The Consumer Protection Act … “I’ll see you in court!”

South Africans, if you want to avoid hearing those words – read the Consumer Protection Act (CPA) that came into force on 1 April.  It has far reaching implications both for consumers and businesses. It applies to every transaction, promotion or supply of any goods and services in the Republic of South Africa.

Buy the May 2011 Entrepreneur Magazine, and start at page 84.  Here’s a high level overview of what they have to say:

Did you know you have to apply the CPA to social networks?  Facebook, Linked, Twitter, Youtube, and any online forums all have to clearly state who is managing that account.  No more anonymous company names; you open yourself to a lawsuit if you do that. Every account has to have a real, contactable person behind it explaining their qualifications or authority.  Kinda tricky for companies that have hired PR companies to run their Twitter and Facebook campaigns.

If consumers follow any of the advice you post on any social network, and they get harmed from that advice in any way, you and the social network can be sued.  If you recommend a product to a consumer, CPA applies.

Permission-based marketing is out! Nothing is permission-based unless explicitly received in writing.

Terms and conditions in accordance with the Act need to be everywhere and simple language that everyone can understand. Instructions for unsubscribing from any of your social platforms needs to be clearly visible in the terms and conditions on every website you have.

Don’t even think of sending unsolicited emails anymore, especially via Facebook and LinkedIn.

And sharing your database or any of your community’s private information – up to 10 years in jail!  Contravene any other section of the Act and it’s 10% of your annual turnover for the preceding year or R1million.

All that fine print the companies so like to gloss over now have to be brought to the attention of the customer and explained.  All the companies reported to Hello Peter  need to start paying attention, the CPA has changed the landscape for them considerably.

The Trouble Avoidance Guide (by Entrepreneur Magazine)

  • Understand what the Act is about.
  • Know which provisions apply to your business operations.
  • Do a compliance audit of your performance in the ‘red flag’ areas, paying special attention to contracts, warnings, labeling, pricing, product quality, honesty in marketing and conduct and record keeping.
  • Make sure your staff members know what is expected of them and the consequences to the business of them getting it wrong.
  • Amend all your policies to include the changes to the law.
  • Develop a policy to deal with cancelled reservations.
  • Develop a policy to deal with customer complaints.
  • Have in place a policy for dealing with difficult customers.
  • Make sure you have adequate public liability cover.
  • Let the public know that you comply with the requirements of the Act.

Print the CPA from the Department of Trade and Industry, it’s in 3 parts.  I find it interesting that the Act does not apply to goods or services supplied to the state, and all regulatory authorities have been exempted from the Act.

While it’s great news for consumers because we can be protected from those annoying unsolicited emails and sms’s, and misleading advertising – it’s a precarious position for all companies.  Marketing and database companies need to be very wary here.  On the plus side, it will help clean up all industries with questionable ethics.

I just hope it doesn’t turn us into a society run by law suits like it is in the United States.

To report any contraventions of the CPA, visit the National Consumer Tribunal.

Lets Collaborate complies with the Consumer Protection Act.

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