WeeklySA_AdminACTION: Class action launched against the two companies
By Thuli Zungu
Telkom and Mutual and Federal Risk Financing company clients who have been allegedly overcharged for their device insurances over the years are to be refunded their money by the end of this month.
Nozipho Mkubu, 24 ,says she stumbled upon this alleged unfair business in May last year in when she wanted Mutual and Federal to replace her cell phone which was stolen. Her phone was valued at R9000 and was required to pay an excess amount of R1399 before the claim could be processed.
She later referred the matter to the Ombudsman for the Short-Term Insurance (OSTI) after she discovered that she was overcharged each time she paid her monthly premium with Telkom since the inception of her contract in 2019. The Telkom contract she signed, which consumer Eye has seen, shows that an amount of R132 was to be debited every month but they allegedly deducted R152 a month from her bank account instead.
Although Telkom is not an insurance company, the company collects premiums which are even more that what was agreed upon, Mkubu told Consumer Eye. “I have since discovered that legally one party cannot change the terms and conditions of the contract without the consent or knowledge of the other and therefor all the deductions were not valid,” she alleged.
She said after OSTI intervened, OMNISURE, the company that responded on behalf of Telkom and Mutual & Federal admitted that she was overcharged and offered to refund all the money that was overcharged since the inception of her contract. “I was overcharged by R19, 80 every month for the insurance on my phone which is beyond the contract amount,” says Mkubu.
She says Mutual & Federal informed her that the overcharging was a result of an error with the system. Her presumption is that this was the case with many other clients. “The amounts have not been refunded to those whose monies were deducted in error. That is why I think there must be a class action against the two companies while OSTI investigates complaints that individual consumers have sent to them,” Mkubu says. Instead, of accepting the offer to be refunded, she has instead enlisted the services of Gareth Miller who is funding the class action against the two companies.
OMNISURE has offered to refund all the money they have overcharged her, but she was worried about other clients who have not yet picked up this error. “Telkom is not an insurance company, but collects premiums which are even more that what was agreed upon,” Mkubu alleged.
Anda Ndzandza,30, of Ferndale, one of the complainants says Telkom should rectify all the debit orders they have erroneously made for all the affected clients so they could correspond with the amounts they have contracted for. Brain Serasengwe,34, of Protea Glen was overcharged R10.92 monthly for 31 months in his first contract and 17 months on his second contract.
Mkhululi Diko,32, of Diepsloot, alleged he was overcharged R15.64 a month for ten months on his first contract and the same amount on his second contract for six months
• Kgomotso Zimase of Telkom said this matter is currently pending before the Johannesburg High Court. They were therefore not at liberty to discuss the merits of the case. ‘’However, for the benefit and protection of consumers, it is important to clarify that the rate of Value Added Tax (VAT) in South Africa is regulated. It is a percentage of the retail price of goods or services. In other words the VAT amount is added on the policy document sent to the consumer after a contract is signed.
Traders in South Africa are obligated to collect VAT on behalf of the South African Revenue Service. All VAT collected must then be passed onto the South African Revenue Service. Telkom can confirm that it is compliant with all applicable VAT laws, and any suggestion otherwise is misleading to customers’’.
Managing Director of Mutual and Federal Risk Financing Limited, Karen Naidoo, confirms that court proceedings are currently underway and they were involved in legal discussions with Advocate Douglas Shaw . Naidoo said the matter involved Telkom, Mutual and Federal Risk Financing Ltd and five individuals in relation to a pricing issue on these individuals’ insurance contracts.
‘’ Unfortunately , there was a system error when premiums were collected, which has been rectified and we are attending to resolve the issue with the affected individuals.
‘’Given that this is a legal case that is ongoing, we cant comment in full on your inquiry and comments because it is related to the above legal matter.’’
Although Gareth Miller is cited as the litigation funder on the court documents, Naidoo said : ‘’ We do not know Mr. Gareth Miller and have no knowledge of his involvement in the case’’.
