Phone firms told to amend contracts
SOUTH Africa’s four primary cellular network operators and two fixed-line providers have told the National Consumer Commission they would have new customer contracts that were compliant with the Consumer Protection Act in place within the next three months, according to national consumer commissioner Mamodupi Mohlala.
This revelation comes as Mohlala prepares to sign consent order agreements this week with the chiefs of each of the companies. These agreements are legally binding and a fine of R1 million or 10 percent of annual turnover can be imposed if they are breached.
Mohlala said yesterday that over the past two weeks the commission had reviewed all contracts provided by the individual companies and none of the contracts were compliant with the act, 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.
Mohlala said in most cases about 75 percent of the cellphone contract terms and conditions would have to change. Cell C would have less work. It had already begun to align its contract with the act, she said.
Some of the changes to be made include:
n 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;
n The pricing of services, such as call rates, must be adequately explained;
n Consumers have the right to terminate their contract giving 20 days notice;
n Automatic renewal of contracts by companies is no longer legal;
n Contracts must specify a dispute resolution mechanism;
n Consumers are entitled to unused minutes for up to three years and no longer six months as the companies stated; and
n Consumers have a right to quality of service at all times.
Companies would have to change their billing systems, marketing approach and their consumer interface personnel would have to be educated and more skilled in the act, 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.
The Independent Communications Authority of SA is applying for the companies it regulates to be exempted from sections in the act.
Mohlala said Cell C, Telkom and 8.ta had said they would have their 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.