Vodacom vs the Consumer (Protection Act) – We lose, four nil – for now!
Posted on July 7, 2011Vodacom and MTN continued their strong financial performance over the last year, and executives from these companies benefited from the higher profits, with the CEOs take home millions as revenues and profits increase in the telecommunications market. Vodacom’s annual report for the year ended 31 March 2011 reveals that CEO Pieter Uys received a total remuneration of R13,190,826 – up from R10,700,571 a year ago. (Article from Mybroadband).
So how are we, the consumer doing? Well, we have a new Consumer Protection Act (CPA) that came into effect from 1st April 2011 to help protect us in our interactions with the big boys who have the money (and lawyers) to make sure they get their way most of the time. Andrew Weeks’s article written back in October, “The Consumer Protection Act and the cellular industry Q&A“, gave me hope that things would change (link here).
Let’s see how things stack up.
Compensation for no service (or service interruption)?
Just a few days ago there was a major outage on the Vodacom network. Customers lost signal in parts of the country (from Cape Town to Johannesburg and inbetween) for most of the day. Many incensed customers let their dissatisfaction be known, thousand of posts appearing on Twitter all day. Pieter Uys, to his credit, ate humble pie and give his apologies on twitter, on Radio, in full page newspaper adverts and in other forums. The question then arose, will customers be compensated, and if so how.
National Consumer Commissioner Mamodupi Mohlala said that an apology from Vodacom is not good enough, and that Vodacom should refund their effected subscribers as laid out in the Consumer Protection Act (CPA). Mohlala told Radio 702 that if Vodacom’s subscribers can prove loss of income they can claim compensation from Vodacom through the CPA.
Update (25/7/2011) : 7 complaints were received by the Commissioner and forwarded through to Vodacom for comment. Nothing received back yet but this is still under investigation and could result in sanction. Details here @ iol.co.za. Good news indeed for the consumers.
Who's your daddy
Vodacom : No way
Vodacom spokesperson Richard Boorman said that Section 54 of the Consumer Protection Act does not make provision for a claim for damages such as loss of business or income.
“We will be responding directly to ICASA and the National Consumer Commission with respect to their inquiries on this topic,” said Boorman. (from Mybroadband)
Vodacom 1 Consumer 0
Three year validity of vouchers means I get to keep my minutes/data?
The Consumer protection act talks about vouchers being valid until they are used up or three years has passed (take a look at question 6). This is great for prepaid cell users, as now their airtime won’t expire anytime soon. You could buy a large voucher value and just use it over time. Even better for data users, buy yourself a big value data bundle and use it up as you need it. All sounds great?
It gets even better. A recent article (11 July 2011) on IT Week takes it one step further. Here the National Consumer Commissioner gives us really good news, bundled minutes and data on contracts should also not expire :
NCC commissioner Mamodupi Mohlala says unused data and free minutes bundled with contracts must carry over for three years and cannot expire any earlier. All data and minutes accumulated from April must roll over for a full 36 months, she says. Subscribers pay on a month-to-month basis and are protected under the law, notes Mohlala. Cellphone companies cut subscribers off if they do not pay their bill each month, so there is no reason why consumers cannot be afforded protection under the law. “We need a test case, but I believe every month as [subscribers] pay, their rights are being reactivated,” explains Mohlala. (IT Web, 11 July 2011)
That all sounds really great. SA Consumers are losing millions each month to the expiring minutes scam. Arthur Goldstuck is quoted in the IT Web article as saying SA’s almost 10 million contract subscribers lose “huge amounts” each month. If each person lost just R10 in airtime, that would be R100 million (or a billion rand in some people’s language) each month. I would certainly like to keep my minutes and data.
Who's your daddy
The cell phone companies : No way
In the IT web article they contacted each of the cell companies, call centres and spokes people. The answers were consistently the same. The rollover for both prepaid and contracts hasn’t changed. ICASA has applied for an exemption for certain aspects of the CPA and they won’t clarify until the exemption is passed.
Vodacom’s smart lawyers seemed to have found the best answer. Their chief officer of corporate affairs Portia Maurice explained to IT Web that the three-year expiry rule only applies to “vouchers” such as SIM cards, and not products purchased through the cards. She argued that Vodacom complies with the law because prepaid airtime vouchers last for three years. Very smart lawyers those ones. If people haven’t activated their vouchers in a few months, they probably never will, and then Vodacom get to whisk away that unused airtime on activated numbers the way they always did. Saved those millions of rands.
Let’s hope that Mohlala gets her test case sooner rather than later. In the meatime, chalk up another point for Vodacom.
Vodacom 2 Consumer 0
The Consumer protection act talks about a six month implied warranty, and that in the event of a product failure in the first six months, the consumer gets the choice of the three R’s :
- Replace
- Repair
- Refund
In late May 2011 I upgraded my contract and bought/selected/received a new HTC Desire. Ten days later the device was stone dead, a further two days had passed by the time I got to the Vodacare. The said they could book it in and it could 10-14 days to get it repaired. I objected, saying in terms of the CPA I should be allowed a replacement. The manager agreed but said only the store I bought the device at could do this. Went back to the store, long story short, manager said CPA doesn’t apply to him, he is only a franchise, I must go back to Vodacare. He refused to engage, and I eventually left (against my will) with the matter unresolved, leaving the phone in the store (against his will) having laid a complaint with Vodacom customer care (call placed in the store on 29th May).
The shiny new phone I don't have
More than six weeks later (13 July 2011), I still don’t have a phone (despite the store who sold it to me having stock). Vodacom refuse to investigate the manager’s behaviour (oh, it is his word against yours) and refuses to tell me why my rights in terms of CPA are being ignored. Vodacom are continuing along their path of doing a repair despite all my objections. I was getting semi-regular updates (a Vodacom representative calling or sms’ing me every few days). I then called the Consumer Commission, they said I must put the complaint in writing. When I mentioned this to the Vodacom rep, I stopped getting the updates. As a last resort, I tweeted @uyspj who got someone on it and we have a (mostly) satisfactory resolution. Read about it here.
I found a post on My Broadband which explained what the Vodacom Store and representative didn’t want to.
Who's your daddy
Replace or refund? Vodacom : No way
Vodacom has a very smart bunch of lawyers, and they found a way out. Vodacom doesn’t consider my acquisition of the handset a sale, and therefore in terms of the Consumer Protection Act, they don’t have to comply with the three R’s. They can just keep applying their old way of doing things. They can apply their out of box (OBF) failure policy and since I didn’t get the device back to them within seven days, they don’t have to replace it.
To quote from Vodacom’s communication to their Trade Partners : Warranties: Faulty goods for which the consumer have paid within six months after the purchase. Only goods paid for can be refunded. Handsets as part of a contract will be repaired or replaced at the discretion of Vodacare since the customer has not paid for the goods. More here (link).
Interesting, so us customers never pay for these handsets? we are “given” these handsets for nothing? Vodacom scores again.
Vodacom 3 Consumer 0
CPA allows me to cancel my contract and only pay a reasonable fee!
I have 3 contracts with Vodacom (just easier to keep the kids on the same account). With the extremely unsatisfactory service I received with my handset (as above), I decided that perhaps the CPA can help me at least cancel the contract (or some of them).
According to the draft of the CPA, a supplier could charge a maximum of 10% of the remaining payments as a “reasonable” cancellation fee. This was amended in the final CPA to just say a reasonable fee. That’s ok, I am a reasonable guy, let’s see what this reasonable fee is.
I called the Vodacom customer care. Need to call cancellations, during office hours. Tried again next day, took my details, need to wait 3-7 days (yes days) for them to manually work out the amount (the computer doesn’t do it for them). I received a partly legible fax (emailed to me) with the details. Interesting reading.
Who's your daddy
Reasonable cancellation fee? Vodacom : No Way
Vodacom did not differentiate between contracts taken out before the CPA came into effect and those after. Should they get some credit for that? I’m not sure.
The cost of cancelling each of the contracts is calculated as 75% of the total monthly payments remaining on the contract. That’s quite hectic, but it gets worse.
- Where a contract is on a discounted fee structure, for example, one of those Pay R99/month get a 120 Everyday off-peak minutes worth R135, the calculation is based on the R135, not the R99. 75% of R135 comes out at R101.25, that’s actually just a bit more than what I am paying. Interesting maths these Vodacom folk employ.
- A contract was renewed in late May 2011. The migration SMS received on 31 May said the package migration was successful. The quote dated 7/7/2011 reflected 25 months left to run on the 24 month contract. That is more interesting maths. If the migration was effective 1st June at least one month of the 24 should have expired? 23, 25, what’s a few months between friends.
It seems that since the CPA dropped the specific details of the reasonable cancellation fee (was 10% before) the Vodacom lawyers had a field day and found another loophole. Vodacom, of course, considers their previous cancellation fee to be reasonable. And since the regulations around the CPA have not yet been promulgated who can argue with them?
To quote from Vodacom’s communication to their Trade Partners : The Act currently prescribes “a reasonable cancellation fee”. This reasonable cancellation fee amount will be published in a Regulation and this Regulation is not yet final. Until such time as the Regulation is finalised, Vodacom will continue to charge “the reasonable cancellation fee” under the existing terms and conditions of the contract.
Of course there are two sides to every argument, but the big bully is only interested in their own. So they consider their huge cancellation fees reasonable and stuff the consumer. (more here link)
You can read some more consumer woes when trying to cancel contracts over at SAConsumerProtectionAct.com. There is a post where the consumer wanted to cancel, Vodacom wanted 100% of remaining contract fee, the NCC (ncc@thedti.gov.za )said Vodacom could charge a 25% penalty and the consumer should give the device back. Vodacom wouldn’t listen to the NCC and offered a 25% “discount” as per my example above.
Vodacom 4 Consumer 0
Conclusion
Unfortunately, it would seem that Vodacom and their lawyers have found ways to bypass much of the Consumer Protection Act. They have no interest in the spirit of the Act and giving a fair deal to the consumer. I suppose that might cost them too much and then they wouldn’t make the fat profits and be able to pay those executives the millions. In the meantime, us consumers must keep paying for service we don’t get, lose minutes + sms’s + data we have paid for, pay monthly contract fees for phones we don’t have, be unable to return defective products and be tied into contracts with no reasonable escape.
If anyone has had better luck in dealing with Vodacom (or any of the other cell providers) I would love to hear your story. Please leave us some comments.
I will be laying my formal written complaint with the Consumer Commission. I hope the National Consumer Commissioner, Mamodupi Mohlala, has a lot of energy, drive and tenacity. These big boys want to protect their millions at any cost, we need a champion on our side, and I really hope we have one. Such a pity that people can’t abide by the spirit of the law and have to fight it each step of the way. The power of oligopoly and the weakness of their regulator, ICASA is sad to see. Ms Commissioner, I am backing you all the way. Hope you can do the business for us.
Update : Today, 18th July, front page of the Business Report is a repot by Asha Speckman on further progress being made by Mamodupi Mohlala in taking on the phone companies. She is preparing to sign consent order agreements that forces the Cell companies to fix their non-compliant contracts. The article indicates it will at least cover cancellation periods, full disclosure of contract breakdown costs including device costs, retention of free minutes, dispute resolution and more. This is good news indeed. Will these “new” contracts have to be applied retrospectively from 1 April, I certainly hope so.
Further reading
Phone firms told to amend contracts Asha Speckman (18 July 2011)
- Our national consumer commissioner, Mamodupi Mohlala, has looked at the contracts the phone companies are still using and says they are not compliant at all. Cell C is closest but all need to fix them. This revelation comes as Mohlala prepares to sign consent order agreements this week with the chiefs of each of the companies. These agreements are legally binding and a fine of R1 million or 10 percent of annual turnover can be imposed if they are breached. You go girl!!
Getting what’s due in terms of the Consumer Protection Act Justin Williams (6 April 2011)
- I have links to the CPA and other documents in this article which describes experiences with TravelStart around international air travel tickets.
Confusion on consumer act coverage Wendy Knowler (20 June 2011)
- Wendy discusses the CPA and the application by ICASA to get clarity on certain responsibilities. What is interesting is the ICASA commissioner makes it clear that the intention is not to undermine the consumer’s rights but to deal with practical and technical matters. The cell companies seems to be hiding behind the application to avoid consumer rights. The article also covers early expiry of bundled / prepaid credit, as well as early cancellation.
Consumers cry for help Joseph Booysen (12 April 2011 )
- Within its first week of operation the NCC fielded more than 400 complaints, suggesting thousands more would pour in every year. The sectors that the commission will target are information and communications technology (ICT), manufacturing, retail and health care and pharmaceuticals. Commissioner Mamodupi Mohlala announced that in the first four days of operation, the commission received more than 400 complaints. Most were against the City of Johannesburg for its billing crisis, followed by complaints against cellular operators Vodacom, MTN and Cell C. This was with regard to ambiguity of contracts, pricing, faulty new handsets and dropped calls.
- Simon talks about changes from the draft to final CPA legislation, how they have been watered down especially in relation to the cancellation charges. In particular he ends with the warning, be careful of signing contracts, they are binding.
- Nicholas provides a general discussion of returns under the CPA, covering the four main reasons of 1. Direct marketing cool-off, 2. Goods not seen, 3. Goods not meet purpose and 4. Implied warranty. Also a short reminder of rights under ECT Act for goods bought online. No specific mention of cellular. Question posted to Nicholas, will update with reply if forthcoming.
Tags: cancel contract, Consumer Protection Act, CPA, faulty phone, lose data, lose minutes, lose sms, NCC, return phone, return product, Vodacom
Categories: Consumer Protection Act, Mobile, Pick On
Wow, it looks like the cellphone companies literally have the consumer by the balls. I guess the only way out is to completely boycott them altogether. Don’t renew any Vodacom contracts. EVER
14.11.2012 11:37
Hi there,
Can someone please tell me what the difference is between Vodacoms Contracts and the activation forms which actually hold the most important information. Is the activation form a legally binding document and if the details within were not explained, can its rules be inforced?
Ta
T
12.10.2012 14:22
In general, Vodacom’s customer service policy seems to be “Deny any wrong-doing and blame the customer “!
I have had endless headaches with Vodacom. I recently got a terrible shock when I was charged R600 for data usage in one day. The very same data that has always been covered by BIS on my Blackberry and is currently covered by BIS. For some reason, on the day in question, Vodacom decided to charge for the data usage at the premium rate of R2/Mb without any notification except to send me an sms the following day to tell me I had almost reached my R1000/month limit. Conveniently, the charges occured on the day that Vodacoms system was down and the BIS for the new month should have automatically been activated.
I have had no assistance from customer support or from their data services department. Their official response is that I used the data therefor I am responsible for the costs.
With 20 months left on my contract, I may as well just let it run its course but not use it at all.
If I ever see Pieter Uys in the street I shall moer him stukkend! Grrrrrrr!!!
12.07.2012 18:41
Sadly have to agree with you. Customer service doesn’t seem high on the agenda when something has gone wrong, it’s their way or their way.
14.07.2012 13:39
On the occasions I have had dealings with Customer Services via telephone, I have noticed that I only get asked to stay on the line to give my customer feedback if my problem has been resolved! With several calls getting no satisfaction at all, not once have they asked me to stay on the line to give my feedback!
Way to fudge the data in your favour, Vodacom.
15.07.2012 21:03
[…] 16 long years with Vodacom the time had come. After a number of battles (see here, here and here) trying to get them to respect me as their customer and comply with the Consumer […]
23.06.2012 11:45
I want to cancel my contract with Vodacom, but instead of the 10% stipulated in the CPA – they want to charge me 75% of the outstanding amount of the duration. I tried cancelling it by phoning the call centre 082 1958, that’s when I got the 75% news. I tried emailing the Complaints department at Vodacom, complaints@vodacom.co.za, but got a response that it is an incorrect email address. Could anyone help with the contact number when trying to lodge a complaint?
18.05.2012 14:00
Hi Juan
Sadly the story goes something like this. Draft CPA had a 10% limited for the cancellation penalty, big guys complained, it was changed to “reasonable fee”.
Vodacom has always charged the 75% so of course they claim it’s reasonable. They also claim they got the consumer commissioner to agree with them on this. I have never seen it anywhere other than from Vodacom that this is the case.
It gets worse. If you are on a discounted contract, say down from R100 per month to R60, then the will give you your discount off the R100 which comes out at R75, so you pay more than sticking out the contract.
Sucks really. Wish I knew the truth, did Vodacom lie or did the Consumer Commissioner sell us out?
Either way, the consumer continues to lose.
Justin
18.05.2012 16:59
all my contracts were softlocked because 1 data account ,went up to R8000.My average is about R650 /month.reason: the mandatory call limit of R2000 was cancelled by vodacom after 7 months (small print) and we we are paying O O B rates.I never received sms or call from vodacom ,only after i was softlocked at R8000 I phoned Vodacom to find out whats going on,and got told that my account is higher than usual ! after numerous calls data dept said my sim Or router has a virus.case closed.
16.04.2012 09:36
vodacom is a bunch of cheapskates, heres my experience with them; got a blackberry 8900 curve in september 2010. phone was lovely until about 3 weeks ago when my keypad broke. i went to vodacare and the very friendly punk checked and said my phone is still under warantee for 6 months. booked it in and received some sms’ with reference numbers and what not, they said it will take 21-30 working days before ive got my phone back. reluctantly i waited. i then enquired whether i can upgrade early by paying the reasonable fees as i am upgrading on 05/06/2011 and in so doing settling the contract. the response, after checking my profile on the commputer, was the following: “sorry sir, but your avarage cost per month is below R800 per month so we cannot do it”. i didnt really know what to say, how do you argue with that? so i got a “new” blackberry 8900 curve back again after about 5days, new, although the big sticker in the back reads ‘refurbished’. anyway, turned on the phone and after the first phone call i got i ralised that the phone is deaff, nobody can hear me on the other end of the line. whats more, the phone has some cancerous dead pixel blodge in the right top corner of the screen, an if thats not enough the y button gets stuck and repeats ‘yyyyyyyyyyy’ the moment the keypad gets unlocked. took it back today to vodacare and as the same punk booked in this refurbished phone he said that its no longer under warantee. after a reasonable arguement he manually selects warantee on the computer and books it in. i then approached a sales manager, who, eventhough is in the same store no further than 2meters from vodacares counter, says that they have nothing to do with vodacare, but what can he do for me. i then explain how this phone keeps breaking and again i enquire to settle the contract and his response threw me off my horse. he says to me “sorry but according to the consumer act we must respect the contract and the act so we cannot settle and upgrade early” i asked him ‘what if my monthly fee is over R800 per month?’ all of a suddern the consumer act falls out the window and he says “ok lets take a look, im sure we can organise something” and so i wasnt very nice to him and left. so can somebody please explain to me how the hell this act works one moment and in a blink of an eye stops? are they being full of Sh** or am i missing something?
14.04.2012 16:58
I cannot see how Vodacom can say that they have not “sold” you the handset as it is “free”. The handset is provided to you based on you signing a 24 month contract. If I walked into Vodacom and said I wanted a handset without the 24 month contract they would laugh me out of the shop. So on that basis the handset is not “free”. The other issue is they are providing you with a service which is also covered in the CPA so either way they need to comply. If you actually read their own T&C’s my opinon on their lawyers being “smart” I beg to differ. On entering their Customer care centre I was given their T&C’s (I had an issue with my Iphone) and was told that the iphone would be replaced in non-commercial packaging. I asked what this meant and they said a refurbished iphone. NO, replaced with non-commercial packaging means the phone will be REPLACED i.e not repaired or by definition replaced with someone elses repair but REPLACED and provided to me in plain packaging i.e. not in an Iphone box. The T&C’s also say it will be done in 7 days so I said I shall return next week same time. NO he means 7 working days, but their T&C’s say 7 days with no caveat so in my book it is 7 calender days. If I do not have any satisfaction I will garner a number of individuals with similiar experiances and legally challenge as then there can be no arguments and a possible huge dent in both the firms credability and financials.
08.01.2012 16:06
Gus, please don’t ready anything written there as being agreement by myself with what Vodacom are saying. I currently have a CPA dispute lodged with the commissioner against Vodacom (NCC/08/11/WILLIAMS/07400). This was forwarded by the commissioner to Vodacom on the 6th September 2011 and Vodacom had until the 15th September to reply. In the 4 months since then Vodacom have not contacted me on this matter and have ignored the commissioner’s instruction. When I tried to make contact with Vodacom on the matter I was told the people who dealt with this “are on leave” and would contact me, which of course they never did.
I will keep pushing the matter and encourage you to do the same. I do become a little disillusioned when Vodacom just carry on doing as they please and even ignore the commissioner.
On a more positive note, I did see someone lodge a complaint on Hello Peter where they had a faulty device outside of Vodacom’s policy windows for replacement and after complaining and making a fuss Vodacom did replace the handset. As to whether it was a new or refurbished device I have no idea.
08.01.2012 18:38
I have lodged a complaint againts Eskom. Eskom now wants cut me of. Is the supplier allowed to take action while the complaint is sitting with the cpa.
24.11.2011 07:12
I am no lawyer, however, I have seen nothing which says that your conflict is suspended until the consumer commissioner deals with it. So while they could be in hot water if they discontinued your service because you complained to the commissioner, they could disconnect you for non payment of your account. Just my view.
24.11.2011 16:56
I sent an email to the national consumer commissioner with a brief description of my complaints, asking how I send in a complaint. This email was used to log a complaint against Vodacom and they have a few days left to respond. Most interesting. I do think the NCC jumped the gun a bit, but hey, my first CPA complaint is now official and Vodacom must respond. I don’t expect a lot in the response given the brevity of the complaint and the lack of detail, but perhaps it will open a dialogue to get some answers. Will keep you all posted.
06.09.2011 22:51
Hi Justin, have you had any further feedback regarding Vodacom’s exorbitant 75% canclleation fees on a contract. I don’t see how this is a reasonable fee in compliance with the CPA.
10.01.2013 15:25
Hi Kim
After a very long fight with Vodacom (over 6 months) and them missing the consumer commissioner deadlines etc then eventually came back with a contract. They let me cancel one contract a month early, one about 9 months early, and one I had to let run for the last 3 months.
I haven’t had any dealings with Vodacom since, and on principle won’t, so am not sure if they still try and apply the crazy penalties. Sadly the big vendors have more money and resources then the consumer commissioner so we still lose.
Please tell us more about what Vodacom have been telling you.
Justin
10.01.2013 21:43
Nice summary of the current state of things. It’s really shocking to see how the mobile operators operate. Another interesting topic that keeps rearing its ugly head is how much credit Vodacom recklessly extends to its clients, especially on data. See this recent post on MBB for a 50k bill: http://mybroadband.co.za/vb/showthread.php/359118-Un-authorized-downloads-on-hacked-sim-R50k-bill
25.08.2011 12:47
Vodacom just told us after 7 weeks of trying to get any service from them after my BlackBerry was stolen and illegal downloads done to the tune of R7000 that they don’t have any good will towards us and we have to pay up! Great! I feel no good will towards you either, so I’m going to try and cancel our THREE contracts with them.
26.07.2011 09:57
Try send a message to @uyspj on Twitter. Pieter listens and tries to resolve issues. As much as I am aggrieved by many of Vodacom’s practices, it is good to have access to the man at the top.
26.07.2011 12:04
I would like to get the address, e-mail address and phone numbers of Ms. Mamodupi Mohlala the Commissioner as I would like to lodge a complaint about my cell phone contract that was cancelled by the Cell phone company and I am currently on ITC. Thank you very much hoping for her quick and prompt intervention. Yours Truly Jongi Mdaka
22.07.2011 07:28
Hi Bishop
The Commissioner can be contacted at :
Commissioner : Ms Mamodupi Mohlala
Share Call Number: 0860 266 786
Fax: 0861 515 259
E-mail: ncc@thedti.gov.za
Goodluck, I hope you get your complaint dealt with. Let us know how it goes.
Regards
Justin
22.07.2011 18:38
[…] you were following my previous post : Vodacom vs the Consumer (Protection Act) – We lose, four nil – for now well, I guess this makes it a good solid Vodacom Five – Consumer […]
18.07.2011 16:34
[…] a device/service that is not fit for purpose. Goodluck. Read my previous post on Cellular and CPA here. Share […]
15.07.2011 23:16
I have had difficulties with Vodacom for years and I really thought that the CPA would come to my aid. I have also seen the Vodacom trade communication and the general attitude that they take is “business as usual”. One such example is that in relation to defective products, Vodacom appears to believe that they get to decide whether to repair, replace or refund. This is quite obviously WRONG. I am going to try cancel my contract and hand back the phone. Let’s see how this goes and I will give you some feedback.
14.07.2011 16:06
I agree with you. I hope that as more and more people try and enforce their rights, and share their experiences the Commissioner will get more ammunition to force Vodacom and the other cell providers to do the right thing. I look forward to hearing about your progress and wish you less frustration than I have been having.
14.07.2011 16:45