GETTING OUT OF YOUR CELLPHONE CONTRACT

You’ve realised it’s costing you an arm and a leg – but how do you get out of it?

WHEN your contract is for a fixed period, you can’t just cancel it and stop paying. You may cancel the contract before its expiry date but

GETTING REFUNDED

If you’ve signed a contract then discover you can’t afford it, you must contact the cellphone company immediately. It must give you a period during which you can cancel and still be fully refunded. But the situation in this regard varies from company to company and also depends on the type of contract.

There are conditions attached to cancellation as well, for example, you might have to return the product within two weeks of receipt and it shouldn’t be damaged. The cellphone or tablet must still be in its original packaging with all the accessories and promotion material. The company can provide you with the details of the conditions.

EARLY CANCELLATION

You have to give the service provider 20 working days’ notice if you want to cancel your contract before the expiry date, according to the Consumer Protection Act. You must do it in writing, for example by email, and keep a copy as proof. Some service providers stipulate that cancellations may not be done via SMS. your service provider will charge a cancellation fee.

But if you discover your mistake early enough, you might be able to cancel your contract without paying a penalty. We explain how it works.

CANCELLATION COSTS

Cancellation fees might be charged although the law states they have to be reasonable.

Exactly what constitutes a reasonable amount isn’t spelt out, but it’s implied the supplier shouldn’t be able to claim from you any profit it would’ve made for the remainder of the contract period. The company must also fully explain in writing how its cancellation fee is calculated.

Every service provider has its own way of calculating the fee, but depending on the type of contract you have, they take several of these into consideration: ▶ The value of goods in your possession after cancellation. You should pay the balance of what you still owe on the equipment. ▶ The discount you received – that’s the lower interest rate or cheaper price you benefited from. If the supplier will suffer a loss due to your early cancellation it can claim it. ▶ The period of the contract initially agreed to and at what stage you’re cancelling. It’s usually cheaper to cancel the closer to the expiry date you get. ▶ You’ll also be responsible for any outstanding amounts you owe, for example for data.

IF YOUR COMPLAINT ISN’T RESOLVED

If you consider the charges to be unfair and the service provider’s customer service doesn’t resolve your problem, contact the Consumer Goods and Services Ombud (cgso.org.za; 0860-000272). There’s a complaint form on its website and a contact centre that can confirm if your complaint is valid.

ALREADY DEEP IN DEBT

Network providers regard your contract as a service rather than a credit agreement. It means they’re not obliged to adjust your monthly payments to make it easier for you to pay them back (for example, at a lower interest rate over a longer period).

But some networks will treat the contract as part of your debtrescheduling plan and help you to pay it back more easily. Your debt counsellor can help you with this.

Preferably seek help before you fall into arrears, advises Matthys Potgieter, spokesperson for DebtSafe. For example, you could approach a debt counsellor who can analyse your debt situation and make recommendations without you having to formally embark on the debtreview process. Or contact the service provider and ask how it approaches such situations.

If you’re already in arrears it will affect your credit record and negatively affect service agreements you might want to enter into in future.