A law unto themselves?

14 April 2015 - 02:04 By Wendy Knowler

Cell C must be chortling at the howls of outrage over Vodacom's announcement of tariff increases from next month on new and existing contracts. That network did the same thing in February, with comparatively little reaction - no doubt partly because it cleverly announced the move in late December, when most people were on holiday.But those who did complain said the very things Vodacom subscribers are saying now: "We had a deal, how dare you change the terms when I can't?"And that's the real injustice, of course. For many Vodacom subscribers, myself included, the increase is as little as R10 a month and won't upset the household budget.But the point is that we're bound by the contract we signed to pay a set amount for a set number of months. We don't get to unilaterally decide to pay a cent less each month because our financial circumstances have changed.We'd be in breach of contract and Vodacom would suspendour service, hand us over for collection and "blacklist" our credit records.Just as Cell C did, Vodacom responded to the "how is this legal?" question by quoting a clause from its contracts.Cell C's contract says the network "has the option of changing any of the charges from time to time", and Vodacom puts it like this: "The charges levied by Vodacom may vary from time to time."And lest MTN is starting to look saintly, its contract states: "MTN may change any charges."In the interests of transparency, the main large-print section of the networks' contracts should state that the subscriber will pay, for example, R249 a month for 24 months "unless we decide to increase the amount during this period", or words to that effect.Admittedly, Vodacom hadn't done it for more than a decade, which is compounding the shock and outrage. We're used to those numbers on the contract being binding for 24 months.As they should be.The Consumer Protection Act (CPA) was meant to put an end to such power imbalances.So how have the networks got away with this?Curiously, Vodacom appears to be of the view that it's legal simply because it put that clause in its contract.But what about the CPA's Regulation 44, which says that "a term of a consumer agreement . is presumed to be unfair if it has the purpose or effect of allowing the supplier to increase the price agreed with the consumer when the agreement was concluded without giving the consumer the right to terminate the agreement"?Infuriatingly, the legislators didn't see fit to add "without penalty", but, arguably, that's implied.Vodacom spokesman Richard Boorman's response was simply that "this provision only applies to contracts where the supplier has not reserved the right to vary its charges during the contract term, so it has no bearing in this instance".Huh?Yes, disgruntled subscribers can cancel their agreements in protest, but not without paying what's still owing on their phones, plus what the CPA calls a "reasonable" penalty, so that's hardly viable.At first Boorman insisted there was no "punitive" element to the cancellation fee.But faced with several In Your Corner cases which said otherwise - including that of Barry Washington, who was quoted a large cancellation fee despite the fact his contract does not include a phone - Boorman conceded that subscribers would still be charged for most of the remaining months of their contract, despite not using the service."The fee is arrived at by working out the handset costs and adding to that the remaining months, multiplied by the monthly subscription, and a 25% discount is applied to that," he said.So, to my mind, the consumer does not really "have the right" to terminate the agreement as a response to the tariff being unilaterally hiked, not if that right comes at a cost which includes a penalty.For now, Vodacom isn't commenting, except to say that "there is an investigation under way by the National Consumer Commission" and "it's prudent to let that process take place rather than debate individual points of law".National Consumer Commissioner Ebrahim Mohamed said an investigation was not under way yet."We are prone to investigate, but awaiting information due in the next two weeks before making a decision."He said if the various pieces of legislation applying to cellphone contracts were in conflict, that had to be resolvedWatch this space.E-mail: consumer@knowler.co.zaTwitter: wendy@knowler..

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