Social media marketing and the Consumer Protection Act

Recently a report was released on how the Consumer Protection Act (CPA), which comes into effect on Thursday, will impact marketing efforts in social networks as well as online advertising and retailing in South Africa. The report was compiled by Phatic Communications, in association with Goldman Judin Attorneys Inc.

A few key elements of the CPA are summarised below, along with some quick tips on how to comply when marketing online.

Direct marketing defined

Anytime that a person is approached online for the direct or indirect purpose of promoting, selling or requesting a donation constitutes direct marketing. “Approaching” also includes something called cataloguing, which is when a product or service is sold, but not in person (i.e. online shopping).

Rights of Consumers

According to the CPA, consumers have three key rights:

  • The right to fair and responsible marketing
  • The right to fair and honest dealing
  • The right to fair value, good quality and safety

These are three of eight fundamental rights specified by the Act.

Restrictions on direct marketing

Every person has the right to refuse, require another to discontinue and pre-emptively block any approach or communication from those who are engaging in marketing.

Transactions covered by the Act

The CPA covers not only the selling of goods and services but also the giving of ‘advice’ or information online. Even in the case of free goods and services and information the act may apply. The Act therefore applies to a wide range of products and providers, whether they operate from South Africa or not.

Six steps to take as a Facebook marketer on Pages:

  • State clearly on the page ‘who’ is speaking. Facebook has now made this possible as an option to page administrators. Make use of this new functionality to show whom the administrators are behind the brand or page name.
  • In the page info make clear the qualifications or authority of those people posting on the page.
  • Private messages in Facebook may constitute direct marketing, depending on the content of the message, if they were not prompted first by the member. Do not send private messages for marketing or direct marketing, unless prompted, or unless you follow steps four and five.
  • Set up Terms & Conditions in accordance with the Act on your page. A good place to put this would be under ‘Info’. It is specified in the Act that these need to be in simple and very clear language, for the ordinary consumer to understand. In the Terms ensure that it is explained that joining the page amounts to explicit permission to receive posts on their personal wall and other forms of communication, for example an event invitation.
  • Set up internal systems and processes to allow consumers to ‘opt out’ of your communications if and when they want to. Describe these in your Terms and Conditions.
  • Make sure that your page advertising follows the code of the Advertising Standards Authority Code of Advertising Practice, the CPA and the ECTA.

Risks to suppliers and marketers

Suppliers will be liable for damages suffered by the consumer who has used a product, service or information provided by the supplier. If you give away confidential information about your communities you could be at risk of up to 10 years in jail if the CPA is not taken seriously. If you find yourself in contravention of any other section of the Act you may be fined up to 10% of your annual turnover for the preceding year.

Risks to international corporations

The Act applies to every transaction taking place in the Republic of South Africa. “Transaction” is defined very broadly by the Act. This means that consumers locally can sue international companies, including Facebook, Twitter and other social networking sites, if they do not comply with the Act.

The report on the CPA also outlines the effect on online advertising, selling and how, where and when marketers can register with the administrator of the CPA.

This marks an interesting turn around for online marketing agencies, companies and even individuals marketing products and services. Online marketers have often thought of social media marketing as ‘permission-based’ marketing. According to the Act, nothing is permission-based unless explicitly gotten in writing.

Ensure that your online marketing efforts comply with the CPA by applying the above tips in conjunction with the details specified by the Act and regulations, as there are many other parts of the Act that may be relevant to your business. Download a copy of the CPA and use the report as a starting point to protect your customers and business.



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