The National Consumer Tribunal (NCT) has slapped Vodacom with a R1 million administrative fine for its “unconscionable” conduct in imposing unreasonable penalties to consumers wanting out of their contracts.
According to the tribunal, it was discovered that the operator imposed terms and conditions that nullified the consumers’ right to cancel their fixed-term contracts between the period 2020 and 2022.
The investigation into Vodacom was initiated by the National Consumer Commission (NCC) following numerous complaints of alleged contravention of various sections of the Consumer Protection Act by the operator.
Customers alleged Vodacom had denied them the right to cancel their fixed-term contracts employing bullying tactics and imposing an exorbitant cancellation penalty of as much as 75%.
In addition to that Vodacom allegedly required customers to pay all outstanding fees and a cancellation penalty before the contracts were terminated on request.
In some cases, customers were said to have been coerced to sign the acceptance quotation letter, which was valid for 12 days, and to return the letter to Vodacom with proof of payment.
Acting National Consumer Commissioner Thezi Mabuza said the bulk of the complaints were reported during the peak of the Covid-19 pandemic when many complainants lost their jobs or had their salaries cut, making it impossible for them to proceed with the SIM Only contracts.
Mabuza explained that Vodacom failed to cancel consumers’ contracts timeously after having been notified by consumers and as required by the CPA.
In what was described as an “unconscionable conduct”, the tribunal reported that Vodacom continued to bill consumers even after they duly cancelled their contracts or attempted to do so, and after that referring consumers to debt collectors, blacklisting them with credit bureaus, or in the worst-case scenario going as far as threatening them with legal action.
Vodacom was as a result of the findings ordered to pay an administrative fine of R1m and given a warning that its conduct was unconscionable and prohibited.
“The commission welcomes this judgment as we believe that it is going to deter other suppliers and operators from engaging in the same conduct. We further see this as a victory for South African consumers who for the longest period were subjected to contracts that were in favour of the supplier,” she said.