Leading telco in South Africa, Vodacom has been slapped with a R1 million ($52,666) administrative fine by the National Consumer Tribunal.
Vodacom was found guilty of violating sections of the Consumer Protection Act (CPA) by imposing hefty contract cancellation penalty fees.
Between 2020 and 2022, Vodacom imposed a cancellation penalty of 75% of the remaining balance of clients’ fixed-term contracts on clients that cancelled their contracts early. The abuse effectively denied clients the right to cancel their fixed-term contracts.
The Consumer Protection Act in South Africa allows mobile network subscribers to cancel fixed-term contracts before their original expiry dates. To do so, subscribers must provide 20 business days’ notice to the network operator, and a “reasonable” cancellation fee may be charged.
Upon customer complaints, the National Consumer Commission (NCC) acted swiftly and determined that Vodacom’s conduct was “unethical” as it imposed terms and conditions that negated consumers’ right to cancel their contracts.
The acting commissioner at the NCC, Thezi Mabuza, confirmed that Vodacom had agreed to reimburse some consumers who had cancelled their contracts. However, she emphasised that this wouldn’t absolve Vodacom of its contravention of the Consumer Protection Act.
Vodacom is currently reviewing the NCC’s decision and is yet to provide a formal response.
