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01 Aug 2011

Cellphone Companies Agree To Change Contracts To Align With CPA

Cellphone Contracts, Consumer Protection Act (CPA) 1 Comment

Staff Writer @ Lucid Living

Fantastic news for consumers, as the National Consumer Commission (NCC) takes cellphone companies to task, on non-compliance with the Consumer Protection Act (CPA).

South Africa’s four primary cellular network operators and two fixed-line providers will have new customer contracts that are compliant with the Consumer Protection Act in place within the next three months.

This came as NCC’s Mamodupi Mohlala prepared to sign consent order agreements this week with each of the cellphone companies. These agreements were legally binding and a fine of R1-million or 10 percent of annual turnover could be imposed if they were breached.

Mohlala said that over the past two weeks the NCC had reviewed all contracts provided by the individual cellphone companies and none of the contracts were compliant with the CPA. This, despite the fact that it had been in the pipeline for the past five years and its implementation was postponed from September last year to April this year.

She said that in most cases about 75 percent of the cellphone contract terms and conditions would have to change.

See our earlier article: Cellphone Contracts and the CPA, to understand how the CPA will impact on your cellphone contract.

Some of the changes to be made include:
  • Cellphone companies will have to prove the financial benefit for the consumer of a bundled service, for example a package including a handset, data and a laptop, compared with the individual purchase of those items, which means being explicit about the cost of each item;
  • The pricing of services, such as call rates, must be adequately explained;
  • Consumers have the right to terminate their contract giving 20 days notice;
  • Automatic renewal of cellphone contracts by companies is no longer legal;
  • Cellphone contracts must specify a dispute resolution mechanism;
  • Consumers are entitled to unused minutes for up to three years and no longer six months as the companies stated; and
  • Consumers have a right to quality of service at all times.

Cellphone companies would have to change their billing systems, marketing approach and their staff would have to be educated and more skilled, which would require more spending on human resources, she said.

“There is nothing untoward… we are aligning South Africa with international best practice.”

Mohlala said Cell C, Telkom and 8.ta would have their cellphone contracts amended by the end of September, Neotel by next month and MTN and Vodacom both expected to have amended their contracts by the end of October.

One Response to “Cellphone Companies Agree To Change Contracts To Align With CPA”

  1. edmund says:

    Hi

    I upgrade at Vodacom 23 December 2011. 3 Weeks after the upgrade the phone gave me problems self typing sms’s freezing up at any time. Book the phone in for software upgrade in less than 24 hr I received the phone back, that same day the phone gave me the same problems, book the phone back in for repairs and told them is not software related.Received the phone back after just more than a week and yes the same problem the phone is back with repairs for the 3rd time. Can I request a new phone or can I cancelled my contract?

    Thank you

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