Think you're covered? Read the fine print first

1. No, there’s nothing stopping cellphone networks from increasing subscription fees on existing contracts

Here’s a question I get a lot: “My cellphone company has increased my subscription during my two-year contract period. Surely that’s illegal and I should be allowed to cancel without paying a penalty?” 

Yes you should, but you can’t. The cellphone companies have inserted a clause in their contracts allowing them to unilaterally increase subscriptions on existing contracts.

And if you want to cancel in protest, you will be made to pay an early cancelation penalty, based on a percentage of the subscription fee for the remaining months of your contract.

So not fair, but the regulators let them do it.

2. Beware the balloon payment trap in car financing

Balloon payments may seem appealing when financing a car, but the choice often backfires on the car buyer years later. 

Standard Bank’s Vehicle Asset Finance division notes a 41% rise in new-vehicle purchases with balloon payments over the past five years, with about a third of customers opting for the biggest balloon amount, 40%. 

In other words, they carve off 40% of the financed amount to worry about five years or more later. 

Then they get to settle that “balloon” amount in cash or refinance it after those five years - if they still qualify for finance then. Many don’t.

Bottom line - if you can’t afford your monthly instalment without a balloon, choose a cheaper car.

3. Are you sure your car is the only one with that number plate?

Did you know that more than 25% of number plates in South Africa are cloned, which can lead to you being held responsible for someone else’s speeding fines?

Unpaid fines, even if not yours, could trigger a warrant for your arrest. 

A free service, finesssa.co.za, lets you check fines under your ID number. Far better to be proactive than to find out you have a bunch of fines to your name – that you had nothing to do with – when stopped at a roadblock. 

4. You don’t have to buy that warranty the car salesperson is pushing on you - you have the benefit of far better protection, free

Don’t be fooled by a car salesman into thinking that you have to pay for a so-called after-market warranty when buying a car that no longer has the manufacturer’s warranty.

One listener told me: “The car was advertised for R290K.

“After I expressed interest, suddenly extra costs were added - R3,000 licence fee, R4,900 admin fee, and a warranty of R14 500.

“Is this allowed?” he asked.

That licence fee is grossly inflated, and that admin fee should be negotiated down, too.

Forcing you to buy an after-market warranty - of THEIR choice - is the dealership’s attempt to avoid having to pay for any issues that emerge on the car within six months of purchase, as the Consumer Protection Act (CPA) requires of them. Don’t fall for it.

5. Your rights on refunds: It pays to know the CPA rules

Many consumers wrongly assume that they are entitled to return anything they’ve bought for a full refund. 

Not so. We only have the legal right to return a product if it’s defective, thanks to the Consumer Protection Act. And we get to choose between a refund, replacement or repair.

When Karen Bayley’s R300 slip-on shoes, which her husband bought her from Sole Base in Hillcrest in December, disintegrated within two months, she was initially denied a refund.

A voucher or replacement pair were the only options she was given.

Happily, after my intervention, Sole Base refunded her and pledged to align its returns policy with the CPA.

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