The Consumer Protection Act is changing what many companies say to their customers and the way they say it. It obliges companies to communicate with consumers in a way that is fair and easy to understand.
The Act impacts business communications at many levels, from consumer contracts and agreements to marketing and advertising. Plain language is mentioned in many sections of the Acts.
Plain language is an obligation
For example, the Act states that all agreements for consumers must be in plain language and set out an itemised breakdown of the consumer’s financial obligations under the agreement (section 50).
Any notice about limiting a company’s liability or indemnifying a company ‘must be drawn to the attention of the consumer’ and be in plain language (section 49). Plain language is also a requirement for franchise agreements (section 7).
Because plain language is a fundamental right, it cannot be contracted out of. This means that documents must be in plain language, regardless of whether the customer has stated that they understand it or not.
But what is plain language?
Plain language is given a broad (and unfortunately wordy) definition in the Act:
‘A notice, document or visual representation is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or visual representation is intended, with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance, and import of the notice, document or visual representation without undue effort, having regard to—
- the context, comprehensiveness and consistency of the notice, document or visual representation;
- the organisation, form and style of the notice, document or visual representation;
- the vocabulary, usage and sentence structure of the notice, document or visual representation; and
- the use of any illustrations, examples, headings, or other aids to reading and understanding.
One important point to note about the definition is that it speaks about the ‘ordinary consumer’ with ‘minimal experience as a consumer of the relevant goods or services’ – no more targeting the average level of experience!
The Act also notes that the Commission may publish guidelines for plain language. (Section 22)
‘Double-speak’ will be interpreted to the benefit of consumers
Some companies have been guilty of using vague clauses to give them wiggle-room in case there is a dispute after an agreement is signed. The Consumer Protection Act aims to end this practice. According to the Act, the courts must interpret documents and contracts and forms to the benefit of the consumer:
‘A court or Tribunal must interpret any standard form, contract or other document prepared or published by or on behalf of a supplier, or required by this Act to be produced by a supplier, to the benefit of the consumer —
(a) so that any ambiguity that allows for more than one reasonable interpretation of a part of such a document is resolved to the benefit of the consumer…’
Alison Lee, CEO of the Corporate Lawyers’ Association of South Africa, has summarised how courts must interpret documents under the Consumer Protection Act:
“The court will look at the surrounding circumstances to ascertain if the document was explained to the consumer, that it was understood by the consumer, that it was directed at his level, did not contradict with other documents or provisions and that the document was fair and not unconscionable and did not expose the consumer to prejudicial circumstances.”
Advertising must be absolutely honest
The Act has many implications for marketing and advertising. Advertising must not be false or misleading. It must not ‘directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact’ (section 41).
What’s more, it must not ‘use exaggeration, innuendo or ambiguity as to a material fact’. This is interesting as some would say that these techniques are standard fare of much advertising.
Leaving out important information is also forbidden. The Act says that advertising cannot ‘fail to disclose a material fact if that failure amounts to a deception.’
Lastly, the Act takes into account any incorrect assumptions a consumer may already hold, and puts the onus on advertisers to set them right. Advertisers must not ‘fail to correct an apparent misapprehension on the part of a consumer or prospective consumer, amounting to a false, misleading or deceptive representation…’. (Section 41)
Marketers must have a clear understanding of the Act
The Act includes information about discriminatory marketing, which is important to any marketer who targets particular groups for particular products or services.
Marketers need to debate how to interpret section 8, which details what discriminatory marketing is and is not allowed (for example, marketers are still allowed to target minors and people over a certain age). There are also implications for other types of marketing and for competitions.