Airtel Malawi drags CFTC to court over K2.1bn penalty for “unconscionable conduct”

Mobile phone network service operator, Airtel Malawi Plc is taking the Competition and Fair Trading Commission (CFTC) to court over K2.1 billion fine relating to Khethekhethe customer loyalty bonus programme.

Airtel Malawi is vehemently denying any wrongdoing in relation to unfair trading practice and therefore not accepting CFTC’s decision to punish them.

In a statement dated September 29th 2021 and signed by Airtel Malawi Managing Director Charles Komoto said the company is pursuing the matter further in court.

Charles Kamoto: Airtel Malawi CEO

“The company denies the charges levelled against it before the CFTC and does not agree with the consequential decision,” reads in part Kamoto’s statement.

Kamoto further explains that Airtel Malawi complies and continue to fully comply with the relevant and applicable laws adding that his organisation has not breached any laws or regulations in as far as unfair trading is concerned.

“The company has not committed any unfair trading practice or provided any misleading, false or deceptive information or made false representation to the public.

“We wish to reiterate our commitment to conducting business within the applicable legal and regulatory framework and continue to deliver reliable and value-adding service,” further reads Kamoto’s statement.

On Wednesday CFTC ordered Airtel Malawi to pay the total sum of K2.1 billion as a penalty for “unconscionable conduct” in respect to the rewarding of its “Khethekhethe” bonus.

CFTC acting executive director Apoche Itimu said the Commission launched an investigation on September 16, 2021 against the Malawi Stock Exchange (MSE) listed Airtel Malawi following several complaints from consumers.

Itimu said: “It was alleged that the respondent (Airtel Malawi) stopped automatically crediting customer accounts with monthly bonuses, instead, it was alleged that customers were required to apply for the redemption of their bonuses on the 14th of every month.

“Consequently, whoever, for one reason or another did not redeem their bonuses, had them forfeited.”

According to Itimu, it was further alleged that the unredeemed bonuses were later appropriated and sold to other customers on the 15th day of the month.

Itimu said, by failing to promptly pay Khethekhethe bonus to all deserving customers who reached a minimum threshold of K1,000 per month, and consequently forfeiting the same to the company’s advantage.

She said Airtel Malawi made a financial gain of about K2.1 billion, thereby acting “unreasonably and without conscious.”

“The Commission therefore, ordered Airtel to pay a fine of K2,113,099,660 for engaging in unconscionable conduct in the trade of goods and services,” said Itimu, adding; “This represented financial gain generated from the offence.”

On March 1, this year, Airtel introduced a service of which customers were able to instantly redeem KhetheKhethe airtime royalty bonus when they make a call, buy a bundle or use internet worth K1,000 and above.
The past bonus reclaim system was through customers dialing *600# on the 14th of every month.

The KhetheKhethe service, according Airtel Malawi comes with more rewards to customers on any day of the month that they transact an assertion that CFTC is dismissing in its determination.

After buying airtime or data of K1,000 and above (in multiples of K1,000), the customers are meant to get a notification SMS that they have received their instant bonus.

Khethekhethe, according to Airtel, involves using airtime to browse the Internet (data bonus of 100MB valid for a day); buying a data bundle (data bonus of 100MB valid for a day); using airtime to make a call (coming with a voice bonus of five minutes Airtel to Airtel) and buying a voice bundle (also with voice bonus of five minutes Airtel to Airtel)

Airtel Malawi is a subsidiary of Airtel Africa Plc — a Pan-African telecommunications company with operations in 14 countries across Africa

CFTC is legally mandated to police trading standard in Malawi.

The Competition and Fair Trading Commission (CFTC) was established under the Competition and Fair Trading Act of 1998 with a mandate to regulate, monitor, control and prevent acts or behaviours which would adversely affect competition and fair trading in Malawi.

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