Bill shock and credit limits in South Africa

An unexpected cellphone bill of tens of thousands of Rands is one of those surprises everyone can do without.
Bill shock is not a new concern, and customer complaints about receiving astronomical bills without warning have been numerous.
Data charges while roaming overseas is a common contributor to high bills, but users have also reported getting steep accounts for other reasons.
Among the reasons for bill shock is out-of-bundle (OOB) usage, where a service provider doesn’t cut you off when you’ve reached the limits of your package, but charges you per unit of usage. Some MyBroadband forum members affectionately refer to this phenomenon as the “OOB shark.”
If one argues that cellphone contracts and other per-use telecoms services are just like any other line of credit, it raises the question of whether it is legal for operators and services providers to effectively give subscribers unlimited credit.
National Credit Act on credit limits

Pria Chetty, associate director, PricewaterhouseCoopers
Pria Chetty, a top IT lawyer from PricewaterhouseCoopers, explained that the key legislation for this issue is the National Credit Act (NCA) and that nothing in the act prescribes a credit limit service.
However, the NCA does place restrictions on increasing credit limits that may be in place.
“Seen in this light, the consumer of the service would need to actively select service options that correspond with their spending. Consumers would need to self impose curbs on spending through for instance, pre-paid options,” Chetty said.
8ta, Virgin Mobile, and Vodacom previously told MyBroadband how their customers can monitor and/or limit their spend. Out of South Africa’s five mobile network operators, only 8ta and Virgin Mobile indicated that they allow subscribers to set credit limits.
What about the Consumer Protection Act?
Chetty said that another important legal inquiry is the extent to which the discontinuation of the service is a material change to the terms and conditions of the consumer’s contract – an issue that is governed by the Consumer Protection Act (CPA).
“In this case, the service provider would need to make sure that the changes are communicated in line with the provisions of the CPA,” Chetty said.
She added that if the withdrawal of the service impacted the quality of the service offered by the provider, the CPA provides remedies for consumers.
“The socio-economic impact of the unilateral discontinuation of such services will need to be reviewed at a later date. If need be, legislators will need to evaluate current consumer welfare controls and identify whether there is a critical gap in the balance of power between the service providers and consumers,” Chetty said.