1Time winding up leaves consumers high and dry?

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The news of the winding up of 1Time airline has led to an investigation by the NCC into whether consumers will be refunded for their useless tickets (see 'Consumer watchdog mulls 1time probe' on fin24). It is unclear what 1time will do regarding tickets sold shortly before it liquidation, but it seems that at least consumers who paid cash will be left out in the cold (those who paid by credit card will be refunded it seems).

What relief can the NCC demand in terms of the CPA on behalf of the consumer? Well, it seems that the NCC will argue that consumers were misled by 1time because 1time took their money despite knowing that it was about to apply for liquidation. Good luck with that. Even if the NCC can prove that consumers will still be ordinary creditors and will have to wait long for a partial refund. Another argument could be that section 63 or sections 64 and 65 apply to the situation (at least in respect of some of the consumers). These sections regulate advance payments for services and provide that the money paid for those services will remain the property of the consumer.

I will discuss consumers' rights when suppliers close down in full in the November edition of the Consumer Law Review. If you have not already subscribed you can do by registering at www.jutalaw.co.za.