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National Credit ACT Ruling

On 10 December 2012, the Constitutional Court handed down a judgement dealing with the constitutionality of section 89(5)(c) of the National Credit Act (the Act). The section requires a court to order that where an unlawful credit agreement is brought before it, all the rights of the credit provider under that credit agreement to recover any money paid or goods delivered are either cancelled (unless the court concludes that doing so in the circumstances would unjustly enrich the customer); or to forfeit to the State, if the court concludes that cancelling those rights in the circumstances would unjustly enrich the consumer.

Therefore the consequences of a credit agreement being unlawful, as provided for section 89(5) are severe - a court must order that:

* the agreement is void;
* the credit provider refunds to the consumer any money paid by the consumer under that agreement, plus interest; and
* all credit providers rights under the agreement to recover money paid or goods delivered are either cancelled or forfeited to the State.
The constitutionality of the forfeiture provision was challenged in the matter of The National Credit Regulator vs Opperman and Others (CCT 34/12) (2012) ZACC 29.

The Constitutional Court confirmed the order of the Western Cape High Court which declared section 89(5)(c) of the Act constitutionally invalid as constituting an unlawful depravation of property which is therefore inconsistent with section 25(1) of the Constitution.

If you have any questions and/or queries, please don't hesitate to contact Simone Monty at (011) 775 6335 or

Proposed amendments to the Data Privacy Law

The Electronics Communication and Transactions Amendment Bill 2012 (ECT Amendment Bill) has been published. A general notice was published in the Government Gazette notifying people that the Minister of Communications intends to amend the Electronic Communications and Transactions Act (ECT Act).

If you are involved in direct marketing, the proposed amendments to section 45 are significant and extensive. The amendment states “No person may send unsolicited communications without the permission of the consumer to whom those unsolicited communications are to be sent or are in fact sent.” This means that all communications and marketing to consumers must be “opt in”. The proposed amendment introduces a fine of R1 million or imprisonment for a period of not exceeding 1 year in the event of a person who fails to comply with or contravenes this provision.

Despite this proposal, section 45 is going to be repealed by the Protection of Personal Information Act (POPI). So if POPI is enacted before this amendment, then section 45 will be repealed. If POPI is enacted after this amendment, then section 45 (as amended) will apply from the date it is amended until it is repealed by POPI.

We await the outcome of the public comment submitted on 7 December 2012. If you have any questions and/or queries, please don't hesitate to contact Simone Monty at (011) 775 6335 or email