We have all tried our luck in winning cars, holidays or even airtime and data, through competitions held to promote companies or businesses.
Your consumer rights when you participate in any competition are protected by the Consumer Protection Act (CPA), and this is specifically included because many consumers have complained about competitions, especially those held in the early 2000s by timeshare companies calling you to say that you have win a prize, but then you are required to attend the presentation to “win” the holiday even if you never entered.
It is important to first see how the CPA defines promotional competitions, participants, prizes and promoters in section 36.
Promotional competition is a competition, game, scheme, arrangement, system, plan or device for distributing prizes by lottery or chance, conducted in the ordinary course of business to promote producers, distributors, suppliers or associations, or to sell products. goods and services, where any prize exceeds R1, regardless of whether the consumer is required to demonstrate skill or ability before winning the prize.
Entrants are defined as consumers who enter, compete or otherwise win a promotional competition.
Prizes can be rewards, prizes, free goods or services, price reductions or special privileges, increases in quantity or quality of goods and services or other discounted or free goods.
A promoter is a provider who directly or indirectly promotes, sponsors, organizes or conducts a promotional competition or for the benefit of which the competition is provided, sponsored, organized or conducted.
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The CPA covers the competition
Section 36 specifies that promotional competitions must be used to promote the provision of certain goods and services in the ordinary course of business and that winners must be selected by lot or by chance, such as a random draw. This means that the occasional raffle or lucky draw by the school or church is not a promotional competition and does not have to comply with these requirements.
This condition to win is not allowed
Have you ever participated in a competition where you had to pay to have a prize delivered, or where you had to buy something to qualify? Well, this is not allowed.
Under section 36, no one is allowed to tell you that you have won a prize if:
- There is no competition
- You don’t win
- You must meet the previously undisclosed requirements
- You have to pay or buy something else to get the reward
- You are not eligible to win prizes and
- If the gift is generally available or offered to all consumers or the same group.
Section 36 also specifies that the company cannot ask you to pay for postage or the cost of sending an entry, and this includes paying for the opportunity to participate, access to the competition, or the equipment used to enter the competition.
You also cannot be required to purchase goods or services at a higher than normal price.
According to Regulation 11, SMS entries cannot exceed R1.50 and you do not have to pay for further communication.
Illegal goods or services, such as child pornography or drugs, also cannot be gifts.
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Who can win?
Most of the competition disqualifies anyone who works for the company or its suppliers and their immediate family members.
Section 36 takes this further, by prohibiting companies from giving gifts to any person who is a director, member, partner, employee, promoter agent, consultant, any person directly or indirectly a promoter, or who is a supplier of goods. and services related to competition.
Competition rules
Section 36 requires companies to draw up competition rules before the start of the competition and to provide these rules free of charge to the National Consumer Commission and participants who request them.
In addition, the company must keep a copy of the rules for at least three years after the competition ends.
It is enough to have the rules available on the website.
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Offer opportunities to participate
When a company offers you the opportunity to participate in a promotional competition, the offer should clearly state what you can win if you enter, what you need to do to accept the offer and participate, how the results of the competition will be determined, closing. date, how the results will be made known and the contact details of the person who can give you a copy of the rules of the competition and the date, time and place where you can claim the prize.
The organizers may include this information in competition entries, attached documents or advertisements published at the time and in the area where the competition is held.
It should be attractive, and should be clearly linked to the competition.
You have the right to participate in the competition as soon as you comply with the requirements and gain entry to the medium to enter the competition.
You have the right to claim the prize as soon as the result of the competition is determined and you cannot be subject to other conditions or payment for the prize.
Your right as a winner
If you win, the company or promoter cannot, under section 36, force you to take part in marketing and this includes using your photo.
You should get the chance to say no and that is why you will often see in the rules of the competition that you have to participate in marketing, such as having images used in promotions.
However, promoters who include this as a requirement in the rules will not be allowed to apply under regulation 11.
Pick a winner
According to section 36 the promoter must ensure that the competition is audited but is not allowed to use internal auditors.
Only independent accountants, registered auditors, attorneys or lawyers can monitor and certify the competition and report this through the promoter’s internal audit report or other appropriate validation and verification methods.
A full audit is not required, but an independent professional must check open competition in the law.
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Competition records must be kept
The company sponsoring the competition must keep full details of the promoter, the rules, the offer to participate and the name and identity number of the person responsible, as well as a complete list of all prizes, copies of all marketing materials for the competition and a list of all events during which the competition is marketed, including details of dates, the medium used and the place where marketing takes place.
In addition, the company must also keep a record of the name and identity number of the person responsible for selecting the winner, a list of all winners with their name and identity number, a list of the dates when the prize was handed over or paid to the winner. and acknowledge receipt of the prize signed by the winner, with the identity number and date and if the prize has been sent, proof of delivery.
The competition record must also include the steps taken if the winner cannot be contacted, why the winner did not accept or received the prize and what the promoter did to ensure that the winner received the prize.
A declaration by those running the competition that, at all times, none of the winners is a director, member, partner, employee, agent or consultant or any other person who directly or indirectly controls the promoter or is controlled by the promoter or marketing service provider. , or a spouse, life partner, business partner or immediate family member must also be kept.
The basis for determining the winner must be kept and include a summary describing the procedure for selecting the winner, including the name of the person who selected the winner, the date and place where the winner was selected and whether the event was open to the winner. public, as well as whether an independent person oversees the selection of winners and identity numbers and how winners are announced and how often.
The promoter must be able to provide all such information to the National Consumer Commission upon request.
Consumers should be aware of all the provisions of the CPA and complain when companies do not comply with the provisions provided to protect them.