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Marketing practices and the Consumer Protection Act – how business owners should safeguard themselves and their businesses
NICOLENE SCHOEMAN LLB cum laude (UFS) LLM (UFS)
t 021 425 5604 f 021 421 8913 e [email protected] w www.schoemanlaw.co.za
a 8th Floor, 80 on Strand Street, Cape Town, 8000 p PO Box 507, Cape Town, 8000
Disclaimer• Both this presentation and slides are copyright protected.• In terms of the Copyright Act No. 98 of 1978, no part of this
presentation and slides may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without the prior written permission from the author.
• This presentation and slides are for educational purposes only and does not constitute legal advice.
• The author and Schoemanlaw Inc t/a Schoeman Attorneys, Conveyancers and Notaries Public (Schoeman Attorneys) do not accept any liability for any loss or damage that may be occasioned as a result of the reliance by any person on the information contained in this presentation and/or slides.
Who does it apply to?Supplier a) “in relation to goods, includes sell, rent, exchange and hire in the ordinary course of business for
consideration; or b) in relation to services, means to sell the services, or to perform or cause them to be performed or
provided, or to grant access to any premises, event, activity or facility in the ordinary course of business for consideration.”
Consumera) “a person to whom those particular goods or services are marketed in the ordinary course of the
supplier's business;b) a person who has entered into a transaction with a supplier in the ordinary course of the supplier's
business, unless the transaction is exempt from the application of this Act by section 5(2) or in terms of section 5(3);
c) if the context so requires or permits, a user of those particular goods or a recipient or beneficiary of those particular services, irrespective of whether that user, recipient or beneficiary was a party to a transaction concerning the supply of those particular goods or services; and
d) a franchisee in terms of a franchise agreement, to the extent applicable in terms of section 5(6)(b) to (e).”
Advertise, display or offer to supply any goods or services.
Ordinary course of business. To the public for consideration.
Any representation in the ordinary course of business =
reasonably willing to supply any goods or services for
consideration.
Any other conduct in ordinary course of business =
reasonable inducement or attempted inducement to
engage in transaction.
Promote
GOODS: sell, rent, exchange and hire in the ordinary course of business for
consideration.
SERVICES: sell , or to perform or cause them be performed or provided, or to grant access to any premises, event,
activity or facility in the ordinary course of business for consideration.
OR
OR
Cooling offIn terms of section 16 the consumer may cancel without penalty any transaction within 5 business days after the agreement was concluded or goods delivered. Direct marketing“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.” Promoting“a) advertise, display or offer to supply any goods or services in the ordinary course of
business, to all or part of the public for consideration; b) make any representation in the ordinary course of business that could reasonably be
inferred as expressing a willingness to supply any goods or services for consideration; or
c) engage in any other conduct in the ordinary course of business that may reasonably be construed to be an inducement or attempted inducement to a person to engage in a transaction.”
Marketing practices - general• No false or misleading or deceptive representations or bait marketing (availability)• No misleading trade descriptions• No unfair, unreasonable or unjust price, marketing or negotiation – broadly no
‘exaggerated’ puffery• No unconscionable conduct / fraudulent schemes and offers• Do not offer customer loyalty where no intention to actually offer it
= GREAT emphasis on honesty
• No overselling or over booking – supplier must refund + interest + compensation, defence where supplier arranges comparable substitutes
• No negative option marketing – not legally binding• Referral selling – may not offer a discount where the consumer agrees to refer other
customers• Unsolicited goods - deliver a product and force sale• Promotional competitions• Direct marketing
No one may inform another that he/she has won a competition if:
• No competition conducted• The person has not actually won the competition or prize• Prize was made generally available• Prize for a competition subject to previously undisclosed
condition• Required to buy something or pay something for the