The City of Johannesburg faces an administrative fine of R15 million, as it failed to comply with 65 compliance notices issued by the National Consumer Commission (NCC) in a bid to get outstanding billing issues sorted out.
The commission is preparing additional notices to force it to resolve yet more outstanding problems with bills.
So far, the NCC has received 450 complaints from residents and has successfully forced the city to refund a consumer R7 million after it could not explain how it arrived at a grossly inflated bill.
About 65 000 of the city's 1.3 million account-holders had problems with their bills after Johannesburg migrated its disparate legacy platforms onto a SAP system. The project, codenamed Phakama, was implemented between November 2009 and July last year at an estimated cost of about R1 billion.
However, issues with post-implementation resulted in complaints from thousands of residents about grossly inflated bills, inaccurate meter readings, illegal disconnections and a lack of service from the city's call centre.
The commission put the city on notice to deal with the problems, after fed-up consumers lodged complaints about issues with its billing system. Johannesburg has claimed to have resolved all outstanding billing issues, saying only a handful of bills are queried each month.
No finality
However, despite the city's claims, the NCC alone has received about 450 complaints from residents who have been unable to get problems with their bills sorted out by the city, and turned to it in desperation.
The NCC was established in April after the Consumer Protection Act (CPA) came into effect. Under the CPA, the NCC has the power to handle complaints, force companies to sort out issues, and refer unresolved matters to the tribunal for adjudication.
In total, about 6 000 complaints have been lodged with the commission, of which around 1 000 have been resolved. Most of the complaints, 2 189, were levelled at the retail sector, followed by the motor industry at 1 221, while 1 120 complaints were lodged against mobile and telecom firms.
However, the commission cannot quantify how many complaints relating to the City of Johannesburg have been resolved. Commissioner Mamodupi Mohlala says it is difficult to work out how many complaints have been sorted out because, in some instances, the city tells the NCC problems have been resolved, but the consumer says this is not the case.
In a bid to sort out outstanding issues, the commission has issued the city with 65 compliance notices. It was given until 9 September to resolve 11 issues, and until last Thursday to sort out the rest, but failed to do so, says Mohlala.
Because of its failure to comply with the notices, the commission will take the matter up with the National Consumer Tribunal, where it will ask for a R15 million penalty, says Mohlala. The city has filed notices of objection with the tribunal, she adds.
Complaints range from issues with bills for water and electricity, bills based on inflated estimates, inaccurate meter readings, problems with refuse removal and poor client service from the city's customer care centre, notes Mohlala.
However, among the problems the NCC has managed to sort out was one in which a resident received a bill for R7 million. Mohlala says the city has had to refund the resident because it could not explain how it had reached this amount on the consumer's bill.
Since inception, the NCC has secured refunds totalling R15 million for consumers wrongly billed by municipalities. Mohlala says the R7 million reversal bill is the single biggest refund so far.
The commission is in the process of issuing more compliance notices on complaints that have been outstanding for some time, says Mohlala. Once notices have been issued, entities have up to 21 days to solve the problem.
Mohlala has said consumers are being prejudiced, and the commission has done all it can to get the city to respond. In some instances, resolution has dragged on and the city has argued that the change in management is behind the delays, which is not an acceptable reason as the systems have not changed, she explained.
After the recent municipal elections, Parks Tau replaced Amos Masondo as mayor, and Trevor Fowler will take over as city manager from 1 October, replacing Mavela Dlamini.
The City of Johannesburg was one of the first entities the NCC met with after it came into being, said Mohlala. “They can't keep on giving the same excuses to consumers.”
Several unsuccessful attempts were made to get comment from the city.
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