What is an Industry Code and Why do we Need it?

As a specialist in the Consumer Protection Act, I often hear suppliers complaining that the Act was just not written for their industry as it doesn’t accommodate their particular circumstances, customs and constraints.

Section 82 of the Consumer Protection Act empowers an industry to put a code of conduct in place for the industry, which, once accredited by the Minister of Trade and Industry, binds all of the industry members. Such a code can include the creation of an industry ombud. Once there is an ombud in place for an industry, each supplier in the industry, as well as the National Consumer Commission should refer all consumer complaints in respect of that industry to the ombud.

Several industries have already applied for accreditation: the consumer goods and services industry, advertising and motor vehicles.

Why should each industry consider putting a code in place?

  • The code is there to streamline the mechanisms for dealing with consumer complaints. Having a code and ombud can mean that industry members are released from the responsibility to deal with serious consumer complaints, which are instead channelled to an ombud, who is able to deal with consumers in a legally compliant, authoritative and consistent manner. The ombud knows and understands the industry, and the challenges faced by industry players.
  • The code would have the added benefit of softening the impact of the Consumer Protection Act on the industry by customising its provisions so that they make better sense in an industry’s context.
  • An industry code creates the perception that the industry is legally compliant and sensitive to consumer rights.
  • A code reduces the reputational risk for industry members and for the industry as a whole, since consumers are less likely to resort to the press with complaints if their perception is that their concerns are being adequately addressed.

As consumers become more aware of their rights, the benefit of having an industry code and the positive image it exudes, becomes ever more important for suppliers. Industries that need to seriously consider such a code include the education service providers, the construction industry, the restaurant, food and beverage trade, local government, the medical and related professions and hospitals, the medical aids, and the transport, pharmaceuticals, estate agents, telecommunications and entertainment industries and credit bureaux.

Trudie Broekmann

Trudie obtained a BA and LLB from Stellenbosch and a Diploma in International Law from Antwerp, before being admitted as an attorney in 1999. She spent 4 years as legal advisor to I&J and 4 years practicing commercial law at Webber Wentzel (formerly Mallinicks) before leaving to focus on her commercial practice. Trudie joined Caveat Legal in early 2013 and focuses on corporate, commercial and consumer law.

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