MTN SMS competition under fire

MTN recently launched an SMS competition to celebrate its 15 year anniversary.  “The competition is skills-based and requires participants to answer multiple choice questions testing their general knowledge,” MTN said. 

The competition started on 30 April and will run over 15 weeks to finish on 9 September. The grand prize winner will receive a House Bond Account from FNB valued at R1-million. There are daily prizes ranging from ringtones and CallerTunez and a Toyota Fortuner to be given away every Sunday for the next 14 weeks.

Last year Vodacom received a great deal of negative press because of its “100 cars in 100 days” competition where entrants could win 100 new BMW 320i cars.  Many consumers racked up cellphone bills totaling thousands and even tens of thousands of rands, sparking an outcry from some quarters.

Vodacom was eventually ordered to stop this competition by the National Lotteries Board who declared it an illegal lottery.  “The board is satisfied that it has done its duty in policing and stopping the illegal lottery,” the National Lotteries Board said in a statement.

MTN made it clear that their competition complies with the Lottery Act.  “As MTN is a responsible corporate citizen, it has ensured that the skills-based competition is fully compliant with the Lottery Act. Each SMS will cost the subscriber R7.50, but MTN will send users regular updates to ensure that they are aware of how much they have spent on the competition. These updates are sent every 100 SMSs with a 500 SMS maximum allowed per user per day.”

Consumer complaints

Many consumers have complained about the competition.  The complaints focussed strongly on the high cost per SMS, and many complainants indicated that desperate people may enter the competition multiple times and through this spend a great deal of money without getting anything in return.

100 SMSs will cost R 750 which, for many South Africans, is a great deal of money.  The maximum daily amount of 500 SMSs, equating to a maximum cost of R 3 750 per day and over R 100 000 per month, has also drawn sharp criticism.  MTN however indemnifies itself against overspending by stating in its terms and conditions that it “is not responsible for entrants overspending by sending too many SMS entries.”

According to one consumer the cost of entering the MTN SMS competition is exorbitant.  “This is a money making scheme, why must MTN pay for the prizes when the consumer can pay via profits MTN makes off the SMS’s sent,” he said.

“It’s just disgusting – encouraging desperate people to send dozens of R7.50 SMSs to accumulate points for prizes. Only the person with the most points wins the prize. In these tough economic times, desperate people are going to try their luck, spending R100’s and won’t win,” said another irate consumer.

Many consumers may also be unaware that by entering the competition they give their consent to receive various marketing and advertising promotions relating to the competition.  Another condition of the competition, which may not go down well with consumers, is that MTN can cancel the competition without notice.

“For any reason whatsoever and at any time before the final points allocation takes place, the Promoters shall have the right to terminate the competition without notice of such termination. In such event, all participants hereby waive any rights that they may have against the Promoters and hereby acknowledge that they will have no recourse or claim of any nature whatsoever against the Promoters, their directors, members, partners, employees, sponsors, agents or consultants.”

MTN defended the cost per SMS, saying that “the cost per SMS of R7.50 is considered by MTN to be a fair denomination based solely on the value of the prizes on offer.”  MTN also highlighted that the competition is skills-based and complies with the Lottery act.

MTN SMS competition – good or bad?