Home Articles ANALYSIS: Should you belong to the consumer goods and services ombud

ANALYSIS: Should you belong to the consumer goods and services ombud

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The Consumer Goods and Services Ombud was established to guide the consumer goods and services industry on the minimum standards of conduct expected when engaging consumers, and to assist the industry in resolving consumer disputes.

The office of the Consumer Goods and Services Ombud (CGSO) is the consumer goods and services industry’s compulsory Ombud scheme, and was set up in line with the Consumer Protection Act 68 of 2008. The Consumer Goods and Services Industry Code became law on 29 April 2015.

At the same time, the CGSO was accredited as the official ombud scheme for all entities whose business activities fall within the supply chain that provides, markets and/or offers to supply goods and services. The CGSO is a non-profit company that operates independently of consumers, suppliers and government.

It is mandatory for all eligible businesses to comply with the provisions of the code; to register with the CGSO in accordance with the procedures provided on the CGSO website from time to time; and to contribute towards the funding of the CGSO in accordance with the funding model approved by CGSO’s board. The CGSO’s budget is based on the assumption that all eligible businesses will pay their share. Eligible businesses include all suppliers in the consumer goods and services industry, including retailers, suppliers, wholesalers, distributors, manufacturers, importers, intermediaries, logistics and supply chain agents. Current participants include Coca-Cola, the Spar Group Limited and Woolworths (Pty) Ltd.

The code does not apply to any business that belongs to an industry that is regulated elsewhere or falls under another recognised ombud scheme. These exclusions include estate agents, medical aid societies, lawyers, doctors and dentists, the automotive industry and financial institutions.

The CGSO represents a partnership between private enterprise and the state and it has in effect taken over the dispute resolution role previously performed by the National Consumer Commission. Businesses and their customers benefit from a speedy, cost-efficient scheme that focuses on restoring relationships rather than legal compliance. In the 2014/15 year, the complaints of 4 583 consumers were resolved in an average of 39 days.

A failure to comply with the code amounts to a contravention of section 82(8) of the Consumer Protection Act. If an eligible supplier fails to pay the fees or levies owed by it, the CGSO is entitled under the code to take legal action against them. This is regrettably a step that CGSO is contemplating taking against a number of suppliers that are dragging their feet in registering and paying their share of the CGSO’s operating costs.

THE CGSO’S PROCESS

A complainant may first refer the matter in dispute to the participant, who then has 15 business days or such extended period as agreed between the parties to resolve the complaint. If the complainant is not satisfied with the outcome, he or she may approach the CGSO.

If the complaint is one that appears to fall within the CGSO’s jurisdiction, the CGSO informs the participant and gives it 15 business days in which to investigate and attempt to resolve the dispute with the complainant or to provide the CGSO with its reasons for repudiating the complaint.

If the complaint is still unresolved, the CGSO assists the parties to resolve it by means of facilitation, mediation or a written recommendation.

Businesses that are eligible to register should take note of the fact and ensure that they register and in doing so aid their customers in a speedy dispute resolution process as well as being noted as a business that follows the minimum standards of conduct when engaging customers.

AUTHOR |Juanita Steenekamp CA(SA) is Project Director: Governance and Non-IFRS Reporting at SAICA