Consumer Protection Bill's impact on marketing

In April 2008, the third draft of the Consumer Protection Bill was released for comment. There are many implications for consumers' rights when dealing with companies, and the bill applies to many different types of businesses and transactions.

No longer a ‘nice-to-have'

The Consumer Protection Bill makes plain language an obligation and not a nice-to-have. According to Candice Burt, a plain-language attorney at Simplified, “Plain language will become a fundamental right - in other words, documents must be in plain language, regardless of whether the customer has stated that they understand the content or not. The plain language obligation cannot be contracted out of.”

For example, the bill says that all agreements for consumers must be in plain language and set out an itemised breakdown of the consumer's financial obligations (section 50).

Any notice about limiting a company's liability or indemnifying a company ‘must be drawn to the attention of the consumer' and be in plain language (section 49). Plain language is also a requirement for franchise agreements (section 7).

The Bill gives plain language a broad definition, which makes it clear that plain language is about many elements, including relevance, content, style and design. “It is not just about using clear words and sentences - it's about the document being understood by its intended reader,” says Frances Gordon, who in 2005 founded Simplified together with Candice Burt.

Lengthy definition

Unfortunately, the definition is a lengthy one:

A notice, document or visual representation is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or visual representation is intended, with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance, and import of the notice, document or visual representation without undue effort, having regard to—

(a) the context, comprehensiveness and consistency of the notice, document or visual representation;

(b) the organisation, form and style of the notice, document or visual representation;

(c) the vocabulary, usage and sentence structure of the notice, document or visual representation; and

(d) the use of any illustrations, examples, headings, or other aids to reading and understanding.

At 130 words, this sentence certainly is not in plain language!

Note that the definition speaks about the ‘ordinary consumer' with ‘minimal experience as a consumer of the relevant goods or services ‘ - no more targeting the average level of experience!

Benefit consumers

Some companies have been guilty of using vague clauses to give them wiggle-room in case there is a dispute after an agreement is signed. The Consumer Protection Bill aims to end this practice. According to the bill, the courts must interpret documents and contracts and forms to the benefit of the consumer.

The bill includes information about discriminatory marketing, which is important to any marketer who targets particular groups for particular products or services.

According to Gordon, “Marketers need to debate how to interpret section 8, which details what is and is not allowed in discriminatory marketing (for example, marketers are still allowed to target minors and people over a certain age). There are also implications for other types of marketing (for example, bait marketing) and for competitions and promotions.”

Gordon adds that the bill has implications for marketing and advertising. Advertising must not be false or misleading. It must not ‘directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact' (section 41).

What's more, it must not ‘use exaggeration, innuendo or ambiguity as to a material fact'.

Frowned upon

Leaving out important information is also frowned upon. The bill says that advertising cannot ‘fail to disclose a material fact if that failure amounts to a deception.'

Lastly, the bill takes into account any incorrect assumptions a consumer may already hold, and puts the onus on advertisers to set them right. Advertisers must not “fail to correct an apparent misapprehension on the part of a consumer or prospective consumer, amounting to a false, misleading or deceptive representation...” (Section 41)

With a few exceptions, the Consumer Protection Bill applies to all consumer documents that fall under a ‘threshold' for the transaction - this threshold is yet to be set by the Minister of Trade and Industry. The final date for submissions with feedback is 30 May 2008.