South Africa

Details

  • Service: Tax, Corporate Law Advisory
  • Type: Regulatory update
  • Date: 2010/08/10

The Consumer Protection Act - Right to Privacy 

The Consumer Protection Act (CPA) is the first piece of comprehensive legislation in South Africa which consolidates existing consumer protection legislation and codifies aspects of the common law in a manner that provides South African consumers with extensive protection and redress. The CPA will co-exist with other consumer-protection legislation such as, for example, the National Credit Act and the Financial Advisory and Intermediary Services Act.

The CPA contains eight consumer rights, namely:

 

  • Right of equality in consumer market
  • Right to privacy
  • Right to choose
  • Right to disclosure and information
  • Right to fair and responsible marketing
  • Right to fair and honest dealing
  • Right to fair, just and reasonable terms and conditions
  • Right to fair value, good quality and safety.

 

Over the next few months leading up to the effective date of the CPA, ie 24 October 2010, we will highlight some of the practical issues that businesses are facing in ensuring compliance with the CPA by discussing aspects of the consumer rights mentioned above.

 

This article focuses on the consumer’s right to privacy.

 

Direct marketing

 

The provisions in the CPA regarding direct marketing fall within the ambit of the consumer’s right to privacy.

 

Various media (for example, sms, e-mail and telephone) are used by businesses to market their goods and/or services. In terms of the CPA, as part of the consumer’s right to privacy, this activity will be regulated in the sense that the consumer will have the right to restrict unwanted direct marketing, ie the marketing of goods or services that is conducted either in person or electronically. (Interestingly, canvassing for donations is also captured in the definition of direct marketing).

 

A consumer, who has been contacted by a supplier, for the purposes of direct marketing, can demand that the supplier no longer contact that consumer. In this regard, the National Consumer Commission can establish a registry or recognise a registry that enables consumers to register a pre-emptive block against direct marketing. This can be generally or for a specific purpose. Pre-emptive blocking is already in existence in South Africa. For example, the Direct Marketing Association of South Africa has an “Opt-Out Register” which allows consumers to remove their details from mailing lists used by direct marketers. Consumers may also not be charged a fee for registering a pre-emptive block or for requesting a supplier to desist from initiating any further communication.

 

If a supplier concludes a transaction with a consumer as a result of direct marketing, the consumer has a five day cooling-off period which generally entitles the consumer to cancel the agreement without penalty. The supplier must notify the consumer of this right upfront before conclusion of the transaction.

 

In addition to the above, a supplier is prohibited from contacting consumers for the purposes of direct marketing during specified periods unless the consumer has otherwise consented. Theses times have not been regulated as yet (the DMA timelines are currently 8:00 to 19:00 Mondays to Fridays, 9:00 to 12:00 on Saturdays and no marketing on Sundays and Public Holidays).

 

Practical implications

 

Practically, the direct marketing provisions mean that businesses may need to adjust their marketing strategies and ensure that adequate processes are put in place to give effect to the demands of consumers as legislated. In terms of the CPA, a person conducting any direct marketing must implement appropriate procedures for facilitating the receipt of demands by consumers to opt-out from direct marketing communications. Should the DMA register be accredited by the National Consumer Commission, direct marketers would have to compare their mailing lists to that of the Opt-Out Register maintained by the DMA and ensure that names of consumers that appear on the DMA register are deleted off their databases (to the extent that this process is not already being conducted).

 

Aspects that would require review:

 

  • IT processes will have to be reviewed to ensure that businesses make provision for implementing the demands of consumers.
  • Marketing strategies will have to be reviewed to ensure that the requirements relating to direct marketing are adhered to, for example, notifying the consumer that they have a five day cooling-off period.
  • Contracts with direct marketers may need to be reviewed and, where necessary, amended.
  • Training on the requirements of the CPA.

 

The CPA only deals with right to privacy in relation to direct marketing. However, please bear in mind that the Protection of Personal Information Bill deals with an individual’s right to privacy extensively and comprehensively.