By 
South African telecom giant Vodacom has been issued a 1 million Rand ($53,000) administrative fine by the National Consumer Tribunal for contravening the Consumer Protection Act (CPA) in the country. Acting Commissioner of the National Consumer Commission (NCC), Thezi Mabuza, revealed that Vodacom will also be required to refund certain contract cancellation fees to affected consumers.
Between 2020 and 2022, a multitude of consumers lodged complaints, alleging that Vodacom impeded their attempts to terminate fixed-term contracts by imposing a hefty 75% cancellation penalty.
The NCC investigated these claims, concluding that Vodacom’s actions were unethical as they imposed terms and conditions that infringed upon consumers’ rights to cancel their fixed-term contracts.
Mabuza stated, “During our engagement with them [Vodacom], they had agreed to repay some of the consumers that cancelled their contracts.”
It’s important to note that Vodacom’s fine does not absolve the company of its breach of the Consumer Protection Act. Mabuza added, “At this point, the only group we have information about are the consumers who lodged complaints. However, we are uncertain about how much this provision benefited Vodacom.”
The Acting Commissioner of the NCC emphasized that the outcome of the interaction with Vodacom should serve as an example to other suppliers, urging them to review their contracts and practices while upholding consumer rights and adhering to consumer protection laws.
A Vodacom spokesperson informed MyBroadband that they are currently reviewing the NCC’s decision, stating, “Vodacom notes the ruling of the National Consumer Tribunal. As of now, we are studying this determination and will, in due course, provide our views on the matter.”
Mobile network subscribers in South Africa have the option to terminate fixed-term contracts before their original end date, in compliance with the Consumer Protection Act (CPA). This process involves notifying the network operator at least 20 business days in advance, following which the operator may apply a “reasonable” cancellation fee.
Vodacom outlined its procedure, stating that “A quotation will be generated and sent to the customer. The quotation includes monthly subscription costs as well as device fees multiplied by the number of months remaining on their contract.”
A spokesperson from the mobile communication company added, “The customer will receive a standard 25% discount on their remaining subscription amount, in addition to the fees multiplied by the number of months remaining on their contract.”
It’s worth noting that different mobile network operators in South Africa have varying approaches to contract cancellations. For example, MTN charges customers one month’s subscription fee and the outstanding handset amount for non-SIM-only contracts, while Cell C’s cancellation fee includes the outstanding phone amount, the current month’s invoice, and 50% of the subscription fees for the remaining contract period. Telkom charges the outstanding handset amount and a fixed R809 cancellation fee.
In a separate matter, Vodacom Tanzania faced a lawsuit worth Sh10 billion (approximately $4 million) filed by Sayida Masanja, a businessman, who alleged that the telecom operator improperly shared his personal information with OpenAI’s ChatGPT without authorization. The lawsuit sought compensation for the breach of privacy facilitated by the telco.
Consumer Rights and Regulatory Bodies:
Consumer rights hold paramount importance in a marketplace driven by products and services. Regulatory bodies play a crucial role in safeguarding these rights, ensuring that companies adhere to the law and maintain ethical practices. Such bodies, like the NCC, are established by governments to enforce consumer protection laws and are responsible for policy oversight, investigation and enforcement, as well as consumer education.
In South Africa, the NCC is a pivotal regulatory body with a mission to protect and promote consumer interests. The NCC handles complaints and monitors company compliance with consumer protection laws.
While regulatory bodies are essential for protecting consumer rights, they do encounter challenges in fulfilling this role. Limited resources, rapidly evolving markets, and the need to ensure public awareness of consumer rights are among the obstacles they face.
Comments