An agreement was reached on Tuesday with the trade and industry department's consumer affairs division to halt unfair business practices.
The direct marketing group and vacuum manufacturer Kirby were taken to task this week by the consumer affair's division following investigations into a number of consumer complaints.
In terms of agreements signed with Trade and Industry Minister Mandisi Mpahlwa, the two companies are required to satisfy a number of requirements or face prosecution. This includes a R200000 fine or prosecution of senior company officials.
Homemark — which sells everything from blow-up beds, pain relievers and diet solutions to gym equipment — has come under fire for, among others, an SMS campaign which informs people they are winners of a competition they did not enter.
When claiming their prizes, the “winners” were told they had to be credit card holders to qualify. They were then asked for credit card details to pay R99 for packing and posting.
One complainant, who was contacted in May last year and told they had won a fitness system, said they later got notification from their bank that Homemark had deducted R498 from their credit card. When they queried the matter, they were told they had also ordered a tool kit. As of February 22, the consumer was still waiting to be reimbursed.
In terms of an agreement with government, Homemark must:
• ensure that sales operators inform consumers of all payment means , not just credit cards;
• inform consumers in advance that giveaways or free goods exclude shipping and handling charges; and
• ensure that sales operators are trained according to company policy and procedure and discipline sales operators who act unethically.
Kirby's case involved a lack of spare parts and consumerables from locally authorised Kirby distributors for the R17000 imported vacuum cleaning units.
Consumer affairs division representative Aubrey Mathope said they had established that some suppliers were unable to supply parts because they purchased fewer than 30 vacuum cleaners a month.
The consumer affairs division advised the department on regulations protecting consumers against misleading “grey imports” and intervened in the dispute between Shoprite and 8-Till-Late franchisees, obtaining an undertaking from Shoprite to give “reasonable guidance and support” for future franchises.
Many said they were used as Shoprite's guinea pigs, absorbing the risk of starting the shop before the company muscled in and simply bought them out.
Source: Business Day
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