Cellular companies will not be able to get away with complicated terms and conditions that undermine consumers' rights when the new Consumer Protection Act comes into play in April.
The all-encompassing Act will reassert consumers' rights, and shift the burden of making sure even uneducated subscribers know what they are signing, onto the cellular companies.
Contracts, including prepaid packages, that cannot be understood by the man in the street could be declared void and torn up by a judge.
Andrew Weeks, an attorney with Michalsons Attorneys, says the new legislation will place a large burden on companies, such as cellular groups, that rely heavily on terms and conditions that the average consumer cannot easily understand.
Terms and conditions need to be explained in plain language, so that they can be understood by someone who does not have experience of that service or product, says Weeks. If companies do not succeed in getting this right, a judge can change contracts or clauses, or declare them void, he adds.
Clear as mud
However, cellular companies do not have a clear grasp of the exact implications of the Act on the way they do business, because it covers all business activities in SA.
“We are currently waiting for the publication of draft regulations by the minister of trade and industry, and will be better placed to comment in detail at that point,” says Boorman.
Meanwhile, Vodacom has made some changes to its airtime contracts' terms and conditions, based on its interpretation of the Act.
“We're expecting more specific guidelines for plain and understandable language to be included in the yet to be published regulations - once we have these, we'll be able to finalise the Ts and Cs,” Boorman says.
Graham Mackinnon, Cell C's group general counsel, says because of the extension of the implementation date from October this year to April, the company is in the process of refining its processes and business rules to accommodate the Act.
MTN says it is “continuously monitoring its processes and systems to ensure it is aligned” with the Act.
Shifting burden
Weeks explains that the caveat emptor principle of 'let the buyer beware' no longer applies to contracts that are too complicated. Companies cannot argue that consumers agreed to something they did not understand. This means clients may not have to pay for something if they didn't know what they were getting into, he explains.
The Act also applies to prepaid deals, says Weeks, and cellular companies have to make sure consumers are making an “informed choice. You can't be informed if you don't understand what you are reading.”
For example, cellular companies will not be able to refer people to Web sites for terms and conditions, as most prepaid consumers will not have access to the Internet, he explains.
Richard Hurst, senior analyst of emerging markets at Ovum, says cellular contracts typically have “chunks of fine print”, which most consumers do not read before signing. He says the only consumers who wade through the legal jargon are those who are likely to be skilled in legalese.
Hurst says, while the network operators are trying to protect themselves, contracts are almost designed to confuse and exhaust consumers. “They are trying to cover themselves, and they've put so much in that it becomes cumbersome for them.”
Arthur Goldstuck, MD of World Wide Worx, says there are many areas that cellular companies will have to change, because they cannot afford a consumer to abandon their rights. For example, clauses that tell prepaid users that the mobile company is not obligated to tell consumers where their airtime has gone will no longer be legal.
“It's going to be a huge culture shock for lawyers,” comments Goldstuck. He says cellular companies use terms and conditions to dictate to consumers and imply the operator is doing them a favour.
That will change, because the Act reasserts consumers' rights, says Goldstuck. He expects a lot of small print to be challenged when the Act comes into effect.
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