by Tawanda Dhliwayo

Need for Consumer Goods and Services Ombud

Empowering the consumer and protecting consumer rights

The newly established consumer ombud will ensure customers complaints are addressed
consumer rights.jpg

The Consumer Goods Council of South Africa (CGCSA) is a Section 21 company representing over 11 000 member companies in the retail, wholesale and manufacturing of consumer goods. The CGCSA recently announced the launch of the Office of the Consumer Goods and Services Ombud (CGSO). The Ombud has been set up in line with provisions in the Consumer Protection Act 68 of 2008 (CPA), which came into full effect on 1 April 2011, and is fully supported by the CGCSA and its members.

The CPA provides for statutory industry ombud schemes to help improve the consumer complaints experience and, in turn, improve business products and systems.

The CGSO was established to provide clear guidelines to retailers on the minimum standards of conduct expected when engaging with consumers; educate consumers on their rights; and to assist in resolving disputes that arise between consumers and the industry in terms of the Act. The ombud will deal with consumer complaints against suppliers within the consumer goods and services industry, including retail, manufacturing and wholesale sectors.

“The launch of the ombud is a show of industry support for the rights of the consumer, and an effort to promote these basic rights and ensure they are respected and protected,” says Gwarega Mangozhe, chief executive of the CGCSA.

The CGSO provides consumers with an effective platform to express their grievances so that a resolution is reached. The hope is that the new retail ombudsman will ease the burden of the National Consumer Commission (NCC) and allow for far speedier complaint handling. The ombud acts independently and objectively in resolving disputes, and is not influenced by any party in making decisions.

Clif Johnston of the SA National Consumers Union says, “SANCU is very happy to have been associated with the development of the ombud. We believe the CGCSA has done this by the book; followed all correct processes; involved everyone; and consulted widely. We are happy to support the ombud scheme.”

Since its inception in 2011, the complaints centre has been receiving an average of 450 calls monthly. Ninety-four percent of all complaints to the CGSO are received via the call centre. Nine out of 10 complaints are resolved at call centre level, making the CGSO’s resolution statistics something to be proud of.

“The Direct Marketing Association warmly welcomes this initiative by the CGCSA to set up both a code and an ombudsman. We believe that this is the future of consumer relations with industry. We think it has enormous mutual benefit for both the consumer and for industry. It saves resources, it saves on costs, and it gives to the consumer a very quick alternative dispute resolution system,” says Alastair Tempest, chief operations officer of the Direct Marketing Association. 

Like all other ombud schemes – banking, motor, insurance – the CGSO will only get involved if the consumer has tried to resolve his/her complaint through the retailer’s own customer care channels, and these attempts have failed.

The commission will then clarify the issue with the complainant and will undertake any necessary investigation. The retailer then has to either provide proof that the matter has been resolved or provide reasons it is unable to do so. The CGSO will then determine if actions or reasons given have been sufficient.

If deemed acceptable, the CGSO will inform the complainant that the matter will be closed unless challenged. During that time set, the CGSO will then negotiate a settlement between retailer and complainant, if it considers it appropriate to do so. Should this be unsuccessful, the CGSO may launch a full investigation into the matter.

The ombud will deal with all suppliers in the consumer goods and services industry, including retailers, suppliers, wholesalers, distributors, manufacturers, producers, importers, intermediaries, logistics and supply chain agents in the fast-moving consumer goods industry. This includes suppliers/subscribers in the consumer goods and services industry who produce, supply, and/or provide services related to food, tobacco, beverages, pet food and pet products, electrical appliances, electronic goods, general merchandise including tools, DIY goods, sporting goods, home care products, LP gas, furniture, textiles, building and hardware material, jewellery, cosmetics, toiletries and fragrances, as well as toys and stationery.

It excludes motor vehicles, banking and insurance, credit, travel clubs, education, competition commission, broadcasting, debt matters, electricity, petroleum, estate agents and government complaints.

The CGSO working group members, associations and consumer bodies contributed and participated in the forming and setting up of the Ombud Office.

Graham Rebello, collaboration executive at Massmart, says: “We welcome the initiation of the CGSO. We remain fully committed to it and we believe it is the right thing to do in providing a fair and open environment for consumers and retailers to engage on issues that need to be resolved.”

Sivi Maharaj, legal adviser for Ellerines, says she is delighted the process has reached a step in the right direction with regard to alternative dispute resolution. She hopes the launch of the CGSO will serve to build harmonious customer retailer relationships.

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