A surge in car theft and hijackings in South Africa has seen tracking companies tweak their contracts with existing clients to reduce their risk exposure.
Speaking on 702’s The Money Show, Wendy Knowler said car tracking company Netstar recently sent out an SMS to its Gauteng clients notifying them that it will add R12 to their monthly premiums from 1 November due to its new partnership with Vumacam.
In October, Netstar teamed up with Vumacam to get access to the latter’s network of SafeCity CCTV cameras that are installed at key hotspots in Tshwane to monitor traffic and identify stolen or wanted vehicles through specialized licence plate recognition technology, motion detectors, and night vision.
“With this new partnership, we are extending our offering to give customers an extra layer of protection,” said Grant Fraser, Netstar Group MD.
“Should a client’s vehicle tracking device be compromised for whatever reason, we will now also be able to monitor the whereabouts of the vehicle by tapping into the SafeCity network of CCTV cameras.”
Fortunately, Netstar told Knowler that it will contact affected clients by phone to ensure that they received the SMS and are aware of the changes, and that no client’s contract will be affected unless they expressly opted in for the Vumacam coverage.
Vumacam SafeCity CCTV
A courtesy call isn’t always afforded
While Netstar is making sure that its clients are informed, a courtesy call of this kind isn’t always afforded when contract changes are made, leading to many clients paying for services they don’t want, or losing access to services they had when they initially signed up.
Earlier this year, Fidelity-ADT told its clients via SMS that their premium would go up by R35 a month on 1 August as the company added fire assistance to its existing contracts, and that they will be billed for the extra offering regardless of whether they responded to the SMS or not, unless they opt out over email.
Similarly, in the case of Santam, Knowler said the short-term insurer approached affected Gauteng clients via email in September 2022 to notify them that they must install a tracker in their vehicle by mid-December or lose cover for theft and hijacking.
In December, Santam once again sent an email notifying clients who did not respond that the company had removed cover for theft and hijacking from their contracts, and that their premium would be reduced by R72 a month as a result.
Several individuals did not see the first, nor the second email, said Knowler, and got a nasty surprise when they were told by Santam at a later date that they had lost coverage for such a vital part of their insurance.
One victim was left R116,000 out of pocket and without his main form of transportation when his car was stolen in Johannesburg in one of the areas identified as high risk, and Santam refused to pay out because he did not install a tracker.
Santam said it fulfilled its obligations in terms of the Short-term Insurance Act’s Policyholder Protection Rules through its emails and was legally not required to honour the claim, whereas the client argued that the insurer could not take silence as an answer, and should have phoned those individuals who did not respond to the email to ensure that they were aware of the changes.
By law, Knowler said a company can’t automatically, by default, impose those extra costs on clients who failed to respond.
“The Consumer Protection Act term for that is ‘negative-option marketing’ and the reasoning is that a lot of people miss a lot of emails and SMSs, so it’s unfair to consider a lack of response as consent,” she said.
However, when Knowler contacted Santam about the issue, it said “our legal team has confirmed that the correct steps were taken in accordance to the applicable law. The customer was given the option to opt out as required by law.”
The Policyholder Protection Rules state that the insurer must provide at minimum 31-day written notice before making any policy changes, which Santam did.
Knowler therefore advises individuals residing in Gauteng, as well as those in other high-risk areas, to get in touch with their broker and tracking company to find out whether, if any, changes have been made to their existing contracts that they may have missed.
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