Cancelling tyre and rim cover, and where to complain

You can cancel a tyre and rim plan, but how depends on whether it is an insurance policy or a service agreement. An insurance policy carries a 14-day cooling-off right under Rule 4 of the Policyholder Protection Rules. A fixed-term consumer agreement can be cancelled on 20 business days' notice. Complain to the provider first.

Is a tyre and rim plan insurance?

Ask the provider the plain question: "Is this an insurance policy, and who is the insurer?" The answer matters because the cooling-off, cancellation and complaint rules differ.

• Insurance policy: the Policyholder Protection Rules (Short-term Insurance) apply, and the National Financial Ombud Scheme can look at a complaint.
• Not insurance: the plan is a consumer agreement. The Consumer Protection Act 68 of 2008 applies, and the Motor Industry Ombudsman and the National Consumer Commission are routes for a complaint.

Olvian does not sell tyre and rim plans or advise on them. It is a lead-referral service: you ask once, and your request goes to licensed providers who pay Olvian a fee and call you back.

Can a dealership make you take it?

Section 13(1) of the Consumer Protection Act, headed "Consumer's right to select suppliers", says a supplier must not require, as a condition of supplying goods or services, or of entering into an agreement, that you purchase other particular goods or services from that supplier, enter into an additional agreement with the same supplier or a designated third party, or agree to buy particular goods or services from a designated third party.

There are three exceptions: the supplier can show the convenience of having the items bundled outweighs the limit on your choice; it can show that bundling results in economic benefit for consumers; or it offers the bundled items separately and at individual prices (s 13(1)(i) to (iii)).

If a plan is offered with a car or a finance deal, you are entitled to ask whether it is optional, and for its terms in writing. Whether any particular offer breaks the rule depends on the facts, and Olvian cannot say.

Is there a cooling-off period?

Insurance policy. Rule 4.2 says a policyholder may, where the policy has a term longer than 31 days and no benefit has yet been paid or claimed, and no insured event has occurred, cancel within 14 days after receiving the policy contract by way of a cancellation notice to the insurer. Premiums paid up to the notice, and any received after it, must be refunded, less the cost of any risk cover actually enjoyed (Rule 4.3). The insurer must comply no later than 31 days after it receives the notice (Rule 4.4). Rule 4 applies to new policies and to variations of existing ones (Rule 4.6).

Not insurance. Section 16(3) of the Consumer Protection Act lets you rescind a transaction resulting from direct marketing, without reason or penalty, by written or other recorded notice within five business days after the later of the date the agreement was concluded or the goods were delivered. The supplier must return any payment within 15 business days (s 16(4)). Section 16 does not apply where section 44 of the Electronic Communications and Transactions Act applies (s 16(1)). Whether a particular sale is direct marketing is a legal question; do not assume it is.

Can you cancel after that?

For a fixed-term consumer agreement, section 14(2)(b)(i)(bb) allows cancellation at any other time on 20 business days' notice in writing or another recorded manner. Under section 14(3) you remain liable for amounts owed up to the date of cancellation, and the supplier may impose a reasonable cancellation penalty with respect to goods supplied, services provided or discounts granted in contemplation of the agreement lasting its fixed term. It must credit you with anything that remains your property. Section 14 does not apply to transactions between juristic persons (s 14(1)).

Before a fixed term ends, the supplier must notify you of the impending expiry between 80 and 40 business days before the expiry date (s 14(2)(c)). If you do nothing, the agreement continues month-to-month, unless you direct the supplier to terminate it or agree to a renewal (s 14(2)(d)).

For an insurance policy, ask for the cancellation terms in the policy itself, and what you would get back.

How do you cancel?

1. Read the plan terms for how to give notice, and use that method.
2. Give notice in writing or another recorded manner, for example email, and keep a copy and proof it was sent.
3. Say which plan, which vehicle and the date you want it to end.
4. Ask for written confirmation, and for the refund, if any, with the calculation.
5. If the debit order continues after cancellation, tell your bank in writing and keep the evidence.

How do you complain?

1. The provider, in writing. Describe what happened, what you want and by when. Rule 18.10.1 requires an insurer to tell you how to reach the relevant ombud at point of sale, in periodic communications and when a complaint is rejected or a claim repudiated.
2. Insurance policy: the National Financial Ombud Scheme (NFO). Its service is at no charge to the complainant, and it can only look at your complaint once you have lodged it with your insurer. Phone 0860 800 900.
3. Motor-industry supplier: the Motor Industry Ombudsman (MIOSA). It describes itself as the only accredited ombud for the automotive industry. Its service is free to consumers and it never asks for payment. The Automotive Industry Code of Conduct says it cannot hear matters within another ombud's exclusive mandate.
4. The National Consumer Commission. Section 69 of the Consumer Protection Act lists the routes open to you, including referring the matter to an applicable ombud and filing a complaint with the Commission under section 71.
5. The FSCA. It supervises how regulated financial institutions conduct themselves. It is a regulator, not an ombud: a claim dispute goes to the provider and then the ombud.

Beware of anyone who contacts you and asks for payment to resolve a complaint. MIOSA says it does not request payment for complaints or dispute resolution.

What should you keep when you cancel?

Keep the plan terms, your cancellation notice, proof it was sent, any reply, and bank statements showing the debits before and after. If a refund is due, the dates matter: for an insurance policy cancelled under Rule 4, the insurer must comply within 31 days of receiving the notice (Rule 4.4).

Do exclusions and limits have to be pointed out to you?

Yes, where they limit the provider's liability. Section 49(1) of the Consumer Protection Act says a notice or a provision of a consumer agreement that purports to limit the risk or liability of the supplier, to make you assume a risk or liability, to make you indemnify the supplier, or to be an acknowledgement of a fact by you, must be drawn to your attention in the manner the section requires. Under section 49(3) it must be written in plain language. Under section 49(4) it must be drawn to your attention conspicuously, in a form likely to attract the attention of an ordinarily alert consumer, and before you enter into the agreement or are asked to pay. Under section 49(5) you must be given an adequate opportunity to receive and comprehend it.

Section 51(1)(b)(i) adds that a supplier must not make an agreement subject to a term that purports to waive or deprive you of a right under the Act.

In plain terms: an exclusion or limit that matters should not be buried. If the provider reads the limits to you on the call, ask for the same words in writing. If you cannot find an exclusion the provider relies on later in the documents you were given, say so when you complain.

Who answers the judgement questions?

Whether to keep or cancel a plan is your decision. Olvian is a lead-referral service paid a fee by licensed providers; it is not an insurer, broker, FSP or adviser, and it does not advise either way. The licensed provider can explain their plan's terms, and the routes above are open to you if the answer is not good enough.

Sources

• Policyholder Protection Rules (Short-term Insurance), Government Notice 1433, Government Gazette 41329, 15 December 2017: https://lawlibrary.org.za/akn/za/act/gn/2017/1433/eng@2017-12-15
• Tranche 2 amendments to the Short-term Insurance Policyholder Protection Rules, September 2018 (National Treasury): https://www.treasury.gov.za/twinpeaks/Policyholder%20Protection%20Rules%20and%20Supporting%20Document/Tranche%202%20amendments%20to%20the%20Short-term%20Insurance%20PPRs%20Sept%202018%20(track).pdf
• Consumer Protection Act 68 of 2008, Government Gazette 32186: https://www.gov.za/sites/default/files/32186_467.pdf
• National Financial Ombud Scheme: https://www.nfosa.co.za
• Motor Industry Ombudsman of South Africa: https://www.miosa.co.za
• National Consumer Commission: https://www.thencc.org.za
• Financial Sector Conduct Authority, Financial Consumer page: https://www.fsca.co.za/Financial-Consumer/