How consumer complaints changed during lockdown, according to the Consumer Goods and Services Ombudsman’s (CGSO’s) annual report, is a real eye-opener about consumer behaviour.
Complaints more than doubled and complaints about online transactions increased from 6% in the previous year to 27% for the 2020-2021 financial year.
During this time, the CGSO’s intervention saw a total of R7,746,375.69 paid out to consumers in refunds, ranging from small amounts to more substantial sums, such as a partial refund of R202,886.75 from a timeshare company and R187,952.00 to a beauty salon owner who invested in a hair removal laser machine that was not fit for purpose.
Other refunds included cancelled flights, goods not fit for purpose, defective goods and cancellation of orders due to late deliveries and stock shortages, as well as cancellation of fixed-term agreements and advanced bookings for events that could no longer take place due to Covid-19 restrictions.
More consumer complaints linked to lockdown
According to the annual report, complaints increased by 52%, from 9,529 to 14,438 cases, the highest number ever.
“We attribute this steep rise to a combination of factors, including increased consumer awareness of the CGSO, issues over cancellations and failure to deliver due to the Covid-19 pandemic and problems associated with the unprecedented demand for online shopping,” Magauta Mphahlele, the ombudsman, said.
Mphahlele says as soon as lockdown started, consumers began to flood her office with requests for assistance on situations that the Consumer Protection Act (CPA) was never designed to deal with and for which limited legal precedent existed.
“These issues fell into two broad categories: cancellations of advanced bookings and services due to lockdown and price hiking in response to increased demand and supply chain disruptions. Shortly after that, the nature of complaints began to reflect the challenges that came with the surge in demand for online goods and services.”
A total of 790 (5.4%) complaints received directly related to Covid-19 and 2,321 (16%) to online transactions. The top three lockdown-related disputes involved travel services (32%), weddings (16%) and accommodation (13%) as people rushed to cancel or postpone holidays and big events.
“Other notable complaints involved gym memberships where consumers objected to paying monthly fees for services and facilities that were temporarily closed and retailers that refused to refund customers for items bought in-store, despite fitting rooms being closed.”
The ombudsman’s office also referred 29 companies to the National Consumer Commission (NCC) and the Competition Commission for further investigation into price gouging.
Consumer complaints per sector were about goods (38%), services (28%), agreements (24%), disclosure (3%), deposits (2%), treatment (2%), health and safety (2%) and marketing (1%).
Mphahlele said e-commerce accounted for the most significant number of complaints per sector, while most complaints in the previous year were about the satellite and telecommunications sector, reflecting the dramatic shift to online shopping in the wake of lockdown.
Online transactions made up 27% of the complaints, appliances 15%, furniture 13%, satellite and telecommunication services 13%, clothing 7%, travel services 6%, groceries 6%, fitness 5%, accommodation 4%, timeshare 2% and weddings 2%.
Products and services
Complaints by product or service showed that lockdown generated an unprecedented number of complaints around travel services, accommodation and weddings, which made up 12% of the complaints received.
“The dramatic rise in the number of consumer complaints around online shopping reflects the shift in consumer behaviour in the last 12 months. The most common complaints related to service and delivery about goods not delivered on time (45%), goods and services not meeting expectations and services not provided in time,” said Mphahlele.
Complaints by product or service had 17% of complaints related to online transactions, 10% about cell phones, 10% about electrical appliances, 8% about furniture and 8% about telecommunication and satellite services.
The office of the ombudsman resolved 43% of the complaints received fully in favour of the consumer, 16% were resolved by the supplier, 15% were resolved in favour of the supplier, 13% were dismissed due to lack of cooperation from the supplier, 7% were resolved with assistance provided, 3% were dismissed and referred to the NCC and 3% was resolved partially.