Direct Marketing vs the Consumer Protection Act and POPI Act (part 2)

Last week we dealt with the definition of direct marketing and whether a consumer can restrict a supplier from communicating directly with him/her.

Direct Marketing vs CPA and POPI

This week we will look at how consumers can exercise their rights pre-emptively and when a supplier can communicate directly with a consumer, as well as the consequences should a supplier fail to comply with the provisions of the CPA.

How can consumers exercise their rights pre-emptively?

The CPA provides that the National Consumer Commission (NCC) may establish a registry with which a consumer may register a pre-emptive block, either generally or against specific suppliers, for any direct marketing communication. The NCC is still in the process of developing the Opt-Out Registry. Once the Opt-Out Registry is implemented, all suppliers will be required to run their databases against the Opt-Out Registry before engaging in any direct marketing activity with a consumer.

In the interim, the Direct Marketing Association of South Africa (DMASA) has jumped at the opportunity to self-regulate. DMASA aims to protect both the industry and consumers from unethical or ignorant suppliers. DMASA also ensures the protection of consumers through a national opt-out register where users can indicate their intention not to receive direct marketing communications. These details are provided on a monthly basis to paid-up DMASA members who are then prohibited from contacting consumers who had selected not to be contacted by direct marketers.

Notably, POPI introduced an opt-in system, as opposed to the opt-out system introduced by the CPA, in terms of which a supplier may not conduct direct marketing unless it has obtained prior consent from the consumer. In addition, a supplier may only contact a new consumer once in order to obtain said consent.

Moreover, POPI provides that a supplier does not need an existing consumer’s consent if–

  • the supplier had obtained the consumer’s contact details during a transaction;
  • the consumer’s contact details are used for the purpose of marketing similar products or services to the consumer;
  • the consumer was given a reasonable opportunity to demand that the supplier desist from sending the consumer direct marketing communications, free of charge, which must not be too cumbersome; and
  • the consumer had been afforded the opportunity to opt out or unsubscribe every time after receiving marketing material from the supplier following an opt-in.

Opt-out vs opt-in

The Opt-In approach is the inverse of the Opt-Out system. It requires a consumer to expressly consent to receiving communication before the consumer’s personal information may be used for direct marketing purposes.

Commonly consumers are more averse to opting in than they are to opting out. It is suggested that the adoption of an opt-in system, as introduced by POPI, would drastically impact direct marketers and ensure better protection of a consumer’s privacy.

When is a supplier allowed to communicate directly with a consumer?

The CPA sets out specific times that consumers may not be contacted for purposes of direct marketing. Accordingly, a supplier may not engage in any direct marketing with a consumer–

  • at the consumer’s home on Sundays or public holidays;
  • on Saturdays before 09h00 and after 13h00; and
  • on Mondays to Fridays before 08h00 and after 20h00.

A supplier is therefore only allowed to communicate with a consumer for purposes of direct marketing–

  • from Mondays to Fridays between 08h00 and 20h00;
  • on Saturdays between 09h00 and 13h00; and
  • when the consumer has expressly requested or agreed to a different time.

Consequently, the supplier will not be in breach of the CPA if the supplier had dispatched direct marketing communications during the aforementioned permitted periods, despite the consumer receiving the communication outside the permitted periods. However, the burden will rest upon the supplier to prove that the direct marketing communication had been dispatched during the permitted periods.

Consequences for a supplier when failing to comply with the provisions of the CPA

If a supplier fails to comply with the provisions of the CPA in respect of direct marketing, the consumer may lodge a complaint directly with the supplier, or lodge a complaint with an industry ombudsman (if available) or alternatively with the NCC.

Conclusion

The CPA holds implications for telesales, as well as other sales and marketing methods, where the consumer is approached or targeted directly for marketing.

Despite the provisions of the CPA being clear on how consumers may be approached for direct marketing, the enforceability thereof is questionable. Apart from a costly and time-consuming application for a court interdict to prohibit a supplier from communicating with a consumer, or pressing criminal charges for harassment and checking up with the South African Police Service to ensure that the charges are being investigated, only a direct challenge to the NCC will result in an answer.

With the introduction of the Opt-Out Registry in the foreseeable future, one can in the interim rely on the protection afforded by DMASA, albeit restricted because only paid-up suppliers are informed of the consumers who had exercised their pre-emptive right to opt out.

Suppliers should therefore adopt a vigilant and conservative approach in relation to obtaining a consumer’s permission to use their details for marketing purposes, especially for electronic communication, in light of the provisions of POPI. Suppliers should further proactively monitor and enforce demands from consumers to desist from communicating further with them for purposes of direct marketing.

SERR Synergy assist businesses and organisations to be compliant as per the provisions of the CPA and to fully comply with procedures as required by POPI by setting up an Information Security Management System (ISMS).

About the Author: Montenique Hayward is a BCom (Law) [2011], LLB [2013] and LLM [2017] graduate from the University of Pretoria. During her LLM studies, she specialised in Consumer Protection and was, subsequently, awarded the JUTA award for the highest mark obtained at the end of her LLM. She was also admitted as an attorney of the High Court in 2015 and practiced as such before joining our team in 2017 as a Corporate Legal Advisor.