The 1st of April 2011 saw the introduction of the Consumer Protection Act (CPA). This piece of legislation has been highly publicised with a significant drive being initiated by the Department of Trade and Industry, as well as the media, to ensuring consumers are educated in their rights. However, even with all the public interest in the CPA there has been a degree of uncertainty in many of the practical implications of the Act. Many people hoped that the Regulations would clarify these issues.
The draft regulations were published on 29 November 2010 for public comment, with comments being accepted from date of publication to 31 January 2011. The final Consumer Protection Regulations were signed in on 31 March 2011 by the Minister of Trade and Industry, Mr. Rob Davies and were published on 1 April 2011.
Although the level of certainty provided by these Regulations is currently being debated, it is worth having a quick look at some of the straight forward practical implications of the Regulations:
1. Mechanisms to block direct marketing communications: Direct marketers must assume a comprehensive pre-emptive block has been registered by the consumer with the administrator, unless the administrator has confirmed in writing otherwise. Every direct marketer must register with the administrator and must annually confirm in writing their details.
2. Maximum duration for fixed-term consumer agreements: The maximum period for a fixed-term consumer agreement is 24 months from date of signature by the consumer; unless differently provided: in a regulation, which provides specifications for an industry, sector, type of agreement; or expressly agreed to with the consumer and has a demonstrable financial benefit to the consumer; or in an industry code.
3. Promotional Competitions: A reasonable cost of electronically transmitting an entry shall not exceed R1.50, this includes the total cost for all subsequent electronic communication to the consumer regarding that entry.
4. Prohibited times for contacting consumers: Prohibited times include: Sundays or public holidays; Saturdays before 09h00 and after 13h00; and all other days between the hours of 20h00 and 08h00 the following day. Direct marketing may not be timed to be delivered to the consumer during the prohibited times, unless expressly agreed by the consumer. The direct marketer is not in breach if they send out the marketing during the allowed periods, even if the consumer receives the marketing during the prohibited times; the onus to prove the marketing was dispatched in the allowed period rests on the direct marketer.
5. Exemption for certain categories of goods or services, or circumstances of trade from providing sales record: A supplier is exempted from providing a sales record, where the consumer expressly doesn’t require a sales record. A person trading as a hawker is exempted from providing a consumer with a written record of each transaction.
QUICK NOTE:
In brief, straightforward languages, the final Consumer Protection Regulations have defined certain important obligations for suppliers, specifically:
- Direct marketer’s cannot send such material to the consumer unless they have confirmed (and received that confirmation in writing) that no pre-emptive block in fact has been registered;
- The default maximum period for a fixed-term contract is 24 months (unless otherwise provided);
- Premium rated sms’ and mms’ for entry into a promotion competition are limited to a tariff of R1.50;
- Prohibited times for contacting consumers is: Sundays or public holidays; Saturdays before 09h00 and after 13h00; and all other days between the hours of 20h00 and 08h00 the following day;
- You will be required to keep sales records unless exempt by the Act.
Clients (Suppliers) are urged to:
- Compile a CPA Manual for their Website identifying how their organisation deals with CPA matters and a contact person for queries on how the CPA impacts their consumers;
- Review in particular their direct marketing practices to ensure their practices are in line with the prescriptions of the regulations;
- Ensure that they have registered with the administrator, and adhere to the requirements associated with pre-emptive blocks;
- Review their fixed-term contracts and ensure they do not exceed 24 months if they do not fall into the allowed circumstances;
- Do not charge more than R1.50 as an entry fee in terms of sms’ and mms’ for promotional competitions;
- Ensure staff have been advised not to contact consumers for marketing purposes during the prohibited times; and
- Review records management processes to ensure that sales records are maintained as required and admissible as evidence unless exempt from the duty to produce such records.
For more information regarding the above topic, please contact Katherine Thompson, Chetty Law: