NEW

Why South Africa’s draft revised material transfer agreement is not fit for purpose

Forcing a square into a circle: why South Africa’s draft revised material transfer agreement is not fit for purpose

PAIA manual

View the PAIA manual HERE 20230626_PAIA_Manual_Esselaar Attorneys_PGE

Paul Esselaar

Paul Esselaar completed his BA, LLB at Rhodes University in Grahamstown in 1997. Thereafter he attended the School for Legal Practice at the University of Cape Town in 2000 and went on to complete his articles at Kessler De Jager Inc. During his articles he focussed...

Web Site Terms and Conditions

The Esselaar Attorneys Web Site is subject to copyright by Esselaar Attorneys or is licenced under copyright from third party owners. You may reproduce any web page - subject to the disclaimer below - for personal use only. Any comments and statements contained within...

Email Disclaimer

This message and any accompanying attachment(s) may contain confidential and copyrighted information. If you are not the addressee(s) indicated in this message or responsible for delivery of the message to the addressee(s), do not copy or deliver this message or the...

Financial Services Laws General Amendment Bill tabled in Parliament

According to the South African Government News Agency (SANews) the Financial Services Laws General Amendment Bill was tabled in Parliament last week. In short, 'the Bill, which was released for public comment in March, addresses urgent issues in eleven financial...

Is the Financial Services Industry pulling wool over consumers’ eyes?

The Financial Services industry is in a state of flux. The Financial Services Laws General Amendment Bill (FSLGAB) was tabled in parliament on 25 September 2012. The aim of the Bill is to ensure that ‘South Africa has a sounder and better regulated financial services...

Credit Law: Section 89(5)(c) of the NCA declared unconstitutional

In the May/June edition of CLR Paul Esselaar wrote about a decision by the Western Cape High Court in which s 89(5)(c) of the National Credit Act was declared unconstitutional for being inconsistent with the right to property in s 25(1). In other words it was found...

Draft NCA Regulations on Affordability Assessments published

The Department of Trade and Industry has published draft regulations on, "Affordability Assessment for the Amendment of Regulations for matters relating to the functions of the National Consumer Tribunal and Rules for the Conduct of matters before the National...

Drowning in Red Tape: The new threshold for registration as a credit provider

With all the pieces of legislation that are constantly being updated it is easy to miss changes to legislation that are really important – especially if that change comes in the form of a Regulation (something typically drafted by a ministry such as the Department of...

NEW

Why South Africa’s draft revised material transfer agreement is not fit for purpose

Forcing a square into a circle: why South Africa’s draft revised material transfer agreement is not fit for purpose

PAIA manual

View the PAIA manual HERE 20230626_PAIA_Manual_Esselaar Attorneys_PGE

Paul Esselaar

Paul Esselaar completed his BA, LLB at Rhodes University in Grahamstown in 1997. Thereafter he attended the School for Legal Practice at the University of Cape Town in 2000 and went on to complete his articles at Kessler De Jager Inc. During his articles he focussed...

Web Site Terms and Conditions

The Esselaar Attorneys Web Site is subject to copyright by Esselaar Attorneys or is licenced under copyright from third party owners. You may reproduce any web page - subject to the disclaimer below - for personal use only. Any comments and statements contained within...

Email Disclaimer

This message and any accompanying attachment(s) may contain confidential and copyrighted information. If you are not the addressee(s) indicated in this message or responsible for delivery of the message to the addressee(s), do not copy or deliver this message or the...

Financial Services Laws General Amendment Bill tabled in Parliament

According to the South African Government News Agency (SANews) the Financial Services Laws General Amendment Bill was tabled in Parliament last week. In short, 'the Bill, which was released for public comment in March, addresses urgent issues in eleven financial...

Is the Financial Services Industry pulling wool over consumers’ eyes?

The Financial Services industry is in a state of flux. The Financial Services Laws General Amendment Bill (FSLGAB) was tabled in parliament on 25 September 2012. The aim of the Bill is to ensure that ‘South Africa has a sounder and better regulated financial services...

Credit Law: Section 89(5)(c) of the NCA declared unconstitutional

In the May/June edition of CLR Paul Esselaar wrote about a decision by the Western Cape High Court in which s 89(5)(c) of the National Credit Act was declared unconstitutional for being inconsistent with the right to property in s 25(1). In other words it was found...

Draft NCA Regulations on Affordability Assessments published

The Department of Trade and Industry has published draft regulations on, "Affordability Assessment for the Amendment of Regulations for matters relating to the functions of the National Consumer Tribunal and Rules for the Conduct of matters before the National...

Drowning in Red Tape: The new threshold for registration as a credit provider

With all the pieces of legislation that are constantly being updated it is easy to miss changes to legislation that are really important – especially if that change comes in the form of a Regulation (something typically drafted by a ministry such as the Department of...

South Africa has long been the wild west for direct marketers. Large databases of customer information are still being traded (often for startling sums of money) with no regard for the privacy of consumers (data subjects) or their right to know who has their personal information and what is being done with it. As technical tools evolve the invasion of personal privacy increases and there is a very real (but impotent) sense with consumers that their personal information is being traded and they are powerless to prevent it. 

Against this background we have the introduction of Regulation 6 of the Protection of Personal Information Act, which in turn requires companies to follow the format of form 4 when asking for direct marketing consent. Form 4 requires that the following text be used when asking for direct marketing consent:


I, (full names of data subject) hereby: 

¤ Give my consent. 

To receive direct marketing of goods or services to be marketed by means of electronic communication.


You can hardly imagine a less enticing way to ask for direct marketing consent. Direct marketers may still be willing to ask for consent from the consumer, but not with that wording. And before you think this is a small matter, just consider that the change in wording can be the difference between 50 000 consumers agreeing to receive direct marketing messages and 100 000 consumers agreeing to direct marketing (i.e. this is a BIG DEAL). 

But all is not lost as Regulation 6 as read with the definition of ‘form’ allows a direct marketer to request for direct marketing consent in ‘any form which is substantially similar’ to that form. (Our emphasis)

And herein lies the rub: No-one knows what is ‘substantially similar’ to form 4 and – inevitably – everyone is going to have a different interpretation of what is ‘substantially similar’. This will lead to – equally inevitably – the Information Regulator disagreeing with a direct marketing company as to what is ‘substantially similar’ as the IR will be inclined to require the direct marketing consent to be almost identical to Form 4, while direct marketers motivated to adapt the direct marketing consent as much as possible to be as attractive as possible to consumers. 

Ironically this issue is even bigger than it at first appears and that is due to the problem of legacy direct marketing consents. Let me explain. 

If you as a direct marketer go ahead and develop your direct marketing consent in a way that you consider to be ‘substantially similar’ you run the very large financial risk that your direct marketing ‘consents’ will be declared invalid at some point in the future. Declaring a couple of direct marketing consents to be invalid is obviously no problem, but if you have been using that same template for the last 6 months then you are suddenly in a situation where your ‘asset’ (500 000 direct marketing consents) is now worthless. That is an even BIGGER DEAL.

What to do? 

In my view the most practical way for companies to deal with this conundrum is for them to develop some direct marketing consents and send them to the Information Regulator for approval. Provided the IR responds and is reasonable in its response this is probably the easiest way for all the parties to avoid litigation and arrive at a general understanding of what ‘substantially similar’ is. The alternatives are complying with the exact wording of Form 4 or playing a game of direct marketing Russian Roulette…