Explained: Offers to purchase vs quotes, cellphone 'upgrade' contract costs
Consumer journalist Wendy Knowler’s “Watch-outs of the Week”
In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use.
Dodgy sales pitch
What’s up with a company called DebtCo cold-calling consumers and claiming to have a mandate from the National Credit Regulator (NCR) to “raise awareness about credit” or “help reduce interest rates”?
They’re totally misrepresenting themselves, that’s what.
“They say they are reviewing if creditors have been given credit within the ‘acceptable percentage’,” @KKNkwana tweeted.
“I found it a bit dodgy to understand what this was intending to do because they sounded like debt reviewers.”
They are debt reviewers, otherwise known as debt counsellors, and the company name DebtCo is registered with the NCR to operate the business of a debt counsellor.
However, they approach consumers in their own right, not on behalf of the NCR, the regulator’s education and communication supervisor Lebogang Selibi confirmed to TimesLIVE.
“The NCR did not give them the mandate to approach consumers about their debts, and it has no legal authority to do so,” she said.
“We are completing a compliance monitoring exercise on the debt counsellors operating under this trading name, and may launch a formal investigation if the evidence gathered warrants the investigation.”
Do you know what you commit to when you sign that Offer to Purchase?
A warning to first time car buyers and house buyers: that Offer to Purchase (OTP) you are asked to sign is a binding contract.
I heard from a woman who signed an OTP for a car, having not seen it, though the documents she signed included a clause stipulating that she had viewed the car.
“I thought it was just a quote,” she told me after the dealership refused to cancel the deal.
There’s a huge difference between a quote and an OTP.
The former you are legally entitled to in terms of the National Credit Act, and you should definitely request it when approaching a dealership about buying a car. It must set out all the details about the deal and the credit agreement, and it must be valid for five business days — long enough to run it past an expert. You are not bound to accept the quote and it is not legally binding.
However, it’s a different story when you sign an OTP.
“Consumers seem to think signing an OTP is the same thing as signing a quote, and that’s not the case,” an exasperated dealer principal told me, holding yet another cancelled deal in his hand.
Motor industry ombud Johan van Vreden said his office receives complaints about this almost every day.
“A motor dealership is completely within its rights to demand the agreement is honoured by the buyer. The only way for the buyer to resolve the situation is by negotiating with the motor dealer and hoping for a goodwill response.”
On the flipside, I also hear from consumers who’ve signed an OTP, only to have the dealership renege on the deal and sell the car to someone else, presumably for a better price.
Then they claim the car was mistakenly sold by another salesperson, or refer to the signed OTP as some form of preliminary document, not binding on them. The cheek of it!
The OTP is equally binding on both parties. If a dealership sells the car stipulated in the OTP to another customer, they are legally obliged to provide the customer with a substitute car as close as possible to the original one.
Early 'upgrades' come at a cost
There’s a downside to doing that “early upgrade” on your cellphone contract.
It’s not an “upgrade”, which sounds like a lovely perk. You are taking out an entirely new contract, but it inherits the obligations of the old contract which you haven’t met in full.
As one subscriber put it to me this week after finding out the hard way: “When you upgrade a contract, the network keeps the old one going for the remainder of the current month, and adds the new minutes and data pro-rata.
“You then get charged for both contracts from the upgrade date to the next monthly renewal date. Nobody explains this.”
Thanks to him for doing just that.
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