Laying down lay-by law

29 February 2016 - 02:31 By Wendy Knowler

If you sign a contract that includes a clause which is not compliant with the Consumer Protection Act, does that mean that you forfeit that protection?That's clearly what tombstone manufacturer Willem Smith was getting at when I pointed out that refusing to refund money paid in a lay-by deal when the consumer cancelled was illegal."We do understand that the Consumer Protection Act states that a consumer can cancel a lay-by at any time and must be refunded payments," he said, "but when a contract signed by the consumer states clearly in bold letters that we have a non-refund contract agreement and the customer signed it, then how will that work?"Well, it doesn't work at all, of course. Companies can't contract out of the law and then rely on consumers not to know any better and sign their acceptance.Prohibited clauses, such as "no refunds" on a lay-by deal, cannot be binding.The case in question was one of two I dealt with in the past week concerning lay-by deals.What's a lay-by? For those who don't qualify for any form of credit, a lay-by is the only way to acquire something they can't afford to pay cash for upfront in one go.The system allows a consumer to choose an item - usually clothing - and pay it off every month, with no interest added. The key difference between buying on credit and via lay-by is that with the latter, the goods remain the property of the store until the client pays in full.In mid-October, Tshidi Ramutloa went to buy a tombstone from Smith Granite of Parys, Free State, paying R3000 on that day and another R4000 the following month, believing it to be paid in full.She told In Your Corner, via her daughter, that the company wasn't able to source the specific stone she had ordered and had not refunded her when she requested this.Responding, Smith produced a contract revealing the full price to be R7750, meaning Ramutloa still owed R750 and that the tombstone would be erected as agreed only when the balance was paid.Ramutloa said she was never given a copy of the contract, but in any event, she no longer wished to continue with the deal and wanted her money back.It was Smith who used the word lay-by to describe the deal, so I pointed out that the Consumer Protection Act states that a consumer can cancel a lay-by at any time and must be refunded all payments minus just 1% of the retail price as a cancellation penalty. In this case, Ramutloa was entitled to a refund of R7000 minus just R70 as a cancellation fee. But Smith undertook to refund the full amount, despite the no refunds clause in his contract.In another case, Jameel Sayid of Durban put a lay-by on a R1300 pair of Adidas shoes in Side Step in Durban's West Street earlier this month, handing over R800 as his initial payment, the verbal agreement being that he'd settle the balance within three months.But when he later changed his mind and told the store he wanted to cancel for a refund, he was told that "can't happen"."They said I either have to pay the money in full and then choose something else, or forfeit the money."When I took up the case, a store manager said there must have been a misunderstanding and Sayid was refunded his R800 in full.I have no doubt there are many, many others being denied their rights and forced to forfeit their lay-by payments illegally.WHAT TO DOIf you're buying something on lay-by, make sure that the deal is properly documented, including the payment period and the terms and conditions.If you cancel for a refund, ensure that you are liable to pay only 1% - of all payments made up to that point of the purchase price - as a cancellation penalty.CONTACT WENDY:Email: consumer@knowler.co.zaTwitter: @wendyknowlerRinging offIf you have a cellphone contract with Altech Autopage, it may come as a surprise that Altron is selling its Altech Autopage business. It has put information on its website, www.autopage.co.za/closure-autopageIn short, the contract terms and conditions remain the same, but payment will need to be made to a different (yet to be revealed) service provider or the network directly.Autopage subscribers can e-mail their queries to: questions@autopage.altech.co.za..

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