Mislead the consumer at your peril

2011-03-16 00:00

DEVISING ways to persuade consumers to choose your goods or services over those of your rivals is a large component of a business.

The Consumer Protection Act, now less than a month away from implementation, places restrictions on marketing practices to ensure that consumers are not duped into buying things as a result of unfair or misleading marketing tactics.

The act places general restrictions on marketing.

Essentially a supplier cannot mislead consumers about information they need in order to make an informed decision on whether to enter into a transaction.

Representations must be accurate and any claims made must be capable of substantiation. Misleading consumers would include making them think (or not correcting their obviously mistaken assumption) that goods or services will have any features, qualities, associations or benefits they do not have.

A good example is claims on weight-loss products. The statement, “Take these pills and you will lose 10 kg a week”, will need to be justified.

The Consumer Protection Act also makes specific marketing practices unfair.

Bait-marketing, which is exactly what the name suggests, is outlawed.

Consumers will no longer be lured into a supplier’s premises on the promise of goods at very special prices only to receive a nasty shock when there are no goods left at the special price (or probably never were).

This technique is used to get feet into stores; once consumers are in the store, there is a real chance that they will buy something. In future, suppliers can offer special prices for restricted amounts of goods, but they must ensure that they tell you what is available and actually have the goods for sale.

Another no-no that is common is negative option marketing.

This happens when you are supplied with goods or services on the basis that, unless you respond to say you do not want the goods, then they are yours.

Consumers must be allowed to choose to enter an agreement and not have things thrust upon them. If this happens in future, the consumer will have all the rights.

Suppliers will need to review all their promotional material to ensure that marketing efforts do not get them into trouble.

Rosalind Lake, Associate, Deneys Reitz

The Witness in association with Deneys Reitz Inc. will publish a weekly column on the Consumer Protection Act, which comes into effect on April 1, touching on a variety of topics to inform businesses and consumers about the widespread and serious implications of the act.

 

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