and paying the annual participation fees. The CGSO is a not-for-profit organisation and is funded solely by industry participation fees.
On 26 March 2021, in the matter of the Consumer Goods and Services Ombud NPC, Case number 18096/2017 the High Court of South Africa, Gauteng Division, confirmed the lawfulness of the Consumer Goods and Services Industry Code of Conduct (the Code) as well as the powers vested on the CGSO to levy annual participation fees based on the parameters set out in the Code to determine the fee.
The court ruled that not only must all qualifying businesses in South Africa subscribe to the Code by registering with the CGSO, declaring their annual turnover, and paying the annual participation fees, but that the CGSO is entitled to approach a court or the National Consumer Commission (NCC) to report any contraventions of the Code. This includes failing to register with the CGSO or non-contribution towards the funding of the CGSO.
If warranted, the National Consumer Commission can issue compliance notices or refer matters to the National Consumer Tribunal, which has the power to make binding decisions or levy administrative fines of up to 10% of an entity’s annual turnover.
Outcome
An appeal was lodged but has now been withdrawn by the appellant. The full judgment can be accessed on the CGSO website.
