Unsolicited direct marketing - Narrative
Hello all, and welcome back to Lightstone’s POPIA for Estate Agents podcast.
In the last two episodes we dived into the detail of the law, and unpacked the 8 conditions for lawful processing that all responsible parties need to adhere to.
One thing is clear - if you’re a Responsible Party handling data, you need to adhere to those 8 conditions. But several of our Estate Agent clients have been asking questions about what exactly the POPIA implications are to a critical part of their business and that is finding people who want to sell their houses, and securing the listing. Our first two podcasts covered various elements of this topic – The Client Contact Book, and Consent – but as we get closer to POPIA implementation, and Estate Agents are contemplating the impact of this on how they conduct business, this becomes an important topic to revisit from a different angle.
That’s why we’ll be dedicating the next two podcasts to exploring the theme of contacting people to solicit listings, or essentially unsolicited Direct Marketing.
To help me tackle this mammoth task, I welcome back Esteani Marx, Head of Real Estate Agents at Lightstone.
Thank you Linda. This is such an important topic and it will have a significant impact on Estate Agents. So let’s dive in and start exploring the facts.
Great. OK, to start with, when you contact somebody without them seeking that contact, in order to sell them a product or service, that is called unsolicited Direct Marketing. This is because you are contacting a person directly for the purpose of marketing your services to that person, who has not asked for those services. There are two current laws that govern aspects of Direct Marketing and POPIA will be the third. We are aware that there is currently a great deal of confusion about the rules that will regulate how Estate Agents (and other direct marketers) may reach out to consumers to market their services.
What are these two current laws, and will they still be relevant when POPIA becomes enforceable?
There’s the ECTA, which stands for the Electronic Communications and Transactions Act of 2002, which came into effect in 2002, and the Consumer Protection Act of 2008 which has been in place since 2011. Both Acts are long and detailed and regulate a variety of matters, only some of which are relevant to today’s conversation. So please be aware that this is a drastic simplification because we only want to touch on the points that are relevant to Direct Marketing in those Acts. In other words, we want to discuss how the ECTA and the CPA applies to Direct Marketing methods to sell your services to new clients.
Right, and our listeners must be aware that this Podcast does not constitute legal advice. If you have questions or a need to take onward action in your business, please seek the input of a legal professional who can guide you based on the specifics of your business and circumstance. To help our Estate Agents though, could you briefly describe what those laws state about Direct Marketing?
Sure. Let’s start with the ECTA, which regulates the sending of ‘unsolicited commercial communications’ to consumers. If you want to send these communications, the Act says that you must provide the consumer with the option to cancel their subscription to your ‘mailing list’ (the so-called 'opt out approach') and, if the consumer so wishes, you need to tell them where you got their details. It’s an offence to not do either of these two things.
Right – and will that continue to be the case after POPIA’s grace period is over on 30 June this year?
No, actually the commencement of POPIA on 1 July 2021 will repeal the Direct Marketing provisions of the ECTA, because POPIA supersedes the Direct Marketing elements of the ECTA. The digital and communications world was very different in 2002. From 1 July 2021, all processing of personal information for purposes of Direct Marketing by means of unsolicited electronic communications must comply with POPIA, while the manner in which you undertake the Direct Marketing, must still comply with all CPA requirements.
OK so we should have been doing what the ECTA outlined all along but we now don’t have to from 1 July this year. Is that what you are saying?
Yes you should have been and must still apply them until 30 June. This law won’t apply after 30 June BUT POPIA outlines other specific things that you need to do.
What about the Consumer Protection Act, what does that say about Direct Marketing?
Unfortunately, both the CPA and POPIA will apply to Direct Marketing of customers. It is a very complex legal area as a result of this position. Basically, both Acts will apply to Direct Marketing unless they are mutually inconsistent, in which case the Act that provides the most protection to the consumer will apply. The CPA basically grants everyone the right to restrict unwanted Direct Marketing. One thing that’s important to understand is the definition of Direct Marketing under the CPA. It is "to approach a person, either in person or by mail or electronic communication, for the direct or indirect purpose of (i)promoting or offering to supply, in the ordinary course of business, any goods or services to the person; or (ii) requesting the person to make a donation of any kind for any reason". The reason this is important is because, while the definitions for Direct Marketing are very similar between POPIA and the CPA, the CPA regulates all forms of communications to a consumer for Direct Marketing purposes, whereas the POPIA definition only covers Electronic Communication, as we will get to later.
OK, so what does the CPA say that I have to do when contacting somebody with the purpose of marketing to them?
A consumer has the right to tell you to stop contacting them, and to pre-emptively block any contact. You also need to have processes in place that ensure you can act on this requirement and the consumers’ requests.
What does it mean to ‘pre-emptively block’?
Basically, there should be a place or list on which consumers can put their name in order to prevent people contacting them for Direct Marketing in an unsolicited way.
So where is this list?
Well actually The National Consumer Commission has yet to establish or officially recognise a registry where people can register a pre-emptive block. It is not clear what this process is and the National Consumer Commission has not indicated when such a registry will become available. But one such list, probably the most effective one, is managed by the Direct Marketing Association, and people who wish to avoid Direct Marketing should go to their website and register their details. The Direct Marketing Association is a voluntary association which has a voluntary code for its members.
How does this affect the lists of contact details that Estate Agents have historically used to do Direct Marketing?
Well, many of the companies who provide lists of contact details to various types of business, are members of the DMA and run their lists of contact details against the DMA list before providing them onwards. This practice, of selling personal information for Direct Marketing purposes, will naturally have to be compliant with POPIA from 1 July 2021.
OK so this has been handled then, and I don’t need to worry about it?
Not necessarily. You need to check with your provider as to whether they are DMA members and whether they run opt-outs against DMA lists before providing them.
Let’s get back to the CPA then. What else does the CPA say about Direct Marketing?
Well, the CPA restricts the times at which people can contact consumers for Direct Marketing purposes. You are not allowed to contact them on Sundays, public holidays, Saturdays before 09h00 or after 13h00 and before 08h00 or after 20h00 on any other day, unless the consumer has expressly or implicitly requested or agreed otherwise.
Oh wow, so basically I can only conduct Direct Market between 8am and 8pm from Monday to Friday and 9 to 1 on Saturdays. Plus, I must give the consumer the option to ‘unsubscribe’ on all my communications, as well as having the ability to check someone’s preferences before contacting them?
In a nutshell, yes. And this has always been the case for purposes of the CPA. And that won’t change when POPIA comes into force, as those provisions do not get repealed when POPIA is active. But, as mentioned before there are additional requirements that will come into play with POPIA, which we will unpack in our next episode.
I have a feeling that’s going to be an important episode.
You are right. There is a lot to unpack and understand, so I do hope our listeners join us again next week as we build on the foundation we laid today. The bigger picture will become more clear next week, I promise! Until then, thank you to Esteani and to all our listeners. Until next time, keep listening and learning more about POPIA. Goodbye.
Goodbye everyone.