NCC drops consumers

The National Consumer Commission (NCC) has dropped consumers, as it did not follow its own rules, after trying to force Vodacom to change its contracts to be in line with the Consumer Protection Act (CPA).

The National Consumer Tribunal (NCT) - the NCC's higher body - found the commission unlawfully issued a compliance notice, to the wrong party and for a reason not authorised in the law. It says the notice was not issued reasonably, nor was it procedurally fair.

This month, the NCT cancelled the notice that the NCC had issued to Vodacom, ruling that the commission had acted impulsively and illogically.

The commission had tried to force Vodacom to sign a consent order to make sure it would change its contracts and, when the company refused, issued a compliance notice. Vodacom was in the process of amending its agreements when the notice was issued.

Last April, the NCC initiated an investigation into the ICT sector, focusing on fixed-line telephone contracts and mobile telephone contracts. Vodacom Service Provider responded to a letter from the NCC with a copy of an amended subscriber agreement.

In June, the NCC gave Vodacom an analysis and requested a meeting, which was held the following month. Vodacom then sent the NCC a revised agreement, which the commission declined to analyse.

Despite the amended contract, the NCC then presented Vodacom with a consent order and asked it to sign it. The operator refused as it had agreed to change its contract to be CPA-compliant and would put these into the trade by end October.

Subsequently, the NCC issued a compliance notice against Vodacom to force it to amend its contracts by the end of September, or face a fine. Vodacom argued that the notice related to an “obsolete agreement” and that the NCC knew the contract would “not be in the public domain”.

In the ruling, the tribunal says the NCC did not convince it that Vodacom was “engaged in prohibited conduct”, which is a requirement for a compliance notice. It says the NCC's actions were “arbitrary”.

The NCC was satisfied with Vodacom's steps to change its contract and issue the new paperwork by the end of October, says the tribunal. “What it was not satisfied with was the applicant's [Vodacom's] refusal to sign a consent order.”

Because Vodacom refused to sign the consent order, the NCC “changed its mind” and told Vodacom to comply by the end of September in the notice, says the NCT. “This change was both arbitrary and capricious.”

It is “unlawful” for the commission to use the threat of a compliance notice in order to force Vodacom to sign an order when it did not agree to the terms, says the ruling. “Refusing to agree to a consent order does not constitute prohibited conduct under the CPA.”

In addition, the NCC did not take Vodacom's latest amendments into consideration and did not consider the newest version, says the tribunal. It says this was “arbitrary and capricious and it failed to take into consideration relevant considerations”.

The tribunal also found the NCC did not consult with the Independent Communications Authority of SA, as it is meant to, but merely met with the regulator to inform it the notice would be issued.

Nicholas Hall, an attorney with Michalsons Attorneys, says the NCC's actions were unlawful and borders on “gross irregularity” as it did not comply with its own rules.

Hall says this is disheartening from consumers' perspective, because the commission is not complying with the basics and, as a result, is failing to represent consumers' interests. He says it appears that the NCC does not know what needs to be done to perform its own functions.

However, Hall adds that the NCT has clearly indicated what steps must be taken, which will hopefully lead to the NCC improving.

Vodacom's chief officer of corporate affairs, Maya Makanjee, says the group is “very pleased with the ruling” as it has endeavoured to comply with the Act since its inception.

NCC commissioner Mamodupi Mohlala-Mulaudzi did not respond to requests for comment.