How your students can take you on legally
So you’ve got some pretty good courses on offer, and you’ve invested a lot of time and effort in getting your accreditation and registration
You spent quite a bit on marketing and advertising and your institution has a good name out there. Your premises and facilities are great and you pay quality staff a good salary
Your courses are fairly expensive, but students really get their money’s worth. Their fees are expected to cover your costs, and a little profit, for the duration of the course
So, when a student tells you that he is cancelling his contract only one month into the course, and that the Consumer Protection Act says he may legally do so, and that he wants his money back too, you are shocked
You know that the CPA is there to protect consumers from unscrupulous businesses, but it wouldn’t unfairly prejudice your business in favour of a student who has ‘lost interest’ in the course, would it?
You appeal to the National Consumer Commission (NCC). They reply that the Consumer Protection Act does indeed allow consumers to “terminate contracts prematurely by giving the supplier a 20 days’ notice in writing. The act allows suppliers to charge a reasonable percentage as penalty.”
Is that so: A contract is not binding because the student can just cancel it? That’s not fair.
Your attorney explains that, in terms of the Act, your students are consumers and your courses are services and that in section 14(2)(b) it says that:
“(2) If a consumer agreement is for a fixed term -
b) despite any provision of the consumer agreement to the contrary -
(i) the consumer may cancel that agreement-
(aa) upon the expiry of its fixed term, without penalty or charge, but subject to subsection (3)(a); or
(bb) at any other time, by giving the supplier 20 business days' notice in writing or other recorded manner and form, subject to subsection (3)(a) and (b)
(ii) the supplier may cancel the agreement 20 business days after giving written notice to the consumer of a material failure by the consumer to comply with the agreement, unless the consumer has rectified the failure within that time.”
It is little comfort to you to know that:
1) May impose a reasonable cancellation penalty with respect to any goods supplied, services provided, or discounts granted, to the consumer in contemplation of the agreement enduring for it’s intended fixed term, if any; and
2) Must credit the consumer with any amount that remains the property of the consumer as of the date of cancellation”
The best you can do is to reword your contract to define the “reasonable cancellation penalty”.
Compiled by: Rick Edmonds for APPETD
APPETD Board member and Higher Education Committee Chairperson
Wow!! This is scary stuff. Imagine how the costs of insurance provision for all providers may skyrocket as they seek protection potentially? This great Consumer Protection Act may just come and bite us.
Hi Gill, yes this interpretation does appear to have significant implications, not only for training service providers but also I think for Seta project funding and reporting - and what about FET colleges, and universities. There are high drop out rates already, so when budgeting they'll have to predict their drop out and repayments percentage.
Ive actually studied this act quite a bit, and I enjoy the smooth way in which it gives rights to consumers, the rights they actually always had but did not really have a commission specifically paid for by the government to handle claims.
The consumer in my opinion did not gain more rights - rather he gained representation in the form of the Consumer Protection Commission, based in Sunnyside, Pretoria, the DTI building where lawyers are empliyed on state funding to assess the cases.
Now, as we all know, the law is not in the business of causing losses neither in the business of causing profits. The law aims only to restore any sufferer financially to the position he was in before the event occured. Those sufferings caused which can not be restored phisically such as disability, can only be claimed fincancially as there is no possible way to restore a man's health. That brings me to the second most important point - the law can not expect the impossible. Neither of the supplier or the customer.
So then if it is impossible for the supplier to restore his money immediately, then it is impossible, and the supplier will not go to jail.
They will agree in some small claim court..
"Can you pay R500 per month."
"Yes, I can."
"Are you happy with that?"
"Yes I am."
"Then you are ordered to pay R500 per month until it is paid off." (as best you can)
Thats as simple as it is.
Remember that in small claims you dont even need a lawyer!
So it is defiantely prudent to not spend all the proceeds of sales from training - it is also not a big matter to worry about even if you did spend some of the money to cover other costs. As long as you can prove that you were not aware, or it was not premeditated, or intentional that you spent the money - in other words, "I didnt know he would return the product."
Miro, i have always heard legaleses say 'ignorance of the law is no excuse'. how do one get out of that?