Justice Chacha Mwita of the High Court has quashed Safaricom’s move to introduce expiry dates on its loyalty program, Bonga Points, deeming it unconstitutional. The ruling, delivered on Wednesday, emphasized that once awarded, Bonga Points become the property of the customers, and Safaricom no longer retains any rights over them.
The contentious notice, issued by Safaricom in October 2022, proposed that unredeemed Bonga Points accumulated before December 31, 2019, would expire in January 2023. The policy, which set a three-year expiry limit on Bonga Points, drew immediate backlash from subscribers. It prompted Nakuru-based surgeon Dr. Benjamin Gikenyi to file a lawsuit, challenging the directive and seeking consumer protection.
Justice Mwita prohibited Safaricom from implementing the proposed expiry policy, stating that such actions would infringe on consumers’ economic rights. He noted that Bonga Points are a form of accrued consumer benefit, protected under law, and Safaricom’s unilateral decision to introduce expiry dates amounted to a violation of legitimate consumer expectations.
Violation of Economic Rights
The judge ruled that Safaricom’s attempt to change the terms retroactively violated the Constitution. “Safaricom has no right to change the terms and introduce new expiry dates on the already earned points, including the one that was to be introduced and expire in January 2023,” Justice Mwita asserted. He further declared the public notice unconstitutional as it posed a threat to consumers’ economic interests and rights.
Dr. Gikenyi’s court submission argued that Safaricom’s decision was not only abrupt but also lacked public consultation. He accused the telco, along with the Communications Authority of Kenya and the Attorney General, of failing to consider the legitimate expectations of consumers. Gikenyi estimated that over 40 million subscribers, with points valued at approximately KSh 4.5 billion, would have been adversely affected had the policy been implemented.
Safaricom’s Defense
In its defense, Safaricom maintained that the Bonga Points loyalty program is voluntary and governed by terms and conditions to which customers agree upon participation. The telco argued that the introduction of expiry dates was consistent with international practices and aimed at improving the program’s efficiency. It also noted that customers could opt out of the program at their discretion.
Despite these arguments, the court held that the points, once awarded, were legally the property of the subscribers. Justice Mwita emphasized that Safaricom’s failure to involve its customers in the decision-making process rendered the notice invalid.
Implications of the Ruling
The ruling is a victory for consumer rights in Kenya, setting a significant precedent on the limits of corporate policy changes affecting consumers. It highlights the need for businesses to prioritize transparency and inclusivity when making decisions that impact their clientele.
For Safaricom, the judgment means re-evaluating its loyalty program policies to align with consumer rights frameworks. The telco is now prohibited from enforcing any expiry dates on points already awarded unless such a policy is introduced with adequate consultation and consent from subscribers.
Introduced in 2007, the Bonga Points program rewards subscribers with one point for every KSh 10 spent on calls, SMS, and data services, and for every KSh 100 spent on M-Pesa transactions. Over the years, the program has grown to encompass millions of subscribers who use the points for rewards such as goods, services, and bill payments.
Consumer Awareness
This ruling also serves as a wake-up call for consumers to stay vigilant about changes to loyalty programs and other schemes that affect their economic interests. By challenging policies through the courts, consumers can ensure that their rights are upheld.
The judgment reaffirms that consumer benefits, once accrued, cannot be arbitrarily altered or revoked without proper legal justification, solidifying the principle of fairness in corporate-consumer relations in Kenya.
