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No opt-out registry this year

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 12 Jul 2012

Infighting between the National Consumer Commission (NCC) and its parent body, the Department of Trade and Industry (DTI), over alleged financial mismanagement, means there will not be an opt-out database to protect consumers from unwanted spam this year.

The NCC needs about R5 million to develop an opt-out registry, which will allow consumers to preemptively block unwanted communications from companies.

However, there is currently a dispute between commissioner Mamodupi Mohlala-Mulaudzi and the department over the money needed for the registry. Because of the lack of funding, about half of the provisions in the Consumer Protection Act (CPA), that deal with direct marketing, cannot be enforced.

Spam accounts for as much as 90% of all e-mails and, while SMS spam is less - due to the cost involved - unwanted messages are more intrusive. The CPA became law last April and provides for a national opt-out registry.

Ready and waiting

Trade and industry spokesman Sidwell Medupe says funding is available for the database, but Mohlala-Mulaudzi has not requested it. Mohlala-Mulaudzi denies this, saying the database was included in the NCC's requested budget, but was not granted.

Medupe says DTI advised the commissioner in writing, on 14 February, that R9 million was available for projects. He says the department told the NCC it needed to prioritise the projects according to this available funding.

Mohlala-Mulaudzi was also told the procurement process for priority projects could go ahead, but service providers should only be informed once the DTI was satisfied that all relevant procurement processes have been complied with, says Medupe.

So far, the funds have not been requested and are available for the registry, says Medupe. He says Mohlala-Mulaudzi has not submitted an application breaking down the cost of the database.

Nonsense

However, Mohlala-Mulaudzi, whose contract expires on 3 September, argues that funding was requested when the NCC submitted its budget.

Mohlala-Mulaudzi says the unit requested about R134 million in total for the year, including the R5 million for the registry. However, the NCC was granted R100 million less, and its budget only covers operational expenses such as rent, salaries, security and cleaning services.

DTI placed the NCC under administration about five months ago and has taken over all payments to creditors on a month-to-month basis, says Mohlala-Mulaudzi. The department did this based on the auditor-general's third quarter high-level audit, which did not justify such intervention, she says.

Consumers are suffering in the middle of all this, notes Mohlala-Mulaudzi. She has lodged a complaint with the Public Protector over the DTI's abuse of power and its handling of the NCC's finances in an inappropriate manner, she adds. “There will be no opt-out register this year.”

Last July, the NCC said the Direct Marketing Association of SA (DMASA), an umbrella body that looks after the interests of the entire sector, was the preferred entity to run the database.

However, in September, the commission said it was considering running the registry in-house, after people objected to the DMASA providing the service because of potential conflicts of interest.

Medupe argues that the NCC does not have the proper financial systems in place to make sure that it adheres to the requirements of the Public Finance Management Act. He says it was agreed that the department would pay out the NCC on a monthly basis, based on its projected expenses.

Medupe says the auditor-general's report raised serious concerns around financial management at the NCC and the DTI had no choice but to intervene. He says the department is not interfering.

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