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The contract that won’t let you go

No company likes to let a customer go, and in the past, many have come up with policies which make it incredibly difficult for you to cancel. Such as - if you don’t cancel your three-year contract on the very last day of those three years, you will be locked in with us for another three years, unless you pay a massive cancellation penalty.

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Sign pen business document, Pixabay.com, https://www.pexels.com/photo/sign-pen-business-document-48195/

Listen to the podcast to find out what happened when Consumerwatch took up the case.

Such tactics are illegal now, in terms of the Consumer Protection Act, but that’s not stopping a Durban security company from putting that into its contract.

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The legislators who drew up the CPA felt that it was expecting too much of a consumer to remember the date that their gym, cellphone or home security contract was going to expire, two or three years after signing up, in order to cancel in time to avoid the contract continuing against their will.

So the companies are legally required to inform their customers, between 40 and 80 days before the “fixed term” contract expires, telling them when the contract will expire and explaining their options - cancelling, renewing or letting the contract carry on month-to-month.

So if you don’t respond to that notification, they can keep the contract going, but you can cancel at any time, giving just a month’s notice.

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Dan Dayaram of Woodview signed a three-year monitoring contract with Durban security company Royal Alarms in September 2014.

He assumed that since the initial period was long gone, he could cancel with a month’s notice. That is, after all, what the CPA allows him do.

But when he mentioned wanting to cancel, the company pointed him to their contract, and told him that because he failed to cancel the contract on its very last day - how ridiculously specific is that - he became contractually bound to another full three-year term, ending in September 2020.

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Have you had something similar happen to you? Let me know in the comments section below.

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