Platinum Africa, a leading cellphone service company with 32 000 customers, is at the centre of a storm over dodgy airtime contracts.
The Department of Trade and Industry has laid down the law to Platinum Africa and two banks have threatened to investigate the company if it does not stop its hard-sell tactics.
Platinum Africa consultants appear to have engaged in dubious sales tactics when dealing withlow-income, pay-as-you-go cellphone users, who discover that their accounts are being debited for services they never agreed to.
The Mail & Guardian‘s investigation reveals the manner in which unauthorised debit orders are implemented and highlights the ease with which unscrupulous people are able to debit bank accounts.
It also shows how difficult it can be, especially for financially unsophisticated people, to prevent accounts from being plundered.
The unethical behaviour of Platinum Africa’s sales consultants came to the M&G‘s attention when a domestic worker’s account was debited without her permission by a company she had never heard of (see case study).
Further investigation has found that there are many more victims and Standard Bank, on behalf of its customers, lodged a complaint with First National Bank (FNB) and Absa, both of which conduct accounts on behalf of Platinum Africa.
According to the department, it conducted an investigation last year and found problems with the call centre and selling tactics of sales consultants. An agreement was signed with Platinum Africa whereby the company undertook to tighten up the way their consultants sell their products.
Brian Richardson, CEO of Wizzit Bank, concerned about reports of fraud, contacted six Wizzit customers who have had their accounts debited.
All six claimed they had never entered into a contract and one customer said he was conned into giving his banking details as the sales consultant told him he had won a prize.
According to FNB, it was alerted to a possible problem relating to the electronic debit orders generated by Platinum Africa International during late November last year.
‘We became aware of the potential problem as a result of our ongoing monitoring procedures relating to the processing of electronic transactions submitted by our clients. There were also some complaints from members of the public whose accounts were being debited.â€
Although FNB cannot reveal more because of the ongoing investigation, it states that ‘we will take whatever action is deemed necessary to ensure that the problem is resolved in line with accepted industry practicesâ€.
Absa states that they conducted an audit of Platinum E-collect, another company within the group and found them to be in order.
However ‘despite this, and given the nature of the services Platinum provides, the nature of its contracts and its targeted market segment, Absa is concerned that Platinum customers may not fully understand the products and services they are buying or the full cost of these products and services. Additional investigation of Platinum will be undertaken by Absa over the coming months.
Should Absa find that Platinum is in breach of electronic funds transfer (EFT) rules, or should evidence of unethical behaviour on the part of Platinum be uncovered, Absa reserves the right to take appropriate action against Platinumâ€.
The M&G‘s investigation found that a fair amount of paperwork is required to prevent a debit order from going through your account again and even more to have the debit order reversed.
Even after following the procedures, clients discover that unscrupulous companies can simply change the date or amount of the debit order to by-pass the bank’s system. Many people may find it easier to just close their accounts.
One of the directors of Platinum Africa, Bob Lafite, has responded to the M&G‘s investigation. In this particular case Lafite says the sales consultant was dismissed in September due to unethical selling practices.
‘This same agent was dismissed on September 29 2006 for a similar incident, so we could take no further action. We have been continuously improving our monitoring processes and training of the agents, but as you pointed out, some incidents do slip through the cracks. We do appreciate your feedback and immediately take steps when matters such as these are brought to our attention.â€
Duping a domestic
In the case of the domestic worker, Platinum initially claimed that in May last year they had contacted the woman and she had agreed to an airtime contract of R161,40 a month plus a sign-up fee of R99.
They claimed that they had a voice recording, which held her to the contract. According to Platinum, they attempted to debit her account on the 20th of every month, but each time it was rejected because of lack of funds. As a result a penalty fee of R29 was added each month. Because the company never received the money, the airtime was never activated and the contract was deactivated in October. Despite never having utilised their services, Platinum claimed she owed them R1 223 according to her original contract. In November they managed to deduct R250 from her account. Never having authorised the debit order, she immediately signed an affidavit, a copy of which was sent to her bank. She was also required to fill in a dispute form, which allowed the bank to prevent other debit orders from going through. She also faxed a letter to Platinum Africa saying she had never entered into the contract, that no more funds were to be deducted by the company and requesting an opportunity to listen to the voice recording in which she is alleged to have agreed to the contract. Despite all these attempts to prevent further debits, Platinum switched the date of the debit order and a further R250 was deducted.
Four working days after the company received the fax, they said the fax had not been processed and they would come back to her when they got around to it. At this point the Mail & Guardian left a message for one of the directors of the company requesting that the matter be handled urgently and that the woman have the opportunity to hear the alleged voice recording. Platinum responded soon afterwards, stating the voice recording revealed that the woman had not actually entered into a contract and it should never have been implemented. They offered to repay the money deducted. If the M&G had not intervened, what would the outcome have been and how did they obtain the woman’s banking details? Despite several requests, Platinum Africa has yet to provide the voice recording. — Maya Fisher-French