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Consumer Protection Act: part 2

10 Jun

Direct marketing under the CPA:

Direct Marketing is generally seen as an aggressive way of bullying consumers into buying products they don’t necessarily want. The Act looks at whether or not a transaction was “unconscionable”, meaning whether or not any mechanism or behaviour can be seen by the consumer as forcing or manipulating them into a sale, in other words, taking advantage of them

It is important to note that in terms of the Consumer Protection Act of 2011, direct marketing is defined as being:

‘‘to approach a person, either in person or by mail or electronic communication, for the direct or indirect purpose of-(a) promoting or offering to supply, in the ordinary course of business, any goods or services to the person; or (b) requesting the person to make a donation of any kind for any reason

 The Consumer’s rights

The Act makes provision for the rights of individuals and the way in which marketing events are structured, the core to this being strict liability on the entire supply chain.

Many consumers are under the impression that the Act changed how marketers may communicate with them and that they may first opt-in before they can be marketed to. This is not the case- the act just provides consumers with the right to opt-out of unwanted marketing.

Every person has the right to require a marketer to discontinue any approach or communication that is primarily for the purpose of direct marketing. This is specifically referred to in the Act under Section 11 as the consumer’s right to privacy.

 Practical implications for suppliers

The Direct Marketing provisions of the Act means that a lot of businesses will need to change their marketing strategies and make sure that proper processes are put in place to give effect to the legislation.

 Suppliers can do the following:

  • Review IT processes to make sure that provision is made for implementing demands of consumers.
  • Review marketing strategies to make sure that all the requirements are met, for example notifying the consumer that they have a five day cooling-off period.
  • Review contracts with direct marketers.

 Application of CPA to property transactions:

One of the consequences flowing from the CPA for transactions concluded as a result of direct-marketing is the ‘right to cool-off’ (section 16 of the CPA), afforded to consumers. In terms of this provision, a consumer who purchases a property as a result of direct marketing is permitted to cancel the transaction, after the property has been registered and the sale agreement has been signed.

 Please note that if you want more information regarding the above , please feel free to contact our offices.

 
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Posted by on 10/06/2011 in Content

 

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