The National Consumer Tribunal has imposed a R1 million fine on Vodacom, a major mobile operator in South Africa, for engaging in “unconscionable conduct” related to hefty contract cancellation fees.
- Vodacom was found guilty of imposing a cancellation penalty of 75% of the remaining subscriptions on contracts between 2020 and 2022, effectively preventing customers from escaping their contract obligations.
- The penalty imposed by Vodacom was deemed excessive and in violation of the Consumer Protection Act, which allows consumers to cancel fixed-term contracts with a “reasonable” cancellation penalty.
- In addition to the high cancellation penalty, Vodacom also required customers to pay all outstanding fees before terminating their contracts on request, further exacerbating their financial burden.
- The National Consumer Commissioner, Thezi Mabuza, welcomed the Tribunal’s decision and stated that Vodacom’s conduct was not in line with the spirit of consumer protection laws.
- The commission received numerous complaints from Vodacom subscribers, particularly during the pandemic, when many individuals had lost their jobs or experienced salary cuts, making it financially impossible for them to continue with their contracts.
- Vodacom was also found guilty of failing to inform subscribers about their options and the consequences thereof before the end of their contracts, as required by the Consumer Protection Act.