Dar es Salaam. According to Tanzanian laws, every mobile phone SIM card holder is supposed to register. This means the SIM card holder (customer) enters into an agreement with the service provider and once the contract is completed, the parties are bound by its terms and conditions.
But only few people are aware of this. If it is in a printed document, the terms and conditions are usually printed at the back page of the contract in very fine font. Many people do not take the trouble to read what the terms and conditions are. Even when registration is done online, many people not take the trouble to read what the terms and conditions require.
“Now that you have mentioned it I can recall, when I was registering my SIM card there was a section at the back of the form, but I didn’t bother to read it,” says Mr Rajabu Jumbe, a resident of Tabata in Dar es Salaam. When asked why he did not read the terms and conditions, Mr Jumbe says:
“It was written in very small letters and I did not think it was important because even those, who were helping us to filling in the forms said it didn’t matter much.” Many people suffer the consequences after being treated unfairly in business deals simply because they are not aware of specific terms and conditions.
The Fair Competition Commission (FCC) is public institution established to promote and protect effective competition in trade and commerce and protect consumers from unfair and misleading market conduct. Its main objective is to increase efficiency in the production, distribution and supply of goods and services.
Mr Frank Mdimi, a senior communication and public relations officer, says major functions of the FCC revolve around review and registration of standard form on consumer contracts. “In this way, we ensure contracts have contents that do not harm consumers,” he says.
He notes that a standard form contract is an agreement between the supplier of goods or services and his or her consumer. “For instance, if you use a mobile phone, there are several consumer contracts involved: the voice, data and mobile money. All have separate standard forms.
You might have heard of mobile phone companies saying ‘the terms and conditions apply’. Here they relate to such standard form contracts, which consumers may not be aware of. These terms and conditions are set by the service provider,” he says. Although many consumers are not involved in the preparations of the terms and conditions of the standard form consumer contract, they are bound to implement them as long as they sign the form, showing their consent.
The terms and conditions are usually structured in terms of ‘take it or leave it’, which the consumer has to be aware of before signing the contract. Standard form consumer contracts relate to goods or services ordinarily acquired for personal, domestic or household use or consumption. They are typically used for the supply of goods and services to consumers in many industries including telecommunications, banking, finance, insurance, domestic buildings, gyms, motor vehicle rentals, travel, utilities - the list is not exhaustive.
They fulfil an important role in the distribution of goods and services as they potentially reduce transaction costs by eliminating the need to negotiate details of a contract whenever a product is sold or a service is rendered. “However, they have the ability to trick or abuse consumer rights and legitimate interests due to unequal bargaining power between the parties,” says Mr Mdimi.
He says FCC is legally bound to register these contracts. It draws this legal mandate from the Fair Competition Act (FCA), 2003, which provides that: “Whenever the terms and conditions, which are to govern any consumer transaction are to be included, whether wholly or in part, in a standard form contract, the terms and conditions shall be registered with the Commission in accordance with the regulations under this Act”.
When asked to outline examples of unfair or unconscionable terms, he lists the terms that penalise the consumer for a breach of contract, but not the business: terms that limit the liability of the business, but not the consumer, terms that allow the business to vary the terms without consumer consent and so on.
A standard form contract is defined by the Standard Form Consumer Contracts Regulations, 2014 as “an agreement created by one party that employs standardised, non-negotiated terms and conditions, usually in pre-printed forms.”
In other words, where a supplier has a contract, which meets the definition of ‘standard form contract’, he or she will be required to register the contract if the same is supplying the goods or services to a ‘consumer’ under that contract.
But according to Mr Mdimi, the requirement to register the terms and conditions of a standard form contract only applies to a contract involving ‘consumer transactions’. A consumer is essentially the end user of goods or services.
According to the FCA, a consumer is “any person, who purchases or offers to purchase goods or services, otherwise than for the purposes of resale, but does not include any person, who purchases goods or services for the purpose of using them in the production or manufacturing of any goods or articles of sale.”
Under the Regulations, 2014 any person, natural or legal, who uses a standard form consumer contract in their business must apply to the FCC for its registration within 21 days before the execution of the contract. Furthermore, all standard form contracts that are currently in use must be submitted to the FCC for review.
This means, all standard form contracts that were concluded or that were otherwise in force, prior to December 29, 2014 should be submitted to the FCC for review and with effect from that date, any new standard form contract created should be submitted for review within 21 days before their execution in the market.
Mr Mdimi says the FCC issued two public notices in the widely circulating newspapers in Tanzania in June and August, 2015 to raise awareness to the general public and the business community in particular about the coming into force of the Standard Form Consumer Contracts Regulations, 2014.
“All suppliers applying traditional and online standard form contracts involving business to consumer transaction were required to take note of the fact that all standard consumer contracts are required to be reviewed and registered by the Commission as from 1st of January, 2016,” he says.
Application for review and registration of a standard form consumer contract requires applying businesses to use the prescribed form called “SFC Form No 1” accompanied by the relevant fee and the decision to register or reject the same may be made within 21 days after submission. Where the terms and conditions of a particular standard form consumer contact have been approved, a certificate of approval shall be issued by the implementing authority,
The Fair Competition Commission, and where the standard terms and conditions are rejected, the applicant shall receive an explanation within 21 day.
Similarly, when a company changes its standard contract, it is required to submit the proposed new standard contract for review by FCC before approval. The regulations specify that a failure to submit a standard form contract is an offence and, if convicted, a person will be liable to a penalty.