E-commerce accounts for the most complaints per sector
E-commerce accounts for the most complaints per sector
Consumer legislation in SA is outdated and does not fully address contemporary e-commerce problems, particularly in the regulation and supervision of international vendors, the head of theconsumer ombudsman’s office says.
There was need for increased consumer education, better redress mechanisms and legislative updates to match international standards, consumer goods and services ombudsman CEO Queen Vhulahani-Munyai said at the release of the office’s annual report on Tuesday.
The Electronic Communications and Transactions Act and the Consumer Protection Act — enacted in 2002 and 2008, respectively, to give respite to consumers maltreated by sellers and service providers — are outdated given the rapid evolution of e-commerce.
Vhulahani-Munyai said though both pieces of legislation offered some respite to consumers, issues often arose with international vendors that created additional complexities.
Since the Covid-19-induced lockdowns in 2020, e-commerce has accounted for the most significant number of complaints per sector.
“This year was no different, although the volume of complaints relative to other sectors fell from 34% in the period prior to 26%,” the annual report reads.
“Whether this is due to service improvements on the part of e-commerce vendors, shoppers returning to brick and mortar stores or consumers getting redress elsewhere, such as a chargeback request from their own bank, is not known.”
The need for updated consumer protection laws is clear and efforts are under way to engage regional counterparts and academic institutions to address these gaps and improve consumer protection frameworks.
According to the report, online transactions, which represent only 5% of total retail sales in SA, are a major source of consumer complaints and account for 17% of grievances lodged with the consumer goods and services ombudsman.
This trend, according to the ombudsman, shows the challenges consumers face with online shopping, where they often cannot inspect goods physically or return items easily.
The issues complained about primarily revolved about delayed or non-delivery of acquired goods and services, defective products and unmet expectations.
Electrical appliances and telecommunications services also ranked high among complaints.
Efforts to address these issues include the consumer goods and services ombudsman’s collaboration with the ombudsman for banking services to educate consumers about their rights when online purchases go awry.
While a 26% drop in online complaints year on year could suggest progress, it may also reflect improved vendor practices or increased use of chargebacks by consumers, consumer goods and services ombud Liaquat Soobrathi said.
Soobrathi expressed optimism that these efforts would contribute to a more robust consumer protection environment, ensuring that SA laws kept pace with global standards and effectively safeguard consumers in the digital age.
“The next generation of lawmakers and lawyers will be critical to ensuring that our consumer protection legislation remains current and effective,” he said.
Globally, legislative measures are evolving to better protect online consumers.
For example, the US has enacted the INFORM Consumers Act of 2023, which mandates online marketplaces to verify and disclose high-volume third-party sellers’ details. Similarly, the EU and the UK have introduced regulations to enhance transparency and consumer protection in online transactions.
The consumer goods and services ombudsman’s report shows it managed to get refunds worth more than R12.1m for consumers in the 2023/2024 financial year, a slight decrease from the R12.9m it facilitated in the previous year.
Total claims submitted were nearly R80m, largely due to misunderstandings about what constitutes compensable damages under current laws, it reports. Consumers continued to lack a clear understanding of the laws related to claims and complaints, resulting in insufficient protection for them.
Vhulahani-Munyai noted that many consumers erroneously sought compensation for consequential damages.
“One such example is the complainant who sought our assistance in claiming over R703,000 for damages following an incident in which the battery in his mobile phone exploded,” she said.
“The complainant wanted the supplier to compensate him for post-traumatic stress based on the risk of being severely burnt, potential damage to the home, and the risk such an incident posed to the lives of people, pets and valuables in the house.
“The supplier rejected the claim because there was no proof that the battery exploded due to a manufacturer’s defect, and the matter was closed because the Consumer Protection Act makes no provision for consequential damage,” she said.
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