Cellular call centres con consumers

South Africa's biggest mobile operators are unlikely to act in accordance with the Consumer Protection Act (CPA) until forced to do so.

This emerged during an investigation by ITWeb, which found that Vodacom, MTN and Cell C, in a bid to retain subscribers, are reluctant to inform clients of their rights to an affordable exit from long-term contracts, as stipulated by the CPA.

This means potentially thousands of subscribers' rights to cancel their contracts have been negated since the inception of the CPA in April, as call centre staff at all big three mobile firms have repeatedly issued misleading information.

According to call centre agents, to get out of a new fixed-term contract, subscribers have to settle the entire balance of the deal, and - in some cases - also pay in an amount for the handset.

Stephen Logan, of Logan Attorneys, says this flies in the face of the CPA, because it negates consumers' rights to get out of a fixed-term deal without paying a hefty penalty.

The CPA prevents cellphone companies from charging hefty penalties that invalidate subscribers' rights to cancel a fixed-term contract early. Only a “reasonable fee” can be levied.

The Act is a welcome relief for consumers; it should force mobile operators to disclose the value of the handset separately on bills so that consumers know exactly what they owe for the “free” device.

So-called “free” handsets have long been a bone of contention for subscribers because they were used to lure consumers into two-year contracts, which they could not get out of without paying hefty penalties.

policies.

Call centre staff at Vodacom and MTN twice told ITWeb that subscribers would be liable for the balance of the contract. A Vodacom cancellation agent asked: “Why do you want to take a contract and then you cancel it again?”

MTN will also charge a “claw-back” fee for the handset, while Cell C will not only charge the balance of the contract, but also the rest of the cost of the handset and a R1 000 penalty fee, ITWeb was told by the call centre agents.

Vodacom's official policy is that the cancellation fee is now 75% of the outstanding balance, which applies to all contracts entered into after April, says Portia Maurice, chief officer of corporate affairs.

After ITWeb's first call to Vodacom's contact centre, the company said it had intervened to make sure the correct details are given out, yet ITWeb's second call elicited the same information as before.

This is despite Nomsa Thusi, Vodacom executive head of corporate communications, saying agents were tested and found to be “giving the correct information”.

Robert Madzonga, chief corporate services officer at MTN SA, says if subscribers cancel post-CPA contracts, it will charge R1 710 for the handset, and a month's subscription fee. MTN did not explain why its call centre agents were giving out misleading information.

Cell C general counsel Graham Mackinnon says its policy is that customers cancelling post-April contracts will only pay a “reasonable” fee, which is linked to the cost of the handset, and not for any more airtime.

Asked to explain why ITWeb was misinformed by the call centre, Mackinnon says the call was routed to the technical department, because it was from a private number, and this team does not specialise in contract information.

ITWeb's attempt to speak to a call centre agent in the sales division was unsuccessful. Mackinnon says the misleading information has been raised with department heads to ensure its policy is enforced.

None of SA's largest operators responded to specific questions about whether the misinformation is a ploy to prevent subscribers from cancelling contracts, or how many consumers have likely been put off getting out of their contracts since April, because of the incorrect details provided by contact centre staff.

Similarly, none of the operators responded to questions about whether they would investigate how many of their subscribers have been potentially misinformed and put off from cancelling contracts, and whether these subscribers would be contacted with the correct information.

Virgin Mobile, according to its call centre, only charges subscribers for the outstanding balance on the handset. The call centre's statement is in line with its officially stated policy.

8ta's call centre could not clarify how much would be charged, other than to say it would be a “certain amount”. The operator, SA's latest entrant, says there is a “termination fee”, which is on the outstanding handset value and an “administration” charge.

Logan argues that cellphone companies are thumbing their noses at the CPA and negating subscribers' rights to cancel contracts by charging “huge” fees. He says the balance of the handset is justified, but operators should not levy penalties for future airtime that will not be provided to subscribers.

“It doesn't matter if they are charging 25%, consumers are not getting value,” says Logan. Mobile operators could be raking in “millions” from this practice, he points out. “I think they're on very shaky ground... There is no doubt they are breaching the CPA.”

Logan believes the CPA also applies to fixed-term contracts entered into before April.

Arthur Goldstuck, MD of World Wide Worx, says the information being given out by call centres will put people off cancelling their contracts if they do not know any better. Operators must bring their call centres in line with the CPA, but are unlikely to fulfil that obligation until they are forced to, he notes.

Call centres are subscribers' main point of contact with their service providers, says Goldstuck. Incorrect information given out by call centre staff shows cellular companies are hanging onto pre-CPA practices.

Goldstuck expects several test cases at the National Consumer Commission (NCC), which will have to make rulings that will set out the landscape. Cellphone companies are not offering to give up their positions, he says.

“The cellphone contract environment will possibly be the single biggest challenge for the NCC.” There is no other industry with such a small number of suppliers for such a large number of people, explains Goldstuck.

Based on the level of churn, about 80 000 contract subscribers change or drop contracts each month, notes Goldstuck. He says many of these could be people changing contracts that have expired.