Debbie
Banned
Hey all,
I am lodging the following compliant. The issue was drawn to my attention by another forumite, so kudo's to him for briging this up.
I would like to ask people for comments and criticism. In a few days I will change what needs to be changed, and then, after the final version of this complaint has been posted here, I will ask anyone and everyone who agress with what's written here to please send me their details so that this complaint can be launched by a group of people (as opposed to just be individually - has more weight the more people who sign on to this).
I still have to familiarise myself with the functions and mandate of the Public Protector, so parts dealing with them are incomplete.
Telkom obviously makes hundreds of millions every year through their dodgy and abusive interest-charging policies, and the aim here is to get the regulatory bodies to take a stand against this.
Please comment, I really think we can make a difference in this matter.
Debbie2
(I have put this in announcements section, as I feel it is important enough. Please move to consumer section if you mods don't want it around here!).
INTRODUCTION
This complaint is being laid with: 1) The Independent Communications Authority of South Africa (ICASA); 2) The Public Protector; and 3) The Competition Commission. This complaint is made by the people listed below. The complaint concerns the manner in which Telkom charges interest on overdue accounts.
In summary, the complaint is that Telkom unfairly and possibly illegally forces customers to consent to highly unusual and unfavourable practices with regard to the way in which they charge interest on overdue accounts.
BODIES RECEIVING THIS COMPLAINT
The complaint is being launched with:
1. ICASA, since ICASA is the body responsible for and had a legal mandate, as contained in the ICASA Act and the Telecommunications Act of 1996 (as amended), to protect the public’s interest.
2. Competition Commission, since we contend that Telkom’s interest-charging policies constitute abuse of monopoly position and are therefore a matter for the Competition Commission to consider.
3. Public Protector, since it is the duty of the Public Protector to …..
COMPLAINT
When Telkom issues bills to customers, if the bill is not paid by the due date, then Telkom charges interest from the date that the bill was issued, and not from the date on which the bill became overdue.
So, for example, a bill may be issued on the 1st of the month, and subsequently posted to the customer. The due date for payment is set for the 21st of the month. If the customer pays the bill a day late, i.e. on the 22nd of the month, then the customer is charged interest for the period 1st – 22nd. Therefore, in this example, 21 days of interest are charged for, and not 1 day, even though the bill was paid only one day late. In fact, the customer would be charged interest covering the period when they had not even received their bill.
Additionally, if a customer requests an extension of a few days, Telkom tells the customer that the extension has been granted, but Telkom still charges interest. For example, a customer may have a bill issued on the 1st of the month with the due date set for the 21st of the month. The customer then requests an extension until the 24th of the month. Even though Telkom tells the customer the extension has been granted, and even if the customer pays on the 24th of the month, the customer will still be charged interest covering the period from the 1st of the month until the 24th of the month.
Furthermore, Telkom claims that they are charging “interest” for the days covering the period from which the bill was issued until the due date of the bill. When Telkom levies a charge that covers this specific time period, Telkom is, in fact, not charging interest at all. Interest is calculated on monies from the time at which any monies owed become due. In the time period between the date of issue of the account and the due date of the account, no money is in fact due by the customer to Telkom. The money only becomes due on the due date, following which interest may be levied. One cannot incur interest on monies that are not yet due. Therefore Telkom’s additional charges for the time period between the issue date and the due date (what Telkom claims is “interest”), is, in fact, a purely arbitrary penalty. Although Telkom calculates this money as “interest”, it is NOT interest.
The way in which Telkom charges interest, as described above, is written into Telkom’s Standard Terms and Conditions for the Provision of Public Switched Telecommunications Services. Section 6.1 (ix) says the following:
"Interest on overdue amounts: Any amount due by the Customer to Telkom not paid on or before the Due Date indicated on the account, shall bear interest at the Interest Rate, compounded monthly, calculated from the date of issue of the account until date of actual payment thereof."
JUSTIFICATION FOR THE COMPLAINT
In our opinion, Telkom’s interest-charging policy which they force upon all customers is atypical, unreasonable, abusive, and would not occur in a competitive environment.
Let it be made clear that we DO NOT contend that it is unreasonable for Telkom to charge interest. What we object to is the atypical and highly unusual practice of charging interest from the date the bill was issued and not from the date on which the bill became due and payable. It is our argument, therefore, that Telkom should be prohibited from charging interest for days which precede the due date of the bill. In the event that a bill is paid late, interest should only be charged from the date on which the bill became overdue.
The purpose of an independent regulator (i.e. ICASA), in the words of former ICASA Chairperson Mandla Langa, is to create regulatory conditions which “mimic a competitive environment”. Considering that Telkom’s interest-charging policies are virtually unknown in other (non-monopoly) sectors of South Africa’s economy, it is evident that the only reason Telkom is able enforce such abusive conditions on their customers is due to the monopoly environment in fixed-line telecommunications. ICASA therefore has a duty to take action to stop this practice by drafting appropriate regulations which:
(i) Ban Telkom’s current interest-charging practices;
(ii) Allow Telkom to charge interest only from the due date of the account;
(iii) Mimic the effect of a competitive environment;
and to put such regulations to the Minister of Communications for her approval.
The Competition Commission has a duty to investigate whether Telkom’s interest-charging policies constitute a violation of the Competition Act, and, if so, then to recommend a fine to the Competition Commission’s Tribunal.
The Public Protector has a duty to….
The way in which Telkom charges interest is clearly not standard corporate practice. Telkom’s policies are plainly exploitative of the under-empowered consumer, whose only recourse exists through the bodies to which this complaint is lodged. Customers have no choice but to consent to such provisions within Telkom’s Standard Terms and Conditions. Given that this is not standard practice in business, we fail to see an adequate justification why Telkom should be allowed to continue to force customers into accepting such iniquitous policies.
I am lodging the following compliant. The issue was drawn to my attention by another forumite, so kudo's to him for briging this up.
I would like to ask people for comments and criticism. In a few days I will change what needs to be changed, and then, after the final version of this complaint has been posted here, I will ask anyone and everyone who agress with what's written here to please send me their details so that this complaint can be launched by a group of people (as opposed to just be individually - has more weight the more people who sign on to this).
I still have to familiarise myself with the functions and mandate of the Public Protector, so parts dealing with them are incomplete.
Telkom obviously makes hundreds of millions every year through their dodgy and abusive interest-charging policies, and the aim here is to get the regulatory bodies to take a stand against this.
Please comment, I really think we can make a difference in this matter.
Debbie2
(I have put this in announcements section, as I feel it is important enough. Please move to consumer section if you mods don't want it around here!).
INTRODUCTION
This complaint is being laid with: 1) The Independent Communications Authority of South Africa (ICASA); 2) The Public Protector; and 3) The Competition Commission. This complaint is made by the people listed below. The complaint concerns the manner in which Telkom charges interest on overdue accounts.
In summary, the complaint is that Telkom unfairly and possibly illegally forces customers to consent to highly unusual and unfavourable practices with regard to the way in which they charge interest on overdue accounts.
BODIES RECEIVING THIS COMPLAINT
The complaint is being launched with:
1. ICASA, since ICASA is the body responsible for and had a legal mandate, as contained in the ICASA Act and the Telecommunications Act of 1996 (as amended), to protect the public’s interest.
2. Competition Commission, since we contend that Telkom’s interest-charging policies constitute abuse of monopoly position and are therefore a matter for the Competition Commission to consider.
3. Public Protector, since it is the duty of the Public Protector to …..
COMPLAINT
When Telkom issues bills to customers, if the bill is not paid by the due date, then Telkom charges interest from the date that the bill was issued, and not from the date on which the bill became overdue.
So, for example, a bill may be issued on the 1st of the month, and subsequently posted to the customer. The due date for payment is set for the 21st of the month. If the customer pays the bill a day late, i.e. on the 22nd of the month, then the customer is charged interest for the period 1st – 22nd. Therefore, in this example, 21 days of interest are charged for, and not 1 day, even though the bill was paid only one day late. In fact, the customer would be charged interest covering the period when they had not even received their bill.
Additionally, if a customer requests an extension of a few days, Telkom tells the customer that the extension has been granted, but Telkom still charges interest. For example, a customer may have a bill issued on the 1st of the month with the due date set for the 21st of the month. The customer then requests an extension until the 24th of the month. Even though Telkom tells the customer the extension has been granted, and even if the customer pays on the 24th of the month, the customer will still be charged interest covering the period from the 1st of the month until the 24th of the month.
Furthermore, Telkom claims that they are charging “interest” for the days covering the period from which the bill was issued until the due date of the bill. When Telkom levies a charge that covers this specific time period, Telkom is, in fact, not charging interest at all. Interest is calculated on monies from the time at which any monies owed become due. In the time period between the date of issue of the account and the due date of the account, no money is in fact due by the customer to Telkom. The money only becomes due on the due date, following which interest may be levied. One cannot incur interest on monies that are not yet due. Therefore Telkom’s additional charges for the time period between the issue date and the due date (what Telkom claims is “interest”), is, in fact, a purely arbitrary penalty. Although Telkom calculates this money as “interest”, it is NOT interest.
The way in which Telkom charges interest, as described above, is written into Telkom’s Standard Terms and Conditions for the Provision of Public Switched Telecommunications Services. Section 6.1 (ix) says the following:
"Interest on overdue amounts: Any amount due by the Customer to Telkom not paid on or before the Due Date indicated on the account, shall bear interest at the Interest Rate, compounded monthly, calculated from the date of issue of the account until date of actual payment thereof."
JUSTIFICATION FOR THE COMPLAINT
In our opinion, Telkom’s interest-charging policy which they force upon all customers is atypical, unreasonable, abusive, and would not occur in a competitive environment.
Let it be made clear that we DO NOT contend that it is unreasonable for Telkom to charge interest. What we object to is the atypical and highly unusual practice of charging interest from the date the bill was issued and not from the date on which the bill became due and payable. It is our argument, therefore, that Telkom should be prohibited from charging interest for days which precede the due date of the bill. In the event that a bill is paid late, interest should only be charged from the date on which the bill became overdue.
The purpose of an independent regulator (i.e. ICASA), in the words of former ICASA Chairperson Mandla Langa, is to create regulatory conditions which “mimic a competitive environment”. Considering that Telkom’s interest-charging policies are virtually unknown in other (non-monopoly) sectors of South Africa’s economy, it is evident that the only reason Telkom is able enforce such abusive conditions on their customers is due to the monopoly environment in fixed-line telecommunications. ICASA therefore has a duty to take action to stop this practice by drafting appropriate regulations which:
(i) Ban Telkom’s current interest-charging practices;
(ii) Allow Telkom to charge interest only from the due date of the account;
(iii) Mimic the effect of a competitive environment;
and to put such regulations to the Minister of Communications for her approval.
The Competition Commission has a duty to investigate whether Telkom’s interest-charging policies constitute a violation of the Competition Act, and, if so, then to recommend a fine to the Competition Commission’s Tribunal.
The Public Protector has a duty to….
The way in which Telkom charges interest is clearly not standard corporate practice. Telkom’s policies are plainly exploitative of the under-empowered consumer, whose only recourse exists through the bodies to which this complaint is lodged. Customers have no choice but to consent to such provisions within Telkom’s Standard Terms and Conditions. Given that this is not standard practice in business, we fail to see an adequate justification why Telkom should be allowed to continue to force customers into accepting such iniquitous policies.
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