Charging consumers for opting out of direct marketing

The Consumer Protection Act (CPA) 68 of 2008 is explicit in providing for the rights of consumers to restrict unwanted direct marketing and to exercising this right free of charge.

The rights set out under the CPA:

This falls under the consumer’s right to privacy, one of the eight fundamental consumer rights set out in chapter 2 of the act, titled Fundamental Consumer Rights.

The relevant provisions of the act are:

Section 11: Right to restrict unwanted direct marketing

11(1) The right of every person to privacy includes the right to:

  1. refuse to accept;
  2. require another person to discontinue;
  3. in the case of an approach other than in person, to pre-emptively block any approach or communication to that person – if the approach or communication is primarily for the purpose of direct marketing.

(2) To facilitate the realisation of each consumer’s right to privacy, and to enable 
consumers to efficiently protect themselves against the activities contemplated in subsection (1), a person who has been approached for the purpose of direct marketing may demand during or within a reasonable time after that person responsible initiating the communication desist from initiating any further communication
.

(3) The [National Consumer Commission] may establish or recognise as authoritative a registry in which any 
person may register a pre-emptive block, either generally or for specific purposes, 
against any communication that is primarily for the purpose of direct marketing.

(4) Any person authorising directing or conducting any direct marketing:

  1. must implement appropriate procedures to facilitate the receipt of demands contemplated in subsection (2); and
  2. must not direct or permit any person associated with that activity to direct or deliver any communication for the purpose of direct marketing to a person who has –
  3. made a demand contemplated in subsection (2); or
  4. registered a relevant pre-emptive block as contemplated in 
subsection (3)

(5) No person may charge a consumer a fee for making a demand in terms of subsection (2) or registering a pre-emptive block as contemplated in subsection (3).

Thus the consumer may:

  • refuse to accept any direct marketing communication;
  • request the direct marketer not to send any further communication;
  • assume that the direct marketer has procedures in place to process such demands and to ensure the person is not contacted again; and
  • not be charged for exercising such rights under subsections (2) and (3).

In realising their consumer rights, consumers may approach a court, or the National Consumer Commission (established by section 85 of the CPA) should their rights as set out in the act have been infringed. 
The regulations published in terms of the CPA provide that organisations should assume that consumers have registered a comprehensive pre-emptive block against their name and may thus not legally receive any direct marketing. This does not apply in cases where the consumer has provided specific written consent to receive direct marketing communications.

Regulation 4: mechanisms to block direct marketing communication

For purposes of section 11 (6) of the act, the following principles are required as a minimum for the operation of a registry contemplated in section 11 (3):

(g) Except in respect of those existing clients where the direct marketer has proof that the existing client has after the commencement of these regulations expressly consented to receiving direct marketing from the direct marketer, a direct marketer must assume that a comprehensive pre-emptive block has been registered by a consumer unless the administrator of the registry has in writing confirmed that a pre-emptive block has not been registered in respect of a particular name, identity number, fixed line telephone number, cellular telephone number, facsimile number, pager number, physical address, postal address, e-mail address, website uniform resource locator (URL), global positioning system co-ordinates, or other identifier which the operator of the registry makes provision for submitted by the direct marketer for purposes of sub-regulation (f).

National Do Not Contact registry not in place

The setting up of the registry has yet to take place. Such registry is anticipated to eliminate spam but without the national database in place, consumers’ remedies are difficult to implement. Consumers have in the interim been advised to register on the Direct Marketing Association of South Africa’s National Opt-out Database.

Industry practice

Direct marketers who charge a levy to customers who opt out or register a pre-emptive block are operating in contravention of the Act.

To avoid such contravention and to ensure the rights of consumers are respected, some experts have suggested that the best solution would be for networks to reverse-bill the bulk SMS service provider, which in turn would charge its clients for the opt-out SMS.

However, the Wireless Application Service Providers’ Association (Waspa) aims to prevent the service provider and the consumer from being punished and is looking to the national opt-out registry to provide a solution. Waspa’s code, in the absence of a uniform free solution across all networks, states that the rate of opting out should be the standard rate if it is not provided free of charge. Waspa’s code is binding upon all members.

The Code (version 14.0, effective 2015-06-29) provides for the right to restrict unwanted direct marketing:
 section 16.7 states that a member may not charge a consumer a fee for processing an opt- out request or for registering a pre-emptive block.

Waspa has, however, commented that “STOP” requests may only be charged at the standard SMS rate.

Consumers who have been charged for opting-out from direct marketing can report their mobile network provider to Waspa.

Waspa should be enforcing the provisions of the CPA on behalf of its members, in the interests of protecting consumers’ right to privacy.

MTN SA has stated that it runs a reverse-billing system while Cell C says its customers do not pay to opt out of direct marketing. Vodacom has stated that its opt-out mechanism relates to its own marketing messages.