Compliance to the ECT Act
A recent survey done by Buys Inc, a leading South African IT law firm, shows that a “horrific” figure of 80% of South African web sites listed on the “Proudly South African” website do not comply to the ECT Act (Electronic Communications and Transactions Act number 25 of 2002). This raises the questions: what does compliance to the ECT Act actually mean? And, secondly, what implications are there for a website that does comply with the Act?
What does compliance mean? In essence, the answer is simple: the act gives e-commerce consumers additional consumer protection than that found in the “real world”. This is in order to overcome some of the inherent problems associated with the nature of e-commerce. It was felt by the legislature that consumers need more protection under such circumstances (i.e., transactions that occur at a distance by means of the World Wide Web) than they would in the “real world”. The ECT Act tries to correct the problems that may arise when shopping on the World Wide Web. One of the biggest dangers in shopping like this is the anonymity of the other party. So the ECT Act requires all companies or businesses offering goods or services for sale on the Internet to include certain information on their websites. If such information is not shown on their websites they are in fact “failing to comply” with the ECT Act. In essence this information would be their full company details and other information which would be essential in order to conclude a contract that was easily understood by both parties. So, for a company to “comply to the ECT act,” it must make sure that, firstly, all the information as outlined in chapter 7 of the ECT Act appears on its web site. Secondly, the company must ensure that its terms and conditions on the web site do not contradict the customer protection provisions that the ECT Act offers.
What would be the result for unprincipled websites not complying with the above? The answer is, again, quite simple: there are no punishments, fines, criminal sanctions or cyber inspectors knocking at their doors! All the Act does is give consumers additional rights against websites that do not comply. This is done by giving consumers an additional time period to return any goods or cancel any services ordered, should the site not comply to the provisions of the act. It must be noted that the rights given under the ECT act cannot be contracted away. So if the terms on the website contradict the protection offered by the ECT act, the latter will be applicable and the consumers rights will be protected. The ECT Act also offers limited protection to the seller of goods or services, with failure to comply with Act negating any such protection.
The Buys Inc survey also states that many respondents had knowledge of the ECT Act but “failed to comply” due to “prohibitive costs.” But it is not particularly difficult to read the provisions as outlined in chapter 7 of the ECT Act and then make sure that all the required information is present on the website offering the goods or services. Nor does it take too much effort to ensure that the terms and conditions, privacy policy, and other documentation found on the web site do not contradict the consumer protection offered by the ECT Act. In the final count, each business will have to decide whether the cost of ensuring compliance to the Act is worth the expense. But, when making such a decision, they should consider whether failure to comply is equal to giving away consumer rights - as well as some of their their own protection.
Finally, it must be borne in mind that South African law can only apply to South Africans transacting with South African websites. Consumer protection cannot extend to South Africans purchasing, for example, strange objects from a website in Uzbekistan or anywhere else in the world. The sensible and cautious consumer will always shop from South African websites. Which is great, because to buy South African is a good thing!
The Electronic Law Consultancy offers the expertise of trained and certified lawyers who specialise only in electronic law, backed by practical and technical experience. This provides pro-active legal advice that is clear and understandable and also protects and enhances the efficiency of business communications. By utilising a business model and small business experience we are able to maintain fees at levels well below the industry norm.
03 Nov 2004
This article is intended to provide general guidance and does not constitute professional advice relating to specific instances. Should you wish to place any reliance on the information presented in this article we strongly advise that you consult your legal advisor or the Electronic Law Consultancy - info@e-lawconsultancy.co.za
