When Roger Major told MTN he was cancelling his 24-month contract from August 2016 to August 2018, he was charged an astronomical interest rate on the outstanding balance because he didn’t inform them in writing.
“At the end of August I called to advise them I would not be renewing my contract. They told me because I was late informing them, I was obliged to pay for an extra month, this meant 25 months. That was the end of the phone conversation. I never heard any more about it and thought they had waived this extra month.
“Then in February this year they rang me and told me I still owe R566 for the extra month which I had not paid. I said okay, send me the bank details and I will pay. Which I did and thought that was the end of it.
“More than a month later they rang again and said I was R10 short. Send me the bank details again and I will pay the R10. They said I now owed R65 because of interest. I said I will pay the R10 I owe you. You have waited this long to allow the interest to accumulate and in so doing get more money from me. But they insisted I pay R65 and I put the phone down,” the Sea Point resident said.
Then MTN called Mr Major again demanding R85.
“I explained again that I will pay them the R10 that I was originally short. Their interest increases are unacceptable and they could have explained this to me before the interest started to accumulate. Their interest rate is 1 200%. Can they do this?,” Mr Major asked.
Actually, no: the prescribed rate of interest was changed on September 1 this year to 10% a year.
The previous rate was 10.25%. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%.
Interestingly, each state in America has its own interest rate laws, that help consumers by placing a limit on the amount of interest a creditor can charge.
The legal maximum in Maryland is 6%, but can be 8% under a written contract. Maybe we should all move to Maryland.
MTN said when a subscriber signs a contract after the term has been reached, it will continue on a month-to-month basis until MTN receives a written notice for termination.
“We refer to the subscriber agreement that a consumer may cancel the contract by giving us written notice (not by SMS) of cancellation before the end of the initial contract period. Mr Major gave notice after the contract period, so he was liable for the additional month. If this notice had not been received the contract would have continued until we received a cancellation notice.
“We hand over the accounts to external debt collectors after 90 days of non-payment. Our record shows Mr Major had an outstanding amount of R500.11 from August 2018.
“When the account is handed over it will attract legal fees billed by debt collectors. We have asked the collection team to close the file and stop all communication with Mr Major as the MTN SP account has been settled,” MTN said.
Mr Major confirmed that it had been dropped. “Thank you very much for your assistance.”
Shaz Pather of Parklands asked for help on behalf of her domestic worker, Zizipho Macamba, who paid R1 400 cash for a Samsung device from Jet (MTN) in Mitchell’s Plain.
“Within a few days the on/off button didn’t work. She couldn’t get off work within the seven-day (return) clause.
“When she went back to the store three weeks later, they told her the device would be sent to Johannesburg for repair and would take up to six weeks. Jet took Ms Macamba’s daughter’s cell as an alternative number but they never called her. After numerous enquiries, costly taxi fares from Khayelitsha, she got nowhere. On her last trip she was told the MTN workshop had closed, so they sent the cell to a repair shop in Canal Walk. She should call them and they will deliver it. She received a WhatsApp, saying to collect and pay an additional R250 (for a new cell).
“I was also given the run-around by Jet, MTN and Samsung. The repair store, Fix-It, said pay or we will destroy it in three months. Please help as this has been going on for six months already,” Ms Panther said.
MTN said Jet sold Ms Macamba a new handset as ordered from the MTN warehouse. They are not refurbished units.
“Our warranty assessment requires the customer to return the handset to the store. In this case Jet stores were meant to keep the customer informed but they didn’t. The warranty was voided due to the physical damage on the power button. Ms Macamba was billed R250 for the repair of this part.
“However, we decided to replace the handset and we will keep in contact with Ms Macamba until the matter has been settled,” MTN said.
Ms Pather said the new handset was delivered to Ms Macamba at the end of September.
“We want to thank you for your amazing assistance in sorting out her MTN problem. Her new cell was dropped off at my home. She was very teary, but grateful. It was a long struggle but we are pleased it’s over.”