GARDEN ROUTE | KAROO NEWS - The National Consumer Tribunal (NCT) imposed an administrative fine of R1m against Vodacom for conduct that was "unconscionable by imposing terms and conditions that negated consumers' right to cancel their fixed-term contracts".

This is according to an 18 October statement by the National Consumer Commission (NCC). 

The NCC said between the 2020/21 and 2021/22 financial years, the commission received and investigated numerous complaints of alleged contravention of various sections of the Consumer Protection Act (CPA) by Vodacom.

The Acting National Consumer Commissioner, Thezi Mabuza, said the commission's investigation revealed that Vodacom had contravened Section 14 of the CPA [when] read with Regulation 5. 

"The NCC received the bulk of these complaints during the peak of Covid-19 when many complainants lost their jobs or their salaries were cut, making it impossible for them to proceed with the sim-only contracts."

According to Mabuza, section 14 (3) (b) (i) provides that the supplier may impose a reasonable cancellation penalty with respect to any goods or services supplied to the consumer, 

Regulation 5 (2) lists the relevant considerations in deciding on a reasonable cancellation penalty, and Regulation 5 (3) of the CPA states that a supplier may not impose a cancellation penalty that has the effect of negating the consumer's right to cancel. 

"Vodacom's imposition of a 75% cancellation penalty constituted a contravention of this section."

She said Vodacom failed to cancel consumers' contracts timeously after having been notified by them and as required by the CPA, thus contravening Section 14 (2) (b) (i) (bb). "The refusal to cancel the contracts on the basis that any cancellation is subject to payment of a cancellation fee before the cancellation can be effected, constituted a contravention of section 14 (2) (b)."

She said Vodacom also failed to cancel consumers' contracts within 20 business days of consumers' notice of cancellation. Instead, the supplier sent consumers quotation letters with a cancellation penalty of 75%, contravening section 14 (3) of the Act.

"Vodacom unconscionably imposed an unreasonable cancellation penalty of 75%, negating consumers from cancelling the contracts. Moreover, Vodacom required payment of all outstanding fees and the cancellation penalty before contracts were terminated on request, exacerbating the consumers' financial well-being at that time. This conduct is not in the spirit of the promotion of the CPA.

"The tribunal also found that Vodacom's conduct is unconscionable in that Vodacom continued to bill consumers after they duly cancelled their contracts or attempted to do so, and by referring such consumers to debt collectors, blacklisting them with credit bureaus, and threatening them with legal action.

By repeatedly denying consumers the right to cancel the contracts, Vodacom contravened section 40 (1) (b) and (d) of the Act," said Mabuza.

She said Section 14 (2) (c) provides that, in the case of a fixed-term consumer agreement, the supplier must inform the consumer in writing or other recordable form not more than 80 nor less than 40 business days before the expiry of the contract of the impending expiry date, including any material changes that would apply if the agreement is to be renewed or may otherwise continue beyond the expiry date and the options available to the consumer.

Vodacom's failure to inform consumers that their contracts were about to expire and to advise them of their options contravened section 14 (2) (c).

Vodacom did not respond to George Herald's request for comment on the statement, however, Engineering News reports that the company's spokesperson has said that Vodacom is studying the determination and will, in due course, give its views on the matter.

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