24 May 2011

Cell-Phone Companies Attract Attention of Consumer Commission

Cellphone Contracts, Consumer Protection Act (CPA) 4 Comments

Adv Kate Thambiran @ Lucid Living

In a previous article we looked at the implications of the Consumer Protection Act (CPA) on Cell Phone contracts (see: Cell Phone Contracts and the CPA). Recent statistics released by the National Consumer Commission (NCC), attest to the fact that consumers have been quick to exercise their newly bestowed rights, by lodging a barrage of complaints against cell phone companies.  

Almost 90% of the country’s population is covered by mobile telephony networks. With an estimated 39 million subscribers, South Africa is one of the fastest-growing mobile markets in the world. The success of the cell phone industry is South Africa is undeniable.

South African consumers have a strong demand and affection for cell phones, but only disdain for their service providers. This contempt for the industry is not unfounded, considering, in comparison to the US and European markets, costs remain high and grumbles about cellular and landline services have become a national pastime.

Not surprisingly the bulk of the more than 2000 complaints the NCC has received in the first three weeks is against telephone companies. These range from unfair contract agreements, pricing and billing objections to poor customer care.

This makes the ICT sector an ideal target for the new NCC created out of the CPA.

Mamodupi Mohlala, head of the NCC insists that every complaint will be investigated, and is determined to press ahead with a probe of the ICT sector, even though it could spark a court battle with Icasa.

But Icasa is now applying to have the sector exempt , arguing that it already has a complaints unit to protect consumers from unfair business practices by companies under its jurisdiction. Consumers would argue that the complaints unit and Icasa as a whole, have failed the consumer.

The act allows regulatory institutions to apply for an industry wide exemption from one or more provisions on the grounds that there is an overlap. But Mohlala, a former Icasa councillor for several years, is clear that “we have the final say” on consumer protection issues.

But how this battle with Icasa plays out has deeper significance, as it will show just how much muscle Mohlala has and set the template for how the commission works with other oversight authorities. It will be an important test case for the NCC and is likely to be the first of many as the commission elbows its way into the SA business landscape.

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4 Responses to “Cell-Phone Companies Attract Attention of Consumer Commission”

  1. Anesh Muganpersad says:

    Good day, im writing a complaint against Mtn. I have recently taken out a My 200 Top up, when taken out the contract mtn advertised free unlimited download for 6 months from nokia ovi store an unlimited navigation. How ever when we access this websites mtn bill us for it. The concerning matter in this regards, when the phone was advertised this was no where mentioned or refelected in the phamplet.

    I have spoken to mtn call centre on the 22 June 2011, i was told that the charges will stand, and there is nothing mtn can do abt it.

    Mtn as a cell provider should notify their customers about these charges when they are trying to sell these contracts to their customers they should tell customer abt these cost. Afterall i only taken the contract for these features.

    I feel so cheated and mislead by mtn.

  2. RandolphLucid says:

    Good day

    It appears as though your complaint relates to false / misleading advertising.
    If the contract was indeed advertised, as including (at no additional cost) browsing and downloads, then MTN cannot bill additional fees for these services.
    The CPA deals with advertising / advertising practices and protects consumers from false / misleading advertising.
    You also have the right (under the CPA) to terminate the contract, with 20 days written notice to MTN. Unlike before, you are not bound for 24 months, if you are unsatisfied with the service. Certain penalty fees will apply – but they will be significantly less than that incurred on a 24 month contract.

    It appears as though MTN are not amenable to assisting you – you should consider using the services of our attorneys. Negotiations tend to have a better outcome, when you have a experienced attorney on your side. Have a look at the legal service we offer http://www.lucidliving.co.za/lucid-legal-advisor/signup_A/choice.htm

  3. Twanette says:

    I would really like to compliment you on your website. Absolutely briliant.

    Could you possibly help me with the contact details for the NCC? I would like to contact them about the exorbitant amount Vodacom wants to charge me to cancel my contract 7 months prior to expiry. If I understand what I ‘ve read correctly, there is nothing in the CPA which prevents them (Vodacom) from doing so, but I am immigrating iow I want to find out, if as a consumer, I do not have the right to cancel my contract with a reasonable fee. They want to charge me more than what I would pay just to let to contract go on until it expires. That seems ridiculous and unfair to me. I just do not know how to go about this.

    thanks so much.

  4. RandolphLucid says:

    Good day

    In my opinion the cellular service providers is not acting in accordance with the CPA. The early cancellation penalty cannont be more that if the contract were allowed to run its course – that position defeats the very objective of your right to early cancellation.

    Depending on the cellular provider’s position on whether or not the CPA applies to your contract (im assuming you entered into the contract prior to April 2011 – based on the expiry date) – you will are entitled under the CPA to early cancellation and the penalty fee must be “reasoonable”.

    In my opinion, what they are proposing is not “reasonable”.

    You can contact the NCC on the details below:

    National Consumer Commission [NCC]
    Share Call Number: 0860 266 786
    Fax: 0861 515 259
    Email: ncc@thedti.gov.za

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