Mamodupi Mohlala

The cost of consumer protection

SA consumers are now among the most protected in the world. The Financial Mail looks at the cost of protection, the turf wars and what it means for business…. The fiscal might of consumer power can be a formidable weapon to wield. This is why Mamodupi Mohlala (left), appointed SA’s new consumer tsar, looks to become one of the most influential and feared regulators in the country.

As head of the National Consumer Commission (NCC), created out of the Consumer Protection Act (CPA), Mohlala has the tough task of nailing business on consumer rights issues. With a starting budget of R32m, her unit of 32 staff will scrutinise and monitor the business practices of almost every personal and commercial transaction in SA, including government for poor municipal services.

But she knows that exercising her new powers means negotiating a minefield of vested interests that will inevitably lead to bruising battles with business and other regulators. On her target list in the next year are the telecommunications, pharmaceutical and health care , retail, manufacturing and banking sectors.

It is a battle the feisty Mohlala, a qualified lawyer and former communications director-general, is not relishing. But it’s one that will be hard fought if the new NCC is to make its mark and become the champion of SA consumers.

Business is shaken and worried. Together with the new Companies Act, in force from May 3, the CPA heralds the biggest reforms of SA’s business and corporate landscape in 40 years.

Though the CPA makes South Africans among the most protected consumers in the world, it will change the face of business in SA and how companies operate. It increases the cost burden of SA companies regardless of their size or nature of business. The cost of initial compliance with the CPA is conservatively estimated at around R1bn.

That’s just the beginning . Less than a month in operation, the NCC is already gearing up for a series of ugly turf wars, starting with telecoms regulator Icasa and the various financial services authorities. Taking on and winning a popular and high-profile case would dramatically boost the commission’s public profile and set the tone for its future work……

Financial Mail: Read more