On April 1st 2011, the South African government enacted the Consumer Protection Act. This sweeping piece of legislation provides the foundation to enforce one of the most stringent consumer protection and safety guidelines in the world. Key areas of the act have a strong influence on the call center business owner:

  • Implied Warranty: The act clearly states that an agent or representative of the company must implicitly warrant their communication with the customer. In effect, this creates the high probability of verbal contracts.
  • Misrepresentation: Any evidence of misrepresentation now carries an extremely high penalty. Misrepresentation can be highly controversial, as verbal contracts are now highly enforceable by the customer.
  • Proof of Purchase and Warranty Enforcement: A significantly lighter requirement of proof of purchase is now required. The consumer is given increased warrants and choices about warranty enforcement. Typically, it was up to the supplier to choose whether a defective item could be repaired, summarily replaced, or refunded.

These three major themes add additional challenges to the standard call center manager’s workload. Typically, the call center manager has the standard concerns about employee efficiency, script compliance, and maintaining customer satisfaction. However, now that any call center agent can, in effect, create a verbal agreement with the customer, the pressures now have significant legal and regulatory implications as well.


Typically, call centers only record calls that have a high propensity for dispute, or randomly record calls for quality monitoring purposes. The criteria for calls that have a high propensity for dispute is difficult to quantify. For example, an initial call into the call center might not be a contentious call, and only 3 months after does the matter become a matter of dispute or contention.

This forces the call center business owner to mandatorily record all calls to ensure compliance. This blanket recording style is similar to other areas that require regulatory recording such as European Union’s MiFID regulations or the United Kingdom’s Financial Services Authority regulations.


The challenges with this sort of regulation is it introduces new found burdens to the call center. The challenges are simple:

  1. a) Increased regulatory scrutiny promotes bureaucratic inefficiencies which may increase operational expenditures.
    b) The capital expenditures associated with blanket recording can be problematic.
    c) The costs associated with multi-site, remote agents could potentially increase.

Apart from these challenges, recording all of these calls can create “big brother” atmosphere, yields privacy concerns, all while seemingly not adding any business value.


With these challenges comes some new opportunities for the call center.

Introduce a Hosted, Cloud-Based Recording Service

Rather than implement the call recording solution in-house, leverage a private cloud-based recording service that offsets the capital and operational expenditures associated with such a platform. Multiple service providers and telecommunications operators offer a recording service that can be hosted in a private cloud. Such facilities can provide blanket call recording capabilities while requiring no on-site setup or capital expenditures.

Leverage Speech Analytic Solutions to Identify Problematic Trends

The same hosted call recording solutions also offer comprehensive speech analytics and audio mining features. These features enable the call center manager to highlight calls that have particularly contentious language or language that might be construed as misrepresentation. Furthermore, these capabilities enable the call center manager to establish key performance indicators for agent performance. For example, speech analytics capabilities can be setup to determine:

  1. a) The number of contentious calls that occurred in the call center during a week.
    b) Calls that led directly to a positive customer experience, such as a purchasing decision.
    c) Calls that are high risk calls that may require more regulatory scrutiny.

These key performance indicators establish a general company or department performance trend, which can turn call recording from being a ‘big brother’ surveillance tool to being an independent measure of overall organization performance.

Proactive vs. Reactive Regulatory Compliance

With speech analytics, agent desktop recording, and agent evaluation, the call center manager can now proactively implement rules associated with the new legislation instead of simply reacting to a customer complaint or dispute. This proactive measurement further enforces the organization’s position in the case of a formal dispute or contentious scenario. The benefits of having access to the voice of the customer can quickly outweigh the regulatory burden placed by new requirements such as the Consumer Protection Act.

Turning an Economic Detriment Into a Positive Opportunity

Combining these capabilities with other hosted recording features, such as agent evaluation, screen recording, and other capabilities means that the business can now capitalize on a hosted offering, gaining valuable insight into organizational performance, while lowering the capital expenditure requirements of implementation.

Typically, increased regulation can create onerous burdens on the business community. In this particular case, a wealth of organizational knowledge, behavior, and challenges can be quickly exposed, stored, and retained without significantly impacting the organization’s budget. The problem should not be viewed as just an organizational headache but as an opportunity for fundamentally improving the organizational capability and success.