NCC adopts "more modest" strategy

Mohamed - who took over the commission in September last year after the fractious departure of former commissioner Mamodupi Mohlala - said the previous strategy was based on a misunderstanding of the commission's mandate, which was not to intervene or directly adjudicate in the resolution of disputes but to "promote their resolution".

He said the new approach was aligned with the limited resources available to the commission and its legally defined area of jurisdiction. It would also ensure "that consumers did not approach the NCC as a forum of first instance‚ thereby alleviating the complaints burden."

Mohamed said the key mandate of the NCC was to investigate prohibited conduct rather than conciliate complaints. "Not every complaint can be investigated" he said.

This meant it had to work closely with other stakeholders to promote the resolution of complaints, which would be referred to ombud schemes by the commission.

The commission plans to conduct nine proactive investigations in the current financial year and 90 "reactive" investigations would take complaints further.

Conciliation

In terms of the new approach, the conciliation of disputes would be incrementally shifted to respective industry bodies through a process of accreditation of ombud schemes.

Also, provincial consumer protection authorities would be asked to deal with consumer disputes arising within their respective provinces. The department would be approached for additional funds to support the commission which was allocated R45m in 2013/14‚ sufficient for it to meet only 30% of the requirements of its organisational structure this year.

An analysis of the complaints received showed that most (about 80%) emanated from the general consumer goods industry (for example furniture‚ appliances and so on) and from the motor industry. The NCC also ascertained that consumers were mainly interested in having their disputes resolved quickly and getting refunds rather than punishing the businesses responsible for the transgressions.

The past focus on the conciliation of complaints by the commission had led to "constant opposition by business and threats of court action"‚ Mohamed said. This "highly ambitious" strategy based on an "unrealistic budget", which Mohlala adopted, brought her into conflict with businesses and with Trade and Industry Minister, Rob Davies.

Due process was not followed in a number of consent and compliance notices issued by Mohlala and the National Consumer Tribunal found the commission to have acted ultra vires.

Mohamed gave an honest assessment of the commission's past weaknesses. The plan for the NCC developed by Mohlala did not take into account the fact that the body was a public entity still in its infancy and had very limited resources.

Under Mohlala's leadership the NCC emphasised the resolution of complaints - primarily centred on the conciliation of disputes between business and consumers - while corporate governance and due processes necessary for the operation of an efficient public entity was lacking.

"In many instances where business was found to have acted unfairly, consent orders and compliance notices were issued. In issuing such orders and notices due process was not followed. However many businesses settled in favour of consumers as it was not cost effective to oppose the orders and notices. Certain businesses, however, successfully contested compliance notices. This resulted in adverse publicity for the NCC and in hugely inflated legal bills‚" Mohamed said.

Source: Business Day via I-Net Bridge