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Updated 30 Sep 2020

The prospects of POPI

Will your sales prospects be affected by POPI, or is your house in order? 

Nadine Todd, 08 September 2013  Share  0 comments  Print

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The Protection of Personal Information (POPI) Act was recently passed by the National Assembly and is currently waiting for the President’s signature to sign it in to law. Do you have a marketing strategy in place to deal with POPI’s new regulations? Or will your sales prospects be imminently diminished?

According to information governance specialist, lawyer and contributor to the Act, Francis Cronjé, the new Act could realistically take another 18 to 20 months to be in full effect, but this doesn’t mean you shouldn’t already be thinking about compliance.

Risky business

“The worst case scenario for non-compliance is that you could end up in jail,” says Cronjé, although this is of course for serious infringements of the law. For most companies, the reputational risk of non-compliance is far greater than the legislative risk.

“You need to understand the spirit of the law,” he explains. “Let’s use identity theft as an example. The Act has been designed to protect personal information, because in today’s digital age there are serious implications in how this information is handled.”

In light of this, marketing is just one small part of the Act, but it’s an important part, and one consumers are increasingly going to be paying attention to. 

“Through the Act, consumers have a right to privacy. Their personal information belongs to them, and they have a right in determining what their information is used for and how it’s being handled. They’re also educating themselves, which means they’ll understand when a company is abusing their rights. The misuse and misrepresentation of information can cause serious reputational risk to businesses who are unscrupulous with this information.”

Avoiding marketing mis-steps

According to Cronjé,companies will have to change their strategy, approach and way of doing business if they want to ensure their reputations remain intact.

“The good news is that POPI doesn’t prevent anyone from marketing to or prospecting for new customers,” says Cronjé, “but it does affect the way you market. The legislation provides checks and balances when processing personal information and some of those relate directly to marketing.”

Here’s how it works. You’re not allowed to contact someone via sms, cold calling, or email if those contact details weren’t lawfully obtained. “One lawful way of collecting data is through the use of public

Registers,” says Cronjé, adding that those registers might have certain limitations as to what they can be used for, and it’s to be aware what those are.

You also need prior consent to hold and use personal details. This can take two forms. “At the point of sale you can ask your customer if they’d like to receive promotional information from you or third party distributors and suppliers.

You then must include a specific opt-out option in all subsequent contact. A second scenario is that if you buy something from me, I can consider you a customer and send you marketing that relates to similar products. Again, I must provide you with an opt-out option though.”

You’ll have to ensure that you act within the ambit of the Consumer Protection Act. There are specific instructions on appropriate days and times for making sales calls. For example, you can’t sms someone in the middle of the night, even if you lawfully hold their details.

Keeping up with best practice

The Consumer Protection Act and Electronic Communications Act have already laid the foundations for consumer protection, which makes POPI an extension of this protection.

“Europe has followed these guidelines for almost two decades, and consumers have become a lot more vocal in opting in, opting out, and wanting to know how companies obtained their information,” says Cronjé.

“Businesses that have paid close attention to best practice in Europe and Australia would have already started changing the way they obtain client information and what they do with it.”

For Cronjé, this goes back to reputational risk. “Scrupulous companies understand how important it is to only approach consumers who want to be contacted. If you’re unscrupulous in how you obtain personal information, and more importantly in what you do with it, there will be a consumer backlash, and this will hurt your brand.  

As long as you have the best interests of your consumers in mind, you can differentiate yourself as a trusted source and holder of contact details. As consumers demand greater accountability, this will become more and more important.”

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Nadine Todd

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