ConsumerChampion
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Hi All,
The below is purely my opinion and does not constitute legal or financial advice. I am sorry about the long post but I hope there will be some benefit coming out of it.
With Cell C, Vodacom and MTN increasing their prices mid-contract it has caused consumers to wonder if it is legal. While I am not a lawyer I do believe that it is technically legal as each contract has a clause that allows the provider to change prices as they feel the need.
The question is does this contravene the Consumer Protection Act. Based on my research and interpretation of the act I am lead to believe that they might not have fulfilled their requirements as stipulated by the CPA.
As consumers our only real recourse in this matter is to:
1) Not renew our contracts (This is a longer term action)
2) Cancel the current contract (Best case they will let you cancel without penalties but they will still charge you a pro-rata device fee which may be a good few thousand rand depending on how far you are into the contract)
3) Lay a formal complaint with the Consumer Commission (Immediate action)
I would like to discuss option 3. Below is my complaint drafted to submit to the Consumer Commission. You are more than welcome to use any part of it if you wish to lay your own complaint. It costs nothing except some time to complete the form and draft the complaint. I feel if enough people submit complaints it will apply pressure to the unscrupulous tactics of these cellular providers. It is the only cost effective recourse anyone has at present that may have an impact.
At least after submitting a complaint you will know that there was nothing more you could have done and if the ruling goes in favour of the cellular providers then so be it, however, let's not make life easy for them.
The complaint form can be downloaded here:
http://www.nccsa.org.za/images/pdf/NCCComplaintFormDOCcomplainform2012.doc
It should be filled out and mailed here:
[email protected]
The Complaint
I signed two 24 month contracts with [MOBILE PROVIDER] for R269.00 and R469.00 per month.
On [Date] [MOBILE PROVIDER] changed the price of the contracts to R279.00 and R479.00 per month respectively, to be paid for the rest of the duration of the contract. This amount was never agreed, was not the advertised price nor was it stated up front before signing the agreement.
I attempted to seek redress directly with [MOBILE PROVIDER], however, they would not consider any of my two redress options. I stated that they were in contravention of the CPA to which they replied they were not. I stated I would be laying a formal consumer complaint asking for the maximum penalty to which they said I am welcome to do so.
While [MOBILE PROVIDER] offered to cancel the Agreement with no penalties they insisted I pay the pro-rata amount
As the above options were both declined I am left with no choice but to lodge a formal complaint. I am therefore going to draw on sections within the CPA to provide evidence of how [MOBILE PROVIDER] contravened the CPA.
I will begin with [MOBILE PROVIDER]’s defense which is [SECTION NUMBER] of their Subscriber Agreement which reads “[ENTER CLAUSE]”
While it states [MOBILE PROVIDER] have the right to change their Tariff Plans it is in contravention of section 49:
1. Any notice to consumers or provision of a consumer agreement that purports to—
(a) limit in any way the risk or liability of the supplier or any other person;
(b) constitute an assumption of risk or liability by the consumer;
(c) impose an obligation on the consumer to indemnify the supplier or any other person for any cause;
(d) be an acknowledgement of any fact by the consumer,
must be drawn to the attention of the consumer in a manner and form that satisfies the
formal requirements of subsections (3) to (5).
2. In addition to subsection (1), if a provision or notice concerns any activity or
facility that is subject to any risk—
(a) of an unusual character or nature;
(b) the presence of which the consumer could not reasonably be expected to be
aware or notice, or which an ordinarily alert consumer could not reasonably be
expected to notice or contemplate in the circumstances; or
(c) that could result in serious injury or death,
the supplier must specifically draw the fact, nature and potential effect of that risk to the
attention of the consumer in a manner and form that satisfies the requirements of
subsections (3) to (5), and the consumer must have assented to that provision or notice
by signing or initialling the provision or otherwise acting in a manner consistent with
acknowledgement of the notice, awareness of the risk and acceptance of the provision.
3. A provision, condition or notice contemplated in subsection (1) or (2) must be
written in plain language, as described in section 22.
4. The fact, nature and effect of the provision or notice contemplated in subsection
must be drawn to the attention of the consumer—
(a) in a conspicuous manner and form that is likely to attract the attention of an
ordinarily alert consumer, having regard to the circumstances; and
(b) before the earlier of the time at which the consumer—
i. enters into the transaction or agreement, begins to engage in the activity,
or enters or gains access to the facility; or
ii. is required or expected to offer consideration for the transaction or
agreement.
5. The consumer must be given an adequate opportunity in the circumstances to
receive and comprehend the provision or notice as contemplated in subsection (1).
[MOBILE PROVIDER] place this provision inconspicuously under [ENTER SECTION] [ENTER MAIN SECTION HEADING] which forms part of their [ENTER TOTAL NUMBER OF PAGES], [ENTER NUMBER OF SECTIONS] Subscriber Agreement as to remove any liability of cost from themselves for the duration of the contract and place those costs onto the consumer. The provision is unusual given that an ordinary consumer would not expect that an advertised and upfront agreed amount for 24 months would change. In fact this is the first instance that I have experienced a contract price increase mid-contract.
I would consider myself a reasonably alert consumer and I do not feel it was reasonable for me to notice or contemplate that provision under the circumstances. One contract was concluded in store and the other telephonically. I certainly do not feel an ordinary consumer would be reasonably expected to be aware or notice this provision.
I do not deny that I signed the agreement, however, the relevant clause was never specifically drawn to my attention. If the agent had told me that at any point during the 24 month contract [MOBILE PROVIDER] has the right to increase my monthly payment I would never have signed the contract. I think therein lies the whole reason why [MOBILE PROVIDER] does not draw attention to the provision.
As per section 22 (2):
For the purposes of this Act, a notice, document or visual representation is in plain
language if it is reasonable to conclude that an ordinary consumer of the class of persons
for whom the notice, document or visual representation is intended, with average
literacy skills and minimal experience as a consumer of the relevant goods or services,
could be expected to understand the content, significance and import of the notice,
document or visual representation without undue effort, having regard to—
It is highly unlikely a consumer with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance and import of the notice, document or visual representation without undue effort. They certainly could not deduce the significance of possibly paying more on an advertised upfront price.
The provision was not shown to me, the consumer, in a conspicuous manner that was likely to draw my attention to it. As the provision was never drawn to my attention I never had an opportunity to adequately receive and comprehend the provision as contemplated in section 48 (5). As stated previously had I known the significance of this provision I would not have signed the contract and therefore would not have taken the device.
Moving on to section 23 Subsection 6 to 10:
6. Subject to subsections (7) to (10), a supplier must not require a consumer to pay
a price for any goods or services—
(a) higher than the displayed price for those goods or services; or
(b) if more than one price is concurrently displayed, higher than the lower or
lowest of the prices so displayed.
7. Subsection (6) does not apply in respect of the price of any goods or services if the
price of those goods or services is determined by or in terms of any public regulation.
8. If a price that was once displayed has been fully covered and obscured by a second
displayed price, that second price must be regarded as the displayed price.
9. If a price as displayed contains an inadvertent and obvious error, the supplier is not
bound by it after—
(a) correcting the error in the displayed price; and
(b) taking reasonable steps in the circumstances to inform consumers to whom the
erroneous price may have been displayed of the error and the correct price.
10. A supplier is not bound by a price displayed in relationship to any goods or
services if an unauthorised person has altered, defaced, covered, removed or obscured
the price displayed or authorised by the supplier.
This section is very clear. The supplier must not require a consumer to pay any price higher than the displayed price for goods or services. The price per month for the 24 month period was advertised, agreed and signed. Besides any other sections in the CPA this section is all that is required to prove that [MOBILE PROVIDER] is in contravention of the CPA by forcing consumers to pay more than the advertised price.
{CONTINUED}
The below is purely my opinion and does not constitute legal or financial advice. I am sorry about the long post but I hope there will be some benefit coming out of it.
With Cell C, Vodacom and MTN increasing their prices mid-contract it has caused consumers to wonder if it is legal. While I am not a lawyer I do believe that it is technically legal as each contract has a clause that allows the provider to change prices as they feel the need.
The question is does this contravene the Consumer Protection Act. Based on my research and interpretation of the act I am lead to believe that they might not have fulfilled their requirements as stipulated by the CPA.
As consumers our only real recourse in this matter is to:
1) Not renew our contracts (This is a longer term action)
2) Cancel the current contract (Best case they will let you cancel without penalties but they will still charge you a pro-rata device fee which may be a good few thousand rand depending on how far you are into the contract)
3) Lay a formal complaint with the Consumer Commission (Immediate action)
I would like to discuss option 3. Below is my complaint drafted to submit to the Consumer Commission. You are more than welcome to use any part of it if you wish to lay your own complaint. It costs nothing except some time to complete the form and draft the complaint. I feel if enough people submit complaints it will apply pressure to the unscrupulous tactics of these cellular providers. It is the only cost effective recourse anyone has at present that may have an impact.
At least after submitting a complaint you will know that there was nothing more you could have done and if the ruling goes in favour of the cellular providers then so be it, however, let's not make life easy for them.
The complaint form can be downloaded here:
http://www.nccsa.org.za/images/pdf/NCCComplaintFormDOCcomplainform2012.doc
It should be filled out and mailed here:
[email protected]
The Complaint
I signed two 24 month contracts with [MOBILE PROVIDER] for R269.00 and R469.00 per month.
On [Date] [MOBILE PROVIDER] changed the price of the contracts to R279.00 and R479.00 per month respectively, to be paid for the rest of the duration of the contract. This amount was never agreed, was not the advertised price nor was it stated up front before signing the agreement.
I attempted to seek redress directly with [MOBILE PROVIDER], however, they would not consider any of my two redress options. I stated that they were in contravention of the CPA to which they replied they were not. I stated I would be laying a formal consumer complaint asking for the maximum penalty to which they said I am welcome to do so.
While [MOBILE PROVIDER] offered to cancel the Agreement with no penalties they insisted I pay the pro-rata amount
As the above options were both declined I am left with no choice but to lodge a formal complaint. I am therefore going to draw on sections within the CPA to provide evidence of how [MOBILE PROVIDER] contravened the CPA.
I will begin with [MOBILE PROVIDER]’s defense which is [SECTION NUMBER] of their Subscriber Agreement which reads “[ENTER CLAUSE]”
While it states [MOBILE PROVIDER] have the right to change their Tariff Plans it is in contravention of section 49:
1. Any notice to consumers or provision of a consumer agreement that purports to—
(a) limit in any way the risk or liability of the supplier or any other person;
(b) constitute an assumption of risk or liability by the consumer;
(c) impose an obligation on the consumer to indemnify the supplier or any other person for any cause;
(d) be an acknowledgement of any fact by the consumer,
must be drawn to the attention of the consumer in a manner and form that satisfies the
formal requirements of subsections (3) to (5).
2. In addition to subsection (1), if a provision or notice concerns any activity or
facility that is subject to any risk—
(a) of an unusual character or nature;
(b) the presence of which the consumer could not reasonably be expected to be
aware or notice, or which an ordinarily alert consumer could not reasonably be
expected to notice or contemplate in the circumstances; or
(c) that could result in serious injury or death,
the supplier must specifically draw the fact, nature and potential effect of that risk to the
attention of the consumer in a manner and form that satisfies the requirements of
subsections (3) to (5), and the consumer must have assented to that provision or notice
by signing or initialling the provision or otherwise acting in a manner consistent with
acknowledgement of the notice, awareness of the risk and acceptance of the provision.
3. A provision, condition or notice contemplated in subsection (1) or (2) must be
written in plain language, as described in section 22.
4. The fact, nature and effect of the provision or notice contemplated in subsection
must be drawn to the attention of the consumer—
(a) in a conspicuous manner and form that is likely to attract the attention of an
ordinarily alert consumer, having regard to the circumstances; and
(b) before the earlier of the time at which the consumer—
i. enters into the transaction or agreement, begins to engage in the activity,
or enters or gains access to the facility; or
ii. is required or expected to offer consideration for the transaction or
agreement.
5. The consumer must be given an adequate opportunity in the circumstances to
receive and comprehend the provision or notice as contemplated in subsection (1).
[MOBILE PROVIDER] place this provision inconspicuously under [ENTER SECTION] [ENTER MAIN SECTION HEADING] which forms part of their [ENTER TOTAL NUMBER OF PAGES], [ENTER NUMBER OF SECTIONS] Subscriber Agreement as to remove any liability of cost from themselves for the duration of the contract and place those costs onto the consumer. The provision is unusual given that an ordinary consumer would not expect that an advertised and upfront agreed amount for 24 months would change. In fact this is the first instance that I have experienced a contract price increase mid-contract.
I would consider myself a reasonably alert consumer and I do not feel it was reasonable for me to notice or contemplate that provision under the circumstances. One contract was concluded in store and the other telephonically. I certainly do not feel an ordinary consumer would be reasonably expected to be aware or notice this provision.
I do not deny that I signed the agreement, however, the relevant clause was never specifically drawn to my attention. If the agent had told me that at any point during the 24 month contract [MOBILE PROVIDER] has the right to increase my monthly payment I would never have signed the contract. I think therein lies the whole reason why [MOBILE PROVIDER] does not draw attention to the provision.
As per section 22 (2):
For the purposes of this Act, a notice, document or visual representation is in plain
language if it is reasonable to conclude that an ordinary consumer of the class of persons
for whom the notice, document or visual representation is intended, with average
literacy skills and minimal experience as a consumer of the relevant goods or services,
could be expected to understand the content, significance and import of the notice,
document or visual representation without undue effort, having regard to—
It is highly unlikely a consumer with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance and import of the notice, document or visual representation without undue effort. They certainly could not deduce the significance of possibly paying more on an advertised upfront price.
The provision was not shown to me, the consumer, in a conspicuous manner that was likely to draw my attention to it. As the provision was never drawn to my attention I never had an opportunity to adequately receive and comprehend the provision as contemplated in section 48 (5). As stated previously had I known the significance of this provision I would not have signed the contract and therefore would not have taken the device.
Moving on to section 23 Subsection 6 to 10:
6. Subject to subsections (7) to (10), a supplier must not require a consumer to pay
a price for any goods or services—
(a) higher than the displayed price for those goods or services; or
(b) if more than one price is concurrently displayed, higher than the lower or
lowest of the prices so displayed.
7. Subsection (6) does not apply in respect of the price of any goods or services if the
price of those goods or services is determined by or in terms of any public regulation.
8. If a price that was once displayed has been fully covered and obscured by a second
displayed price, that second price must be regarded as the displayed price.
9. If a price as displayed contains an inadvertent and obvious error, the supplier is not
bound by it after—
(a) correcting the error in the displayed price; and
(b) taking reasonable steps in the circumstances to inform consumers to whom the
erroneous price may have been displayed of the error and the correct price.
10. A supplier is not bound by a price displayed in relationship to any goods or
services if an unauthorised person has altered, defaced, covered, removed or obscured
the price displayed or authorised by the supplier.
This section is very clear. The supplier must not require a consumer to pay any price higher than the displayed price for goods or services. The price per month for the 24 month period was advertised, agreed and signed. Besides any other sections in the CPA this section is all that is required to prove that [MOBILE PROVIDER] is in contravention of the CPA by forcing consumers to pay more than the advertised price.
{CONTINUED}
