Cellphone contract 'rollover': 'My payment shot up from R169pm to R600!'

Consumer journalist Wendy Knowler joins Stephen Grootes on The Money Show.

There are many pitfalls when it comes to entering a contract for a cellphone, which consumers sometimes only discover when it's too late.

This week on The Money Show, Wendy Knowler warns about going the route of letting your contract roll over to a month-to-month payment system once your original agreement comes to an end.

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The consumer ninja explains why many people choose this option once they're able to.

"The downside of commiting to a cellphone contract is that you're locked in for two or three years. If you want to cancel for whatever reason, you (or your family/estate in the case of your death) face steep cancellation penalties...  so historically, many people have let their contracts go to 'month-to-month, meaning they can cancel by giving a month’s notice with no penalty fees to pay."

Wendy Knowler, Consumer Journalist

"Some people don’t realise this – thanks to payment via debit order, for some months. And when they protest, they're told that they no longer have the benefit of the 'promotional' or 'discount' in-contract rate."

Wendy Knowler, Consumer Journalist

Knowler relates the horror story of one customer whose monthly payment of R169 per month shot up to about R600 after she switched when her data contract period ended.

She only noticed the shock increase months later when checking her bank statement.

'Once the contract term ends, the pricing reverts to the standard rate for the base plan, which excludes the promotional discount', MTN told Knowler.

She emphasizes that it’s especially important for cellphone contract subscribers to know that they have a right to specific information about that hefty 'kick in' – when it happens and how much it will be.

For all the detail, listen to the interview audio at the top of the article