Business Legislation

Question 1

What are the consumer rights according to the Consumer Protection Act?

Answer 1

Consumers have the right to:
- choose goods and suppliers.
- shop around for the best prices.
- return goods that are defective for a full refund.
- reject goods that are not same as the marketed sample.
- cancel/renew fixed term contracts.
- request written quotations and cost estimates.

Question 2

What is the purpose of the National Credit Act (NCA)?

Answer 2

• It promotes a fair and competitive credit market.
• It promotes responsible granting of credit by credit providers.
• It ensures credit availability to all consumers equally.
• It protects consumers from unfair business practices where credit is involved.
• It ensures that credit providers are registered to avoid consumer exploitation.

Question 3

What is the impact of the NCA on businesses?

Answer 3

On the positive/advantage side:
- it protects business against non-paying customers.
- it stamps out reckless lending.
- The business only grants credit to qualifying customers.
- It leads to more customers through credit sales.
- It lowers bad debts.
On the negative/disadvantages side:
- it increases the administration burden.
- requires more working capital.
- fewer customers buy on credit.

Question 4

How can businesses comply with the NCA?

Answer 4

-Credit providers must be registered with the national Credit Regulator.
- Annual compliance report must be submitted to the National Credit Regulator.
- The business has to conduct affordability assessment on consumers.
- Should conduct a credit check with a registered credit bureau.