Spammers beware! Sending unsolicited e-mails, SMSs and faxes could soon be illegal if parliament passes the Protection of Personal Information Bill 2009 (the 'Bill'). If passed, the law could have a significant impact on the practice of direct marketing in South Africa – a cause for celebration for those continually harassed by direct marketers and a cause for concern for those employed in this labour intensive industry.
The Bill effectively sets out to outlaw unsolicited e-mails, SMSs and faxes while at the same time preventing call centres from creating and using contact lists to reach potential customers without their prior consent. Following international trends, the move is away from an 'opt out' approach towards an 'opt in' approach requiring the consumer’s consent before contact is made. Since prior consent by definition excludes 'cold calling' and 'spam', this will lead to major changes in the industry.
As the law stands, direct marketers are entitled to send electronic messages, usually SMSs and e-mails, to potential customers. However, these messages must include information identifying their source and must allow the receiver to opt out of receiving further communications. Unsolicited telephone calls are allowed but are subject to regulation in the credit and financial services sectors. The rules in these sectors prevent harassment, give receivers an option to opt out of receiving further calls and provide a code of conduct for call centre workers to follow. New consumer protection laws also provide for a cooling off period, authorise future regulation as to permissible hours for direct marketing and pave the way for the establishment of a national Do Not Call registry.
The Bill aims to protect all personal information that is processed by public and private bodies. This follows similar legislation in the United Kingdom and the European Community. The Bill contains a number of provisions regulating the types of information that may be obtained and the manner in which it may be processed. For example, the Bill prohibits, except in narrowly defined circumstances, the processing of personal information regarding a subject’s race.
Section 66 of the Bill effectively prohibits all unsolicited electronic communications. This prohibition covers SMSs, e-mails, faxes and automatic calling machines capable of making outbound calls with a recorded voice. Under section 66, all these types of unsolicited electronic communications will only be allowed where the receiver has given prior consent or is an existing customer of the company. Communications can only be sent to existing customers where their contact details were obtained through a previous sale of a product or service. Furthermore, these communications can only be in the context of selling a similar product or service from the same company. Thus the practice of selling contact lists to other companies will be illegal. Adding to this, the existing customer maintains the right to opt out at any stage.
While there is no provision in the Bill that specifically prohibits the making of commercial sales calls, the general law regarding the processing of personal information in Section 10 of the Bill only allows the processing of personal information in a limited number of situations. This would effectively prevent a business from compiling and using a database of numbers of potential customers, unless the business has already obtained their consent to be contacted. Apart from dialling numbers at random from a pre-existing printed or off-line electronic telephone directory, processing a database of contacts will probably only be possible for the purposes of making commercial sales calls if it is shown to be 'necessary for pursuing the legitimate interests' of the business on whose behalf the calls are made. It is unclear at this stage whether 'legitimate interests' would include a business’s desire to promote its products and services.
If the Bill comes into force, businesses will be given one year to conform to its requirements. An office of the Information Protection Regulator will be set up to enforce compliance with the Bill and enforcement notices will be served on businesses who fail to comply. Continued non-compliance with an enforcement notice may lead to a fine or imprisonment for a maximum period of twelve months. A civil damages claim may also be available to a consumer against an offending business.
The Direct Marketing Association of South Africa (DMA) has made a number of submissions regarding the Bill. At this stage the Bill is before the Portfolio Committee on Justice and Constitutional Affairs. It is not clear what final form the Bill will take, but it is clear that a balance needs to be struck between competing interests. The frustration of spam filled e-mail and SMS inbox’s and the annoyance of a dinner being interrupted by an unsolicited sales call are common irritations in the lives of many ordinary South Africans. Some may even feel that these constitute an encroachment on their privacy. On the other hand, the direct marketing industry is one which provides employment for thousands of South Africans and the outsourced call centre industry has great potential for international growth. It is hoped that the final piece of legislation will take into account these competing concerns.
For more information contact Daniel Breier (CA CPT) and Katia Mengel (Senior Associate CPT), Deneys Reitz, www.deneysreitz.co.za
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