Report 76 Business Practices Committee10. Conclusion |
This report was first published under Notice 2723 in Government Gazette 19455 dated 13 November 1998. The Minster invited interested parties to make written representations regarding the report. All comments received were positive, with one exception. The only negative "legal commentary" received was to the effect that:
| a) | "it does not appear that enquiry was made of affected customers about whether they were harmed by the practices dealt with in the report." |
| b) | "it is not clear that the definition in the Act of a "commodity" includes money, a right to claim money, or the right to recruit new participants to the schemes", and |
| c) | "The report does not clearly find that the customers of these schemes were unreasonably prejudiced, or deceived". |
The Committee:
| a) | did receive comments from affected customers, |
| b) | believes that the definition in the Act of a "commodity" includes money and that "... a right to claim money, or the right to recruit new participants to the schemes" are business practices as defined in the Act and |
| c) | is of the opinion that the report clearly found that the participants of the schemes identified in the report were unreasonably prejudiced, or deceived. |
On 8 March 1999 the Committee invited representatives of various bodies to attend a meeting to discuss the report that was published under Notice 2723 of 1998. The meeting was well attended by representatives of inter alia leading auditing firms, the State Attorney, the South African Polices Services, the Investigation Directorate for Serious Economic Offences, the Direct Selling Association and non-governmental organisations, such as the Consumer Institute of South Africa, the South African National Consumer Union and the National Consumer Forum. Those present enthusiastically supported the report and suggested minor amendments to the proposed prohibitions by the Minister. There were two dissenting opinions. The report was vehemently attacked by the representative of a pyramid promotional scheme that was being investigated by the Committee in terms of section 8(1)(a) of the Act and less so by the representative of the body that submitted the legal commentary referred to above. This representative also suggested positive amendments to the then proposed prohibition by the Minister.
The Cabinet's approval to conduct this section 8(1)(b) investigation into money revolving schemes shows that the Government considers these schemes in a serious light Thousands of South African consumers have lost large sums of money by participating in these schemes. The Committee is aware that many participants indebted themselves, many who are amongst the poor, have incurred debt in order to become members of these schemes. These schemes are clearly not in the public interest