Court Blocks Safaricom's Bonga Points Expiry Plan, Upholds Consumer Rights

The High Court of Kenya has invalidated Safaricom's attempt to impose expiration dates on its Bonga Points loyalty program.

The October 2022 directive, which would have affected points accumulated before December 31, 2019, has been struck down by Justice Chacha Mwita, who emphasizes that earned points constitute customer property over which Safaricom has no further control. The court's decision stems from a lawsuit filed by Nakuru surgeon Dr. Benjamin Gikenyi against Safaricom, the Communications Authority of Kenya, and the Attorney General. Dr Gikenyi contends that the unilateral introduction of expiry dates would adversely impact over 40 million subscribers, potentially resulting in the forfeiture of Bonga Points valued at more than Sh4.5 billion by January 2023.

The implementation of these changes without customer consultation formed a central element of Gikenyi's legal challenge. Since its inception in January 2007, the Bonga Points program has rewarded Safaricom subscribers with one point for every Sh10 spent on voice, mobile data, and SMS services, as well as one point per Sh100 in M-Pesa transactions. In defending its position, Safaricom maintains that participants had implicitly accepted the possibility of program modifications through their agreement to the terms and conditions. The company also emphasizes the voluntary nature of the program, noting that customers retain the option to withdraw their participation.

However, Justice Mwita's ruling firmly rejects these arguments, declaring the notice unconstitutional and a violation of consumer economic rights. The judge specifically addresses the company's attempted retroactive modification, stating that Safaricom lacks the authority to alter terms or implement new expiration dates. The court has determined that such actions threaten consumers' economic interests and violate their reasonable expectations. In November, the telco reported substantial growth in its first-half financial results, with net earnings rising 21.7 percent to Sh36.7 billion. The Group's service revenue increased by 14 percent to reach Sh181.4 billion, driven primarily by strong performance in its Kenyan operations.

The company's flagship mobile money service, M-Pesa, remained the dominant revenue stream, contributing 50 percent of total service revenue and growing by 16.6 percent to Sh77.24 billion. Mobile data services also showed remarkable growth, increasing by 21.5 percent to Sh37.6 billion. Despite experiencing setbacks in Ethiopia due to currency devaluation, which led to a 17.7 percent drop in earnings to Sh28.1 billion, Safaricom maintained its expansion plans in the market. The company now covers 46 percent of Ethiopia's population and aims to reach 55 percent coverage by June 2025.