IN YOUR CORNER
Companies need a little corporate punishment, too
Big firms seldom, if ever, compensate consumers for withholding a legitimate refund
So you finally got that refund you were owed months ago. But why should you be compensated for all the time and effort it cost you to get justice?
If you don’t pay what your contract with a company obliges you to when they tell you to pay it, they have many ways to punish you.
What you owe them is bloated with interest, and in the case of a bank, penalty fees, and they are entitled to warn other credit providers about your naughty move by “blacklisting” you with a credit bureau.
An adverse credit listing doesn’t just hamper your ability to be granted more credit, it means the interest rate you’re offered is higher than it otherwise would have been.
Plus it will certainly prejudice you if you’re jobseeking, and insurers consider someone with an adverse credit record to be more likely to file a fraudulent claim. Greater risk always equals higher premiums.
All in all, that’s quite a bundle of punishments for nonpaying or slow-paying consumers.
And then there are admin fees. If you get a traffic fine in a rented car, you can expect the actual fine to be bloated with a few hundred extra rands to cover the rental company’s admin – someone’s got to pay for all that envelope opening and e-mailing.
Should you have an incident in that car, don’t be surprised if the admin charge alone sets you back by about R1,000.
But I know from personal experience and that of thousands of consumers whose cases I’ve investigated over the years that large corporates seldom, if ever, deem it appropriate to compensate consumers if they (the company) withhold a legitimate refund.
Typically, the consumer battles for months to get just what they are owed, with no interest whatsoever, never mind compensation for all the admin – investment of time, call costs and so on – involved in getting them to make the refund.
And what viable forms of “punishment” do such consumers have at their disposal? Naming and shaming on social media and the Small Claims Court.
Take Joburger Steve Archibald’s experience.
Last September he received a call or SMS – he can’t remember which – from an agent on behalf of First National Bank (FNB) offering him the bank’s Law on Call legal insurance product.
“I agreed to buy the policy and was eventually forwarded the policy document, but on reading the fine-print terms and conditions, I decided to cancel the policy in terms of the 30-day cooling-off period,” Archibald said.
“I was advised that the premium I had already paid would be refunded by means of a credit to my account.”
He was happy until it didn’t happen.
“Over the course of the next four months, I made many calls about the status of my refund and was assured, on each occasion, that it would be processed within the next day or so,” he said.
He was finally refunded on February 18.
“I have since attempted to obtain some form of compensation for the time and frustration I was forced to endure,” Archibald said, but the only offer he got was for a refund of his call costs on presentation of a statement.
“I have told them repeatedly that I do not have a record of the relevant calls and have thus suggested that they check their voice recordings, but they refuse.
“I have also pointed out that the compensation I seek should extend beyond the calls, as I would have been penalised with punitive interest rates, at the very least, had the roles been reversed.”
I agreed wholeheartedly with Archibald’s sentiment, and took up his case with FNB.
Pushed to come up with an appropriate sum, Archibald worked on 12 calls made by him, each lasting five minutes, plus another hour spent preparing and sending e-mails, billed at his current professional rate of R750, which added up to R1,500.
I put that to FNB, asking if the bank was willing to refund him that amount, and if not, why?
FNB Insurance operations manager Tertius Bossert said the bank had apologised to Archibald “for any inconvenience that may have been caused by the delay in processing the refund within a reasonable period”.
“Whilst the bank has met all its contractual obligations, we are engaging the customer to extend a gesture of goodwill,” he said.
“We value the relationship with our customer and have taken the necessary measures to ensure that a service lapse of this nature does not reoccur.”
Archibald confirmed the goodwill gesture amounted to R897, with the bank going to great lengths to emphasise that the payment in no way constituted “compensation”.“The sum supposedly represents a refund of the R299 premium for three months, being the period for which the initial refund was delayed. Having not paid the premiums, that doesn’t make sense to me, but I’m happy to have the matter settled.”What to doCompanies are notoriously bad at responding to vague compensation demands, so if you’ve had to put up a long fight to get a company to pay you what they owe you, make a note of your call costs and time spent, and demand that you be refunded or “goodwilled” or whatever term makes them feel comfortable.It’s high time corporates realise that their customers’ time and admin schlep – necessitated by their service lapse – has value.