More than a decade after government first proposed an opt-out registry, it is set to be implemented. (Graphic: Nicola Mawson | Pexels)
The Direct Marketing Association of South Africa (DMASA) welcomes government’s move to cut down on spam calls through the creation of an opt-out registry, but says there will be implementation challenges.
Late last week, Department of Trade, Industry and Competition minister Parks Tau signed new regulations into law that create an opt-out registry, requiring direct marketers to check their databases against the list and not call or e-mail anyone who has opted out of marketing communications.
Truecaller’s most recently available report on spam callers notes South Africa is typically one of the most spammed countries in the world.
More than half of all spam calls are from financial services companies. (Source: Truecaller)
“Calls tagged as financial services account for 50.7% of all spam calls,” it says, noting that “insurance companies are a big reason for this increase”.
Government first mooted an opt-out registry when the Consumer Protection Act (CPA) was signed in 2008, coming into effect in 2011. More than a decade ago, the National Consumer Commission (NCC) said the database would be operational within four months.
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DMASA, a voluntary industry association, says it “welcomes regulatory efforts that strengthen consumer protection, while recognising the importance of maintaining a balanced, sustainable business environment that supports trade and economic growth”.
However, in a statement issued by CEO David Dickens, it says that, “as with any regulatory change, implementation challenges are anticipated”. It lists these as the cost of registration and database cleaning, as well as the potential downstream impact on businesses and consumers across the value chain.
Law firm Michalsons has also cautioned that managing and processing personal information required to maintain the pre-emptive opt-out registry will be a significant challenge. “The commission will handle substantial personal information, necessitating stringent security measures to mitigate potential risks.”
Neither the department nor the NCC had provided a statement as of ITWeb’s deadline.
DMASA, while implying there wasn’t enough stakeholder engagement, says further clarity from government on implementation aspects “will be essential to ensure smooth and fair adoption”.
Dickens also notes that its own do-not-contact registry remains fully operational to ensure responsible marketing practices. The association is funded through its members and can ban offenders, with membership carrying reputational weight in the industry.
“The association looks forward to ongoing dialogue with government and stakeholders to ensure that implementation is both effective and sustainable for all parties,” Dickens says.
According to Business Process Enabling South Africa statistics, cited by omnichannel contact centre solution provider telvoip.io, more than 300 000 people – close to 2% of the working population – are employed in the direct marketing industry. The sector’s contribution to the economy is valued at $460 million (R7.5 billion).
In 2022, South Africa was ranked the second most attractive BPO destination worldwide, behind only India, it says.
Law firm Mayet & Associates points out that the new registry may create tension with existing legislation. “From a consumer perspective, these changes provide a powerful tool to prevent unwanted marketing and strengthen control over personal information.”
For businesses, however, the rules impose new compliance burdens that could significantly impact marketing strategies, especially for those that rely on large-scale outreach,” it says.
There could also be a clash brewing between the Information Regulator and the NCC. The NCC’s registry is an opt-out solution, while the Information Regulator – under the Protection of Personal Information Act (POPIA) – requires that consumers opt-in for marketing calls.
Mayet & Associates notes POPIA trumps the CPA, and that POPIA already restricts direct marketing unless a consumer has provided explicit consent, or is an existing customer under specific conditions.
“Under the proposed CPA amendments, even if a consumer has not opted out of the registry, marketers must still obtain lawful consent under POPIA before sending any marketing content,” Mayet & Associates says.
Law firm Michalsons says the request for comment on the proposed database last year coincided with the Information Regulator’s guidance note to direct marketers under POPIA, but says these were separate activities and “not a coordinated approach between different departments”.
“It appears that a fight is looming. The direct marketing industry will not accept the regulator’s interpretation and will probably sue the regulator. We expect this to be an ongoing issue for some time to come,” said Michalsons in 2024.
The firm says the issue revolves around the interpretation of “electronic communication,” which includes any text, voice, sound or image message sent over an electronic communications network.
The Information Regulator had not responded to a request for input by ITWeb’s deadline.
