It is illegal for a company to regard your non-response as consent, says consumer journalist Wendy Knowler.
In other words, nobody may offer to sell you anything and then take your lack of response as consent.
They may not ask you to agree (or disagree) to changing a key element of your contract with them, and then take your non-response as permission.
This practice is called “negative-option marketing”; countries around the world consider it a bad business practice.
A consumer’s silence cannot be taken as agreement. A company must source a definite response, not make self-serving assumptions based on a customer's lack of response.— Wendy Knowler, consumer journalist
Negative-option marketing is illegal in South Africa – in 2011 the Consumer Protection Act outlawed it.
A supplier must not promote any goods or services; offer to enter into or modify an agreement for the supply of any goods or services; or induce a person to accept any goods or services or to enter into or modify such an agreement, on the basis that the goods or services are to be supplied, or the agreement or modification will automatically come into existence, unless the consumer declines such offer or inducement.— Consumer Protection Act
Nevertheless, says Knowler, companies continue to do this.
In March this year, Sally Shaw, who lives in a Northern Cape village, got an SMS from FNB to say they wanted to change the date of payment on her credit card account from the 23rd of the month to the14th.
If she didn’t want that to happen, she should SMS ‘NO’, the bank said.
It was part of the bank’s campaign to “align” credit card payments with their client’s salary dates in order to, as the bank put it, “improve collections and to help customers manage their finances in a smart way”.
Shaw is self-employed; she doesn’t earn a salary.
The bulk of her clients pay her between the 25th and the 2nd, so she was very happy with her payment date as it was - at the end of the month.
She says she SMSed “NO”, but then deleted the text, so she can’t prove it.
But, thanks to the unilateral date change, she missed two payments which ended up costing her about R5000 extra in interest and fees.
When she protested, via email, she was told by one of the bank’s “customer servicing” agents she had to provide proof if she wanted a reversal of the interest and fees she’d been charged as a result of the date change.
Her payment date has since been moved back to nearer the end of the month, but Shaw was not at all happy about what happened and what it cost her - “unconscionable” she called it - so she raised the issue with Knowler.
How can FNB get away with this legally? How many people have FNB done this to?— Sally Shaw
Knowler tried to find out, and posed these questions to FNB:
Is it true that FNB changed the payment dates of customers who did not respond to the SMS campaign, taking their silence as a yes?
How is that justified?
How many/what percentage of those clients later objected and had their dates moved back to the original one?
Does the bank intend to do that again?
- Is the bank willing to refund Ms Shaw the fees she incurred as a direct result of having her payment date moved to the 15th against her wishes?
FNB’s response answered only one of the questions:
We can confirm that the misunderstanding on the monthly repayment date has been rectified. Any fees that may have been incorrectly incurred by our customer will be reversed with associated interest. FNB Credit Card encourages customers to maintain their credit card facility using a feature called ‘Maintain Auto Payment’ on the FNB App with the ability to manage their preferred payment dates.— Cilliers Kriel, CEO - FNB Credit Card
The bank failed to say anything about their illegal use of negative option marketing, or how many people fell prey.
Knowler tried again, even mentioning her intention to discuss the issue on The Money Show.
I think it’s important for people to know if this is something the bank intends to do again, don’t you?— Wendy Knowler, consumer journalist
We have nothing further to add.— FNB Corporate Affairs
The Money Show’s Bruce Whitfield asked Knowler to elaborate.
Listen to her discuss the case in the audio below.
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