Tuesday, December 12, 2017

Telkom's R500 per month ripoff on a R229 FreeMe mobile contract

On 31st August I went to the Telkom store in Cresta to get a new FreeMe 1GB cell phone contract. I had seen the advert in the City Press newspaper and noted the "Terms and Conditions" and "While Stocks Last" disclaimers. But a much bigger surprise was in store: R500 per month "extras" that are not mentioned in the Mobile Terms and Conditions or the Telkom Product Terms and Conditions for FreeMe Postpaid and TopUp or the Standard Terms and Conditions. But I digress.
Chad the helpful store assistant told me that he didn't have stock of the specific model, but he could offer me a similar deal on a Huawei P9 Lite black instead. That was fine, since it was only R10 per month more. He kept the phone aside for me and told me the credit check would take 72 hours. Since it was Thursday afternoon I figured that I would hear from them on Monday or Tuesday. Not a chance.
I tried calling the store. No answer. Do a google search for "Telkom Direct Cresta" and click on the Google Reviews. Most of the 67 reviews complain that they don't answer the phone. The manager of the store confirmed to me that it is company policy for them to not answer the phone. You have to go there in person. Never mind having to travel there and pay for parking. Imagine that: a telephone company that doesn't answer the phone! You can't make this s**t up.
So after getting no response from the store I contacted @TelkomZA on Twitter. The first time that didn't work. You have to put a hashtag in the Direct Message. Huh?

Finally I could go back to the store on Friday a week later. That's 72 hours if you only count the store opening hours, not the normal idea of 72 hours being 3 working days.
So now I'm back at the store and I figure that I've overcome the hurdles of getting a phone model I like and getting the credit check done. All we have to do is fill out the paperwork, sign it and take the phone home. I told Chad that I was only interested in the contract price, and wasn't prepared to pay for extra charges. No problem, we would set the credit limit to zero. He said nothing about a "Spend Limit" of R500 per month, nor did he say anything about the fact that the default is R500 for the first month and you can't change it for the first month. I only found that out in November.
Chad explained that the first invoice would be pro-rata for September and the full month of October. No problem, I said, that would be around R460. He printed out 4 pages for me, including an invoice for the handset with its serial number, and 3 pages of my credit application. He had transposed my name and surname, so we fixed that and I left with the phone.
By the end of October I hadn't received a bill from Telkom Mobile, so I called their automated enquiry line and was told that my invoice was R447, payable on 5th November. That sounded like the right ballpark figure so imagine my shock when on the night of 6th November they deducted R931.90!
I called Telkom at 7.30am to find out what was going on. That's when they told me about the R500 "Spend Limit" and I told them that I had insisted that it be set to zero. He also said that I would have to go back to the store to sort it out, because he couldn't help me with store matters on the phone. Surreal.

So I went to the store on Tuesday morning 7th November. The store opened late because they were too busy taking a group selfie inside than worrying about the queue of customers waiting outside.
Chad wasn't there (how convenient) but I spoke to another assistant and called the store manager over. I started by asking him why his store doesn't answer their phone. He mumbled something about it being company policy and gave me a different number to try. It doesn't work. I complained that I had still not received the October invoice via email, but the November invoice had arrived and it was for R1667.90. How was this possible on a contract for R229 per month. He tried to tell me about the R500 Spend Limit and I pointed out that I had specified a ZERO credit limit when I signed the contract. We opened case number 21643735 and I told them I wanted a refund. They also printed out the October and November invoices. They told me that they could only adjust the Spend Limit effective on 1st December, because it was now already November. I told them that I was not paying for any of the extra expenses because I had specifically instructed Chad to set the credit limit on ZERO, and the documents he gave me showed that this had been done.
So the first case number gets "resolved" but all they did was pass me a credit for R500. No refund, no explanation. I had to call them again to find out what was going on. That phone call took 20 minutes and achieved nothing. Basically the call centre's attitude is that you must go to the store. And the store's attitude is that you must contact the call centre. Imagine that. The "S" in Telkom definitely stands for Service.
Consider how the whole "deal" is structured: You sign up for a R229 per month contract, but you get a R500 "Spend Limit" that is in place from day 1 and you can't change it for the first month. It's not mentioned anywhere in the terms and conditions so if the salesperson doesn't tell you about it you get caught for the second month too. Invoices are issued dated 1st of each month, but my 1st October invoice wasn't ever sent. Even if I had seen it on the 1st October and realised that they were charging me for R500 usage that I didn't authorise, by then it's too late to stop it for October, you can only stop it for November.
In my case the first I knew about the R500 Spend Limit was on 6th November when it was rudely grabbed from my account. By then it was too late to do anything about September or October, and they could only stop it for 1st December. In onne of my many calls to their call centre I learnt that there is a default setting on their web site that would help reduce the extra charges. But it is turned off by default. That's because the whole scam is designed to catch the unwary or ignorant customer. It's been cleverly crafted by the crooks at Telkom to fleece their customers.
The "Out of Bundle Redirect" is switched off by default. If you switch it on then when the phone runs out of data, it redirects you to a page where you can buy more data. The default is "Never redirect, carry on browsing using my airtime. OOB rates apply", instead of "Always redirect service to OOB page". So when I found out about this page in November I was able to prevent the phone using additional data, but this didn't stop it from generating extra billing items by making calls. And it turns out that calls from Telkom Mobile to 1023 Directory Enquiries, are charged at R5 per call. That's a VAS rate call, but of course you don't find that out until the invoice arrives. Another part of their evil scheme.
Then they try the oldest trick in the book with mobile phones: you were using the phone so you are responsible for the charges. Or variations on the theme. What they fail to grasp is that I am not the user of the phone. The phone is used by a sales rep who works for commission only. I am merely the account holder. So I will not be held responsible for charges that I didn't authorize and are not part of the contract.
One other thing: unlike a Telkom land line contract, which you can pay in every month, the Telkom Mobile contract only works on a debit order, where they deduct the money from your account. And they think they can deduct whatever they like. And if you reverse a deduction they can claim that you have invalidated the contract. We'll see. I reversed the R931.90 amount because they were not authorized to deduct that amount. Let's see what they do next.
Today I went back to the Telkom Store in Cresta, and spoke to the manager again. I explained (again) that I wanted a refund of the remaining R510 charges that I had not authorized, and asked why they weren't refunded the first time. He wanted to blame the billing department but I was having none of it. So now we have another reference number and another round of waiting.
I also challenged him to produce the part of the terms and consitions that specify the R500 Spend Limit but he was unable and unwilling to do so. He said he would get the Telkom Legal Department to send it so me. This should be interesting.
In the meantime I am drafting a letter to the Advertising Standards Authority to put a stop to this nonsense. If they don't advertise the R500 Spend Limit, they should be forced to withdraw it, and refund all those who inadvertently got ripped off in the process.
Update 12th December: Logged case number 22057592 with the Manager of the Cresta branch
Update 13th December: I discovered two different versions of the Telkom Mobile Subscriber Terms and Conditions. Neither one uses the term "Spend Limit".
Update 22nd December: Case number 22057592 still not attended to. Got a demand to pay R1160.90 to avoid the service being suspended. @TelkomZA responds to inquiry:

Update 2 January 2018: You can't make this stuff up. I dialled their help line and this is what I get:
There's always a pleasnat surprise on my Telkom invoice. This month its the outrageous R200.94 debit order "Payment Rejection fee". They think they can just deduct whatever they like.

Update 2 Feb 2018: It turns out that I was given a postpaid contract instead of a TopUp contract, so I had to go back to the Telkom Cresta Shop for a third time to fix it. And "Chad" doesn't work there any more. Why am I not surprised?
Update 8 Feb 2018: If you reverse a debit order, or the debit order fails, they charge you R200.94, even though this amount is not listed on their Tariff Card. If you pay in the R200.94 during the month, the balance of that month's invoice isn't deducted by debit order at the end of the month as it is supposed to. Instead, nothing is deducted, but the balance is carried over to the following month. Of course the Terms and Conditions are silent about this too. Nothing makes sense with the Telkom Accounts department.


Aadil said...

Quite honestly, you have only yourself to blame. Why on earth do you want the aggravation of dealing with Telkom?

Buy a Xiaomi dual SIM phone from takealot or an online store for R2500 which has better specs than the phone you purchased, insert a prepaid SIM from Vodacom or MTN for voice and get a month to month data SIM from Axxess or Afrihost. Smooth sailing, no contracts, no headaches and you'll save so much money

Donn Edwards said...

Good question. The answer is simple: the FreeMe contract allows a lot of calls to Telkom land line numbers, and a LOT of WhatsApp usage, which happens to be useful when canvassing for sales, which is the purpose of the phone.

FWIW I bought a R2500 smart phone from Kalahari.com (now Takealot) and the damn thing was faulty. The replacement worked fine and my next phone I got from Zeek Online.

But I agree that the frustration of dealing with Telkom has made me think twice about ever doing business with them again. I don't use them for internet access.

Unknown said...

Hi Donn,

I am both pleased (because I see I'm not alone) and fucking annoyed - to put it bluntly - that this is happening!

I set my spend limit to R50 upon opening my contract in October 2017 (let me not elaborate on how they lost my ID doc and still haven't got it back). January 2018 I get an invoice for an additional R314 over my contract fee. How does this happen if the spend limit is set to R50? I phone the call centre and am told that my spend limit is set to the default R500. The lady is useless and can't answer me how this happened. I complained on social media and they say I must have changed it which I absolutely did not. I have also been told that I am liable, with Telkom accepting no responsibility that the charges went over the spend limit, or that it wasn't done in the first place. I have the R50 spend limit noted on the invoice I received with my contract. I am at wits end and I simply do not want to pay it out of principle. They are ripping people off and doing as they please with no repurcussions. What can I do? Have you received any resolution?

Donn Edwards said...

It seems like the only answer is to change to a Top-Up package. Then you decide when and how much to spend, rather than using Telkom's dodgy billing system.

Unknown said...

This is indeed scary, but what scares me is that my spend limit is set at R25560, yes, not a type-o, thats twenty five thousand five hundred and sixty rands... I have tried for the past 2 years to set spend limits and it still shows that figure as my permanent spend limit and then the R1.00 that I set as my new spend limit, as my monthly spend limit, which is very contradicting.

I don't use any of these contract sim cards in any phones as I only took them for the device, this is the main reason I don't use those sim cards.

Unknown said...

I am having the same problem. Found out last month the spend limit us on R500. Had this contract 5 months now. Called them and they set the limit to R50. I was also advised to change it to R1. However this month it is R860 again. My contract is R229 per month. This is such a rip off and it needs to stop

Donn Edwards said...

Change the contract to a "top-up" account so they can't overcharge you.

DylanG said...

Hi, @Donn Edwards

Is there any follow up to this?

I have been affected by the same issue. I have replied to you at: https://community.telkom.co.za/t5/Understanding-Your-Bill/Problems-with-the-R500-Spend-Limit-setting-on-my-Telkom-Mobile/m-p/13117/highlight/false#M553

Thank you.

Annoying said...

I am facing the same problem last month I was billed R1560 when my limit is R500

Miss J said...

I just upgraded few days ago and I asked for my spend limit to set to zero and I was told that I can easily do that when I activate my phone, it's been two days now and I am not winning even the Telkom app is not helpful and their customer car e line reffers me to their Whattsapp service which is the most useless thing I have ever experienced in my life