Nicolette Dirk
THE implementation of the Protection of Personal Information (Popi) Act will stop direct marketers from sending unsolicited e-mails or text messages, or making cold calls to consumers, according to Darryl Bernstein, a partner in the law firm Baker & McKenzie.
The new act is set to come into effect by the beginning of July, and by the end of 2017 the Information Regulator will be empowered to implement fines of up to R10 million for companies and businesses violating the act.
Bernstein said up to now businesses had freely traded in customer information, regardless of the accuracy of the information or whether customers wanted to protect it.
“Business involved in direct marketing have also been known to contact prospective customers, via e-mails and SMSes, without regard for the privacy requirements of those customers.
“In the absence of a legal framework for the protection of the constitutionally entrenched right to privacy, it has been very difficult for individuals to protect themselves against any kind of abuse.”
The Popi Act will have a profound effect on the way businesses deal with their customers, particularly how they collect, use and disclose the information provided to them by customers.
“They will be required to implement systems for the lawful collection of customer information and communicate with customers regarding the information collected, the reason for its collection, and the accuracy and retention of such information.
“Another significant way in which business will be affected is in their marketing strategies.
“Direct marketing, especially through unsolicited e-mails, SMSes or cold calling, will no longer be permitted without prior consent on an opt-in basis, save in respect of existing customers in certain limited and regulated circumstances,” said Bernstein.
Organisations risk substantial fines, jail time for executives and regulatory interference in the manner in which they conduct their business if they are not compliant with Popi.
“In addition, and perhaps equally concerning, is the reputational damage that non-compliance could create, resulting in the loss of customers,” said Bernstein.
He added that in the light of the limitations on direct marketing, many believe small and medium businesses, which are heavily reliant on untargeted direct marketing campaigns, will be the most heavily impacted.
“These businesses will need to work incredibly hard and incur considerable expense to ensure that their direct marketing communications are not unsolicited.
“Their existing databases will need to be audited and updated, and opt-in consent will have to be obtained,” said Bernstein.
Managing director of Metrofile Records Management Wayne Clarke said in the light of the significant pressure that will be placed on unprepared businesses, the decision to outsource their Popi-related responsibilities may be an ideal solution, especially considering the enormous penalties.
“With the limited amount of time left to ensure compliance, the decision to outsource these services does not only have the potential to protect the business from irreparable reputational damage, but can also save the business money in the long run through the avoidance of fines.”