The recently promulgated Consumer Protection Act (CPA) expects a commitment to transparent dealings with consumers. That was the key message delivered to an audience primarily comprised of the marketing fraternity at Friday's (22 July 2011) "E-mail/SMS marketing and the law" seminar.
Held at the Forum in Bryanston, Johannesburg, and hosted by specialist ICT law firm Chetty Law with speakers including Attorney Katherine Thompson how the new CPA makes South African consumers among the best protected in the world. It has significant implications for all businesses, including the use of digital media to market goods and services. "The new Act has direct implications for marketers," she said.
The seminar was sponsored by pMailer, a leading bulk Email and SMS marketing platform developed by Prefix Technologies. Josh Adler, CEO of Prefix Technologies, provided the audience with the e-marketer's perspective. "In the world of digital marketing, reports of the death of e-mail areas premature now as George W. Bush's Second Gulf War victory proclamation was several years ago. E-mail remains the standard way much of the business gets done and it's a very mature environment," he noted. "The key lesson is that nothing great ever dies, it evolves. New legislation like the CPA and later the Protection of Personal Information Bill will have an impact on that evolution," said Adler.
According to Thompson, the key message of the CPA is that marketers have to be transparent in their dealings with consumers. Most of its provisions, it could be argued, are designed to make it much easier for consumers to understand exactly what is being offered. Following that basic understanding they also need to understand what their rights are. However, the Act sometimes doesn't go as far as current practice. An example is refunds. Said Thompson, "Most retailers give full refunds with no questions asked, but the CPA actually has quite strict conditions that govern when a full refund is mandatory."
Businesses should see the CPA within the context of keeping their customers happy. Furthermore, companies have an onus to investigate and understand its obligations to consumers in terms of the Act, and take reasonable steps to comply.
Chetty Law's principal, Pria Chetty, argued that the CPA needs to be seen within the broader context of the total legal and regulatory framework. In the case of e-mail and SMS marketing, the Electronic Communications and Transactions (ECT) Act is hugely important. "This is a great piece of legislation that actually enables e-commerce in South Africa rather than frustrating it," said Chetty.
The ECT Act gives digital communications the same legal force as written documents. "The legislation is technology-neutral, so it covers all types of digital technology," said Chetty.
One important corollary is that digital marketers need to practice strict version control of the terms and conditions of electronic marketing tools so that they can demonstrate which conditions pertain to specific offers.
Chetty noted that the ECT Act also contained consumer protection provisions, among them the need for proper disclosures by the vendor or marketer and a cooling off period of seven days for all electronic transactions. This is slightly longer than the five business days specified in the CPA for contracts initiated through direct marketing. The ECT Act also specifies that electronic payment channels must be 'sufficiently' secure. This implies that payment channels had to be secure in the context of available technologies and also appropriate to the industry. For example, a transactional banking site would be held to higher standards than one facilitating the purchase of items like CDs, for instance.
Spam is one of the hottest topics in e-marketing but South Africa does not have specific anti-spam legislation. "That's why we have to look at the total regulatory and legal framework," said Chetty. She pointed out that both the ECT Act and CPA make provision for opt-out direct marketing, which means that companies can market to people with whom their company has no customer relationship, provided the company meets the requirements under the various legislation.
Regarding future legislative changes, the forthcoming Protection of Personal Information Bill was set to change South Africa to an opt-in model, effectively limiting direct market practices. "In other words, the use of personal information will be reliant on the consent of the person concerned unless the person is a customer of the company," said Chetty.
Adler concluded, "The CPA is the next stage in the evolution of digital marketing. The ECT Act opened things up, now we're protecting the little guy. It's good for our industry because it guides us into best practices, and that will ultimately improve the return on investment in digital marketing."