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I have a question about the CPA. Gauteng. I have a 24 month…

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Hello, I have a...

Hello, I have a question about the CPA

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Gauteng

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I have a 24 month contract with an internet service provider who has severely slowed down my connection in the past and, as a result, I have now taken up a fibre connection. They won't cancel as my contract only ends in August 2019 and say that if I do cancel prematurely, I am liable for the full outstanding amount.

Submitted: 11 days ago.Category: South Africa Law
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Customer reply replied 11 days ago
According to what I've read, which I know can always be dangerous, the supplier can not charge me the full outstanding balance but can charge me a 'reasonable penalty or charge'. That could be the cost of original installation of R3999 (of which I paid R999 for the 24 month contract) leaving an outstanding balance of R3000.I have also read that the supplier would need to show a 'demonstrable financial benefit to the consumer' and as I am no longer using that internet at all, I am receiving absolutely no benefit at all from the Supplier. The internet connection is sitting there doing absolutely nothing and using no data at all.
Answered in 17 hours by:
5/10/2018
Lawyer: CaseLaw, Attorney replied 11 days ago
CaseLaw
CaseLaw, Attorney
Category: South Africa Law
Satisfied Customers: 1,690
Experience: BCom; LLB; Masters in Law
Verified

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will try to assist you with your legal question but please feel free to ask as many follow up questions in order to clarify your initial question. If you have a new question, you must please open a new thread.

You are right - your ISP will be entitled to charge a reasonable cancellation penalty. Most definitely the balance of the installation cost (which it probably subsidised) and also possibly 2 / 3 months charges. That would be quite normal, and in my opinion, reasonable.

I think that you've misunderstood the 'demonstrable financial benefit to the consumer' thing. That applies when a service provider wants to enter into a longer contract, than 2 years. In order to do so, the supplier must prove a 'demonstrable financial benefit to the consumer' if the consumer enters into a longer contract.

Think about a leased car which is leased for 5 years. Clearly here there is a 'demonstrable financial benefit to the consumer' because if the lease was limited to 2 years, the monthly costs would be MASSIVE.

Your ISP doesn't need to prove a 'demonstrable financial benefit to the consumer' now, at this present point in time. Rather, they use that as a test to justify a longer rental period.

If my answer hasn't provided you with enough clarity regarding your initial question, please send me a REPLY with follow up questions so that I can continue to assist you in this same thread for as long as you need. Let me know if you need more advice - don't just rate my answer as "bad".

If my are HAPPY with my answer then please click one of the STAR ratings or the SMILEY FACES to rate my answer!

Good luck and best regards,

CaseLaw

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Customer reply replied 11 days ago
Hello,Thank you very much for your reply.WIRUlink are saying that if I cancel the account then I MUST pay the settlement amount (of R1699 per month for the remaining 11 months amounting to R18,689) or I can downgrade to a cheaper package of R799 per month.Thanks for the explanation of the demonstrable financial benefit to the consumer thing. That makes sense.What can I do as they seem unwilling to be amicable and how can I word an email to them in order for them to do as you suggest in determining a reasonable cancellation penalty? If they continue to refuse to budge what is my route forward?In essence, how should I proceed in getting my account cancelled with a reasonable settlement amount?Many thanks and all the best,Christopher
Lawyer: CaseLaw, Attorney replied 11 days ago

What is the normal monthly charge?

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Customer reply replied 10 days ago
It's R1699 per month but they do say that I can downgrade to R799 for the remainder of the contract.Could I actually downgrade to R799 and then demand the reasonable cancellation penalty at the lower rate?Still the other questions from above.Thanks.
Lawyer: CaseLaw, Attorney replied 10 days ago

If you agree to downgrade to the R799 for the remainder of the contract, I don't think that you would then be entitled to cancel it.

I think that you need to stick to your guns and cancel the contract now, and advise that you will only pay a "reasonable" cancellation penalty, and unless you can agree on it with them, they must sue you and prove what is reasonable in court! You should, I suppose, tender to pay 2 months (at R1699) as a cancellation penalty.

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Category: South Africa Law
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