Your rights when entering promotional competitions

We have all tried our luck at winning a car, a holiday or even airtime and data, through competitions held to promote a company or business.

Your consumer rights when you participate in any competitions are protected by the Consumer Protection Act (CPA), and this was specifically included because so many consumers complained about competitions, especially those held in the early 2000s by timeshare companies that called you to say you have won a prize, but then required you to attend a presentation to “win” a holiday although you never entered.

It is important to first look at how the CPA defines a promotional competition, participant, prize and promoter in section 36.

A promotional competition is any competition, game, scheme, arrangement, system, plan or device for distributing prizes by lot or chance, which is conducted in the ordinary course of business for promoting a producer, distributor, supplier or association, or the sale of goods and services, where any prize exceeds R1, irrespective of whether the consumer is required to show any skill or ability before winning the prize.

A participant is defined as a consumer who enters, competes in or is in any other way in line to win a promotional competition.

A prize could be a reward, gift, free goods or services, price reduction or special privilege, improvement of quantity or quality of goods and services or any other discounted or free item.

A promoter is the supplier who directly or indirectly promotes, sponsors, organises or conducts a promotional competition or for whose benefit a competition is promoted, sponsored, organised or conducted.

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The CPA covers these competitions

Section 36 stipulates that a promotional competition must be used to promote a supplier of specific goods and services in the ordinary course of business and the winner must be chosen by lot or by chance, such as a random draw. This means that the occasional raffle or lucky draw by a school or church is not a promotional competition and does not have to comply with these requirements.

These conditions to win are not allowed

Have you entered a competition where you had to pay to have your prize delivered, or where you had to buy something to qualify? Well, this is not allowed.

According to section 36, nobody is allowed to inform you that you won a prize if:

• There has been no competition
• You did not win
• You had to first meet a condition that was not disclosed beforehand
• You are required to pay or buy any other goods to get the prize
• You do not have a right to win the prize and
• If the prize was generally available or offered to all similar consumers or groups.

Section 36 also stipulates that companies cannot require you to pay for postage or the cost of sending the entry, and this includes paying for the opportunity to participate, access to the competition, or for a device to use to enter the competition.

You can also not be required to buy goods or services at a price that is higher than the normal price.

According to Regulation 11, SMS entries cannot cost more than R1.50 and you cannot be required to pay for further communication.

Illegal goods or services, such as child pornography or drugs, cannot be prizes either.

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Who can win?

Most competitions disqualify anybody who works for a company or their suppliers and their immediate family members.

Section 36 takes this further, by prohibiting companies from awarding a prize to anyone who is a director, member, partner, employee, agent of the promoter, consultant, somebody who is directly or indirectly by the promoter, or who is a supplier of goods and services in connection with the competition.

Competition rules

Section 36 requires companies to draw up competition rules before the beginning of a competition and make these rules available free of charge to the National Consumer Commission and any participant who asks for it.

In addition, companies must keep a copy of the rules for at least three years after the end of the competition.

It is sufficient to have the rules available on a website.

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Offering the opportunity to participate

When a company offers you the opportunity to participate in a promotional competition, the offer must clearly state what you can win if you enter, what you must do to accept the offer and participate, how the results of the competition will be determined, the closing date, how the results will be made known and the contact details of the person who can give you a copy of the competition rules and the date, time and place where you can claim the prize.

The organisers can include this information in the competition entry, an attached document or an advertisement published at the time and in the area in which the competition is held.

It must draw attention to, and must be clearly associated with the competition.

You have the right to participate in a competition as soon as you comply with the conditions and get entry to the medium to enter the competition.

You have the right to claim a prize as soon as the results of the competition are determined and you cannot then be subject to more conditions or payment for the prize.

Your rights as the winner

If you win, the company or its promoter cannot, according to section 36, force you to participate in any marketing and this includes using photographs of you.

You must get a chance to say no and that is why you will often see in competition rules that you will have to participate in marketing, such as having you picture used in promotions.

However, any promoter who includes this as a requirement in the rules will not be allowed to enforce it according to regulation 11.

Choosing the winner

According to section 36 the promoter must ensure that the competition is audited but is not allowed to use an internal auditor.

Only an independent accountant, registered auditor, attorney or advocate can oversee and certify the competition and report this through the promoters’ internal audit reporting or other suitable method of validation and verification.

A full audit is not required, but an independent professional must check the competition is run within the law.

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Records must be kept of the competition

The company sponsoring the competition must keep full details of the promoter, rules, offer to participate and the names and identity numbers of the people responsible, as well as a full list of all the prizes, copies of all the marketing material for the competition and a list of all instances when the competition was marketed, including details of the dates, the medium used and the places where marketing took place.

In addition, the company must also keep records of the names and identity numbers of the people responsible for choosing the winners, a list of all winners by name and identity number, a list of the dates when the prizes were handed over or paid to winners and acknowledgements of receipt of the prizes signed by the winners, with identity numbers and the date and if the prize was delivered, proof of delivery.

The records of the competition must also include the steps taken if a winner could not be contacted, why a winner did not receive or accept the prize and what the promoter did to ensure the winner received the prize.

Declarations by the people running the competition that as far as they know, none of the winners were directors, members, partners, employees, agents or consultants or other people who directly or indirectly control the promoter or are controlled by the promoter or marketing service providers, or their spouses, life partners, business partners or immediate family members must also be kept.

The basis on which the winners were determined must be kept and include a summary describing the procedure of choosing the winners, including the names of the people choosing the winners, the date and place where the winners were chosen and whether the event was open to the public, as well as whether an independent person supervised the choosing of the winners and his or her identity number and how the winners were announced and how often.

The promoter must be able to give all this information to the National Consumer Commission if it is requested.

It is up to consumers to know all the provisions of the CPA and complain when companies do not adhere to the provisions that were put there to protect them.