MTC wins challenge on collection fees

THE Communications Regulatory Authority of Namibia acted beyond the scope of its powers when it directed cellphone company MTC to limit debt collection fees on unpaid bills of its customers to 10% of the amount owed to the company, a judge ruled in the Windhoek High Court on Friday.

The powers of the Communications Regulatory Authority of Namibia (Cran) are set out in the Communications Act, and do not extend to debt collecting services, judge Harald Geier commented in a judgement in which he ruled in favour of a legal challenge that MTC mounted against a Cran decision to require the cellphone company to inform the public that by law, a debt collection fee of no more than 10% could be levied on unpaid bills of MTC customers.

Judge Geier reviewed and set aside Cran’s decision, taken on 30 August 2017, that MTC had to communicate to the public that they are by law required to pay only a 10% debt collection fee, and not a collection commission of 18%.

The judge also reviewed and set aside Cran’s decision to order MTC to inform its debt collection agency, the company Revenue Solutions Namibia, to collect only a 10% collection fee on debts owed to MTC.

MTC filed a legal challenge against Cran’s decision in March last year.

Delivering his judgement on Friday, judge Geier said in terms of the Communications Act, Cran’s powers concerning consumer protection relate to telecommunication services, and not to debt collection services.

In terms of the act, Cran had absolutely no jurisdiction to deal with matters relating to debt collection fees, the judge also noted.

He further remarked that debt collection fees do not increase the price of telecommunication services for the user, and debt collection charges were not charges related to communication services, in the sense that such charges arose only if the users of MTC’s cellphone services failed to pay their debts to the company, and a debt collection service was then used to recover money owed to MTC.

Cran acted outside the confines of the powers conferred on it by the act when it decided that MTC had to inform its customers they were compelled by law to pay no more than a 10% debt collection fee on debts handed over to a debt collection agency, judge Geier said.

MTC was represented by Natasha Bassingthwaighte, assisted by Tuhafeni Muhongo, on instructions from the law firm ENSafrica Namibia. Senior counsel Esi Schimming-Chase, instructed by Udo Nakamhela, represented Cran.

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