“Y’ello! We’re changing the terms of your contract. Sorry for you!"

“Y’ello! We’re changing the terms of your contract. Sorry for you!"

Most MTN contract subscribers got an SMS from the network at the weekend, saying “Y’ello!” - from May 1, your subscription is going up, due to inflationary pressures”.

girl with a cellphone

Naturally, many of those affected are complaining bitterly about that being unfair, given that they don’t have the right to unilaterally decide to decrease their monthly payments due to inflationary pressures.

They could try, but they’d be hit with interest charges, handed over to debt collectors, have their service suspended, and end up with a bad credit record.

Subscriptions will be going up by around 4% on average.

A few plans won’t increase at all, but 50 or so plans will, and some by more than 4%.

For example, the My MTN Choice 2GB will increase from R139 a month to R145 a month, and the MTN 500 from R530 to R551.

And the fees for Itemised Billing and Caller Line Identity will also be going up by 4% - many, including me - feel strongly that those things should be part of the package. 

What a cheek to charge extra for breaking down how your billed amount was arrived at!

MTN says Clause 16 of its contract allows them to increase subscriptions on existing contracts, provided they give subscribers 20 business days notice - essentially a month. Which they’ve done.

But does the Consumer Protection Act allow for such a consumer-unfriendly clause?

The Act says a term is unfair, unreasonable or unjust if “it is excessively one-sided in favour of any person other than the consumer" - which MTN’s price hike Clause 16 clearly is, or “The terms of the transaction or agreement are so adverse to the consumer as to be inequitable.” 

Again, that is indeed the case, because the subscriber doesn’t get to tell MTN:  “Y’ello! A month from now I’m going to be paying you a bit less due to inflationary pressures.”

But there’s a but… the company can give itself the right to insert that fee hike clause, as long as it gives its customers the right to terminate the agreement.

That’s all very well, but MTN subscribers wouldn’t be able to cancel before their 24-month contract period was up without paying what they still owe for their phones, and in many cases that would add up to a lump sum running into thousands, effectively meaning that early cancellation isn’t viable.

It’s not a special right - the CPA allows consumers to cancel any fixed term contract provided they’re prepared to pay a “reasonable” cancellation penalty.

In any event, Consumer Goods and Services Ombud Magauta Mphahlele has told me that in her view, MTN mishandled the subscription hike notification by failing to mention that affected subscribers had the right to cancel, if they wanted to avoid the fee hike, provided they do so during April, before it becomes effective.

This is not the first time a South African cellphone network has chosen to increase the subscriptions of existing contracts.

MTN has done it before, three or four years ago, and so has Vodacom and Cell C, although in 2015 Cell C announced that they would no longer give themselves the right to increase subscription fees on existing contracts.

I think it’s fair to say that when one signs a cellphone contract with one of those “we can hike your subscription at any time” clauses,  your attention is NOT verbally drawn to it.

To my mind it should be CLAUSE 1, and the salesman, either in person or over the phone, should be forced to point it out, and you should be made to sign next to it.

Or decide you want to go pre-paid instead, or sign up with a network that doesn’t have that very consumer unfriendly clause in it.

Read: World Consumer Rights Day - Do we have cause for celebration in SA?

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