Cell C must be chortling at the howls of outrage over Vodacom’s announcement to increase tariffs from next month on both new and existing contracts.
That network did exactly the same thing in February, with barely any reaction, by comparison – no doubt partly because they cleverly announced the move in late December.
But those who did complain, said the very things Vodacom subscribers are saying now: “We had a deal – how dare you change the terms when I can’t?”
And that’s the real injustice, of course.
For many Vodacom subscribers, myself included, the increase is as little as R10 a month and won’t upset the monthly budget.
But the point is that we’re bound by the contract we signed, to pay a set amount for a set number of months: we don’t get to unilaterally decide to pay a cent less per month because our financial circumstances have changed.
We’d be in breach of contract, and Vodacom would suspend our service, hand us over for collection and “blacklist” our credit records.
Like Cell C did, Vodacom responded to the “how is this legal?” question by quoting a clause from their contracts.
Cell’s says the network “has the option of changing any of the charges from time to time”, and Vodacom puts it like this: “The charges levied by Vodacom may vary from time to time…”
And lest MTN is starting to look saintly, its contact states: “MTN may change any charges…”
Of course, in the interests of transparency, the main, large print section of their contracts should state that the subscriber will pay, for example, R249 per month for 24 months “unless we decide to increase the amount during this period”, or words to that effect.
Admittedly, Vodacom hadn’t done it for more than a decade, which is compounding the shock and outrage.
We’re used to those numbers on the contract being binding for 24 months.
As they should be.
The Consumer Protection Act was intended to put an end to such power imbalances.
So how have the networks got away with doing this?
Well, curiously, Vodacom appears to be of the view that it’s legal simply because they put that clause in their contract.
But what about the CPA’s regulation 44, which says that “a term of a consumer agreement…is presumed to be unfair if it has the purpose or effect of “allowing the supplier to increase the price agreed with the consumer when the agreement was concluded without giving the consumer the right to terminate the agreement”.
Infuriatingly, the legislators didn’t see fit to add “without penalty”, but arguably, that’s implied.
Vodacom spokesman Richard Boorman’s response was simply that “this provision only applies to contracts where the supplier has not reserved the right to vary its charges during the contract term, so it has no bearing in this instance.”
Huh?
Yes, disgruntled subscribers can cancel their agreements in protest, but not without paying what’s still owing on their phones, plus what the CPA calls a “reasonable” penalty, so that’s hardly a viable option.
At first Boorman insisted that was no “punitive” element to the cancellation fee.
But faced with several In Your Corner cases which said otherwise – including that of Barry Washington who was told he had been quoted a large cancellation fee despite the fact that his contract doesn’t include a phone – he conceded that subscribers would still be responsible for most of the remaining months of their contract, despite not using the service.
“The fee is arrived at by working out the handset costs, and adding to that the remaining months, multiplied by the monthly subscription, and a 25% discount is applied to that,” he said.
So to my mind, the consumer does not really “have the right” to terminate the agreement as a response to the tariff being unilaterally hiked, not if that right comes at a cost which includes a penalty.
For now, Vodacom isn’t commenting, except to say that “there is an investigation underway by the National Consumer Commission and it’s prudent to let that process take place rather than debate individual points of law”.
National Consumer Commissioner Ebrahim Mohamed said an investigation wasn’t underway yet.
“We are prone to investigate, but awaiting information due in the next two weeks, before making a decision,” he said.
If the various pieces of legislation applying to cellphone contracts were in conflict, he said, that had to be resolved
Watch this space.
CONTACT: E-mail: consumer@knowler.co.za or Twitter: wendy@knowler
Contract rights skewed
That network did exactly the same thing in February, with barely any reaction, by comparison – no doubt partly because they cleverly announced the move in late December.
But those who did complain, said the very things Vodacom subscribers are saying now: “We had a deal – how dare you change the terms when I can’t?”
And that’s the real injustice, of course.
For many Vodacom subscribers, myself included, the increase is as little as R10 a month and won’t upset the monthly budget.
But the point is that we’re bound by the contract we signed, to pay a set amount for a set number of months: we don’t get to unilaterally decide to pay a cent less per month because our financial circumstances have changed.
We’d be in breach of contract, and Vodacom would suspend our service, hand us over for collection and “blacklist” our credit records.
Like Cell C did, Vodacom responded to the “how is this legal?” question by quoting a clause from their contracts.
Cell’s says the network “has the option of changing any of the charges from time to time”, and Vodacom puts it like this: “The charges levied by Vodacom may vary from time to time…”
And lest MTN is starting to look saintly, its contact states: “MTN may change any charges…”
Of course, in the interests of transparency, the main, large print section of their contracts should state that the subscriber will pay, for example, R249 per month for 24 months “unless we decide to increase the amount during this period”, or words to that effect.
Admittedly, Vodacom hadn’t done it for more than a decade, which is compounding the shock and outrage.
We’re used to those numbers on the contract being binding for 24 months.
As they should be.
The Consumer Protection Act was intended to put an end to such power imbalances.
So how have the networks got away with doing this?
Well, curiously, Vodacom appears to be of the view that it’s legal simply because they put that clause in their contract.
But what about the CPA’s regulation 44, which says that “a term of a consumer agreement…is presumed to be unfair if it has the purpose or effect of “allowing the supplier to increase the price agreed with the consumer when the agreement was concluded without giving the consumer the right to terminate the agreement”.
Infuriatingly, the legislators didn’t see fit to add “without penalty”, but arguably, that’s implied.
Vodacom spokesman Richard Boorman’s response was simply that “this provision only applies to contracts where the supplier has not reserved the right to vary its charges during the contract term, so it has no bearing in this instance.”
Huh?
Yes, disgruntled subscribers can cancel their agreements in protest, but not without paying what’s still owing on their phones, plus what the CPA calls a “reasonable” penalty, so that’s hardly a viable option.
At first Boorman insisted that was no “punitive” element to the cancellation fee.
But faced with several In Your Corner cases which said otherwise – including that of Barry Washington who was told he had been quoted a large cancellation fee despite the fact that his contract doesn’t include a phone – he conceded that subscribers would still be responsible for most of the remaining months of their contract, despite not using the service.
“The fee is arrived at by working out the handset costs, and adding to that the remaining months, multiplied by the monthly subscription, and a 25% discount is applied to that,” he said.
So to my mind, the consumer does not really “have the right” to terminate the agreement as a response to the tariff being unilaterally hiked, not if that right comes at a cost which includes a penalty.
For now, Vodacom isn’t commenting, except to say that “there is an investigation underway by the National Consumer Commission and it’s prudent to let that process take place rather than debate individual points of law”.
National Consumer Commissioner Ebrahim Mohamed said an investigation wasn’t underway yet.
“We are prone to investigate, but awaiting information due in the next two weeks, before making a decision,” he said.
If the various pieces of legislation applying to cellphone contracts were in conflict, he said, that had to be resolved
Watch this space.
CONTACT: E-mail: consumer@knowler.co.za or Twitter: wendy@knowler
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