R1-million warning for spam callers

Entities that have contravened the proposed amendments to the Consumer Protection Act concerning direct telemarketing and the National Opt-Out Registry could face a penalty of up to R1 million.

This is according to the Minister of Trade, Industry, and Competition, Parks Tau, who responded to a Parliamentary question regarding how his department plans to enforce the new regulation.

In October, Tau proposed an amendment to the CPA that called for creating a national opt-out registry to combat spam calls in South Africa.

While there is already a national opt-out database run by the Direct Marketing Association (DMA), it only protects registered users against members of its organisation.

The proposed registry will be government-run and allow users to register a pre-emptive block, barring all communication from direct marketers.

According to Tau, these proposed amendments follow an outsourced feasibility study conducted by the National Consumer Commission in 2018 in Australia, Canada, the European Union, and the United Kingdom.

Tau told Parliament that people who experience intrusive marketing should lodge a complaint with the National Consumer Commission (NCC), specifying the contravention of the CPA.

The NCC will then initiate an investigation into the matter, and if found to be prohibited conduct, the National Consumer Tribunal will impose an appropriate fine.

This fine will not exceed the greater of 10% of the entity’s annual turnover or R1 million.

The Information Regulator has a similar complaints submission process that South Africans can use to report spam callers. It recently told MyBroadband that 135 complaints were made between April and October.

When asked what his department would do to enforce the penalties, Tau said his powers are limited in scope.

“The Ministers’ powers in terms of the Act are limited to policy direction, and the Act provides for competent creatures of statute that enforce the provisions of the Act,” he said.

“Therefore, the orders issued by the Tribunal enjoy the same status as the High Court, and failure on the part of the supplier to comply with such an order constitutes an offence.”

Tau said that the penalty for such an offence would be imprisonment for a maximum of 12 months, a fine, or both. A Magistrate Court will impose this.

To comply with the proposed amendments to the CPA, direct marketers will have to annually register on the opt-out registry and ensure that this information stays up to date.

They will need to remove all users in the opt-out registry from their database by “cleansing” their database.

Additionally, companies will not be allowed to advertise to South Africans without identifying where the message originated.

Therefore, they will need to ensure that the recipient of the marketing communication can identify the company’s name, physical and electronic address, and contact number.

To register on the opt-out database, citizens must submit a form requiring private information, for which the DTIC will be responsible for safekeeping.

The proposed amendments were open to public comment for 45 days from 28 October and closed on 12 December.

This proposed opt-out registry could help address a loophole in South Africa’s Protection of Personal Information Act (Popia).

The loophole potentially allows telemarketers to exploit the rule that they must request consent to market to someone on their first call to that individual. 

However, no regulation specifies a limit to how many times telemarketers can call to request consent.

Therefore, telemarketers could spam call South Africans to request consent if they don’t answer these calls.

Another problem the Information Regulator previously said it faced regarding direct marketing was a lack of complaints.

It said some individuals were under the false impression that they could receive a financial reward for lodging a complaint.

When they realise there is no reward, they often abandon their complaints.

It can also be challenging to file a complaint because people often don’t have enough information about the direct marketers who contacted them.

Regarding the convenience of lodging complaints, the Information Regulator said it is developing a complaints management system to make the process efficient and seamless.

As for the lack of information about direct marketers, the DTIC’s plan to force them all to register could help address that issue.