In Your Corner

No more sneaky contract rollovers

Contracts: When expiry notifications are disguised as upgrade promos

04 December 2017 - 07:22
File photo.
File photo.
Image: Thinkstock

"No more sneaky contract rollovers!"

That was the intention of the Consumer Protection Act because so many consumers were unwittingly remaining committed to cellphone and gym contracts because they didn't read or remember the small-print terms and conditions which stated that if they did not cancel in writing - usually with a month's notice - before their contract expiry date, it would carry on month to month.

And so thousands of debit orders stayed active, but unnoticed by consumers, while the companies kept quiet and collected pure profit for undelivered services.

The act compels companies that offer fixed-term contracts to contact the consumer 40 to 80 business days before the contract's expiry date and notify them "in writing or any recordable form" of the imminent expiry of their contract, and spell out their options if they renew or wish to cancel.

But the sneakiness continues - as does ignorance of the need to cancel contracts in writing to prevent them from "rolling over".

When Lauren Holley of Durban tried to escape her Cell C contract at the end of October (its "expiry" date) she was told she had not given her month's notice in time, so she was committed for another month.

She asked the network why she had not been sent the expiry notification in advance.

Debit orders stayed
active while the
companies kept quiet
and collected profit for
undelivered services

In response she was sent a list of the "notifications" she received, starting with: "Great news, your Cell C contract is due for renewal next month! View the latest deals at one of our stores, or visit [our website]" and followed by 14 SMSes advertising "great" upgrade offers.

I put it to Cell C's head of communications, Karin Fourie, that being essentially promotional SMSs, neither the first one nor the others complied with the CPA's notification definition.

Responding, she said the network's notification was worded thus: "Hi, Your Cell C contract ends on [dd mm yyyy], after which it will run month to month. For the terms and conditions of your contract visit a Cell C store, call 084143 or go to www.cellc.co.za".

"We refer customers to the full T&Cs as we are limited in terms of characters in an SMS. This way they are also able to fully understand all implications and details of termination, renewal and/or allowing the contract to run month to month," she said.

Fourie did not respond to the question I raised about those Ts and Cs, which state that Cell C "may" send a notification notice about the impending expiry of a consumer's contract, when in fact it is compulsory by law.

But the acting Ombudsman for Consumer Goods and Services, Magauta Mphahlele, did have something to say about that.

"The use of the word 'may' implies that it is not obligatory for them to notify the consumer of the impending expiry date," she said. "This is not compliant with the [act] and should instead read 'Cell C will notify you'."

Asked whether directing a consumer to the company's website met Cell C's obligation to notify them of their options, Mphahlele said: "I would say not. The discretion that the supplier has is the manner in which to notify the consumer, which can either be in writing or any other recordable manner."

Dare one hope that Cell C will amend its notification process and contract terms to comply with the act in the interests of empowering its subscribers to make informed decisions about their contracts?

HOW DOES THE COMPETITION NOTIFY?

MTN sends subscribers this SMS: "Dear Valued Customer, your contract is due for renewal on [dd mm yyyy]. Get a brand new handset when you renew this contract in store. Alternatively, you can cancel by giving 20 working days' notice, failing which your contract will continue on a monthly basis."

Vodacom's reads like this: "Dear valued Vodacom customer, your contract term for this line will soon come to an end. Upgrade at your nearest Vodacom Shop or online at www.vodacom.co.za. If you do not wish to upgrade or cancel your contract yet, it will continue on a month to month basis from the end of the contract term."

MTN's notification is the most customer-friendly and legally compliant because it gives the most detail on how to cancel, which is the one thing the networks definitely don't want to encourage their subscribers to do.

CONTACT WENDY:
Email: consumer@knowler.co.za
Twitter: @wendyknowler

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