Queen Munyai | Chief Executive Officer | Consumer Goods and Services Ombud (CGSO) | mail me |
From 1 March 2024, latecomers to the Consumer Goods and Services Ombud scheme will face a five per cent increase on the late joiner’s fee imposed by the Board in March 2022.
The fee is based on a percentage of the annual participation fee, which in turn is based on turnover (see table below). This is the first time the joining fee has been increased since it was implemented in 2022, taking it from 25 per cent to 30 per cent of the annual participation fee.
Mediating disputes between consumers and suppliers
The Ombud scheme was accredited in 2015 by the Minister of Trade and Industry in terms of section 82(2) of the Consumer Protection Act (CPA) to enforce the Consumer Goods and Services Industry Code of Conduct by mediating disputes between consumers and suppliers.
All qualifying entities are compelled to register with us and contribute towards the funding of the Ombud function. Contributions are made in the form of a participation fee based on a percentage of turnover. Membership for small businesses with a turnover of less than R1 million is free and carries no joining fee.
We have helped resolve over 70,000 disputes between consumers and suppliers and plays a key role in maintaining trust and confidence in South Africa’s retail sector. Last year alone, we received around 10,562 complaints, all of which were processed within the 60 days permitted by the Code, with the average number of cases being resolved within 40 days.
As at the end of November 2023, we had 1,794 participants at Group level, representing a retail footprint of over 26,500 retail outlets country wide.
Handling cases fairly and thoroughly
The number of complaints we receive each year has been rising steadily, requiring additional resources to ensure that each case is handled fairly and thoroughly.
The most time-consuming complaints invariably involve organisations that are not members of the CGSO. Significant resources are also spent each year persuading and lobbying eligible organisations to become compliant with the CGSI Code of Conduct – resources that could be better spent on educating consumers, assisting suppliers by sharing best practices, and exposing rogue operators.
Although participation in the scheme is compulsory, not everyone eligible to sign up has done so. Consequently, those who do comply with the CPA are subsidising those who do not.
Our goal in going after eligible organisations is to ensure greater compliance with the Code and the CPA, better treatment of consumers, and a fair funding model. If everyone eligible to join the scheme did so, we would be able to reduce the annual participation fee for all participants. That is a win-win for everyone.
In conclusion
The board is empowered by section 6 of the Code to determine a joining fee, an annual levy and (if necessary) a special levy, based on the relative market share of the participants in each Sector Industry Category, the anticipated number of complaints to be dealt with by the CGSO annually, and the costs of operating the CGSO.
The Consumer Goods and Services Industry Code of Conduct is binding on all qualifying participants. It covers all service providers and retailers not already governed by other Ombud schemes, such as banking, insurance, credit agreements, cell phone billing and mobile networks, vehicle sales and repairs, and tourism.
To find out if your organisation needs to participate in the scheme in terms of the industry Code of Conduct, please contact mail me or visit our website.
