Inside Cartrack’s R10m settlement for unfair business conduct
Cartrack settled with the National Consumer Commission for R10m due to unfair business practices like misleading marketing and contract issues.Summary
Cartrack reached a R10 million settlement with the National Consumer Commission (NCC) following complaints of unfair business conduct. The NCC’s investigation revealed six violations of the Consumer Protection Act (CPA), including unfair marketing tactics – specifically “referral selling” where customers were promised rebates for referrals – failing to update bills after payments, harassment, excessively one-sided contract terms, and refusing to cancel contracts without excessive penalties. The company was initially fined R5 million administratively and ordered to pay an additional R5 million to 167 customers who filed complaints, stemming from an initial 210 complaints received by the NCC.
Specifically, the NCC found Cartrack induced consumers to buy services by promising benefits for providing referrals, a practice prohibited by the CPA. They also failed to disclose key contract terms and conditions and, in at least 19 cases, used harassment and coercion. A total of 82 clients were affected by the excessively one-sided contract terms, and 66 were impacted by the refusal to cancel contracts and imposition of penalties.
Cartrack stated that it has updated its terms and conditions and that the complaints represent a small fraction of its two million subscribers, characterizing the issues as requiring “enhanced clarity” at the NCC’s request. The company also noted that some complaints were dismissed by the NCC.
(Source：Sowetanlive)