A South African FinTech (financial technology) startup has instituted a R14 million claim for damages against social media giant Facebook.
PrepaidWealth.com, a startup co-founded by Gabriel Nkuna, has served a notice of motion filed at the Gauteng Local Division High Court in Johannesburg to Facebook Inc on the 19th November 2019.
Nkuna said the notice was served following two incidences where Facebook Inc suspended and/or closed two promotional pages created for PrepaidWealth.com on the Facebook.com platform.
The notice of motion served to Facebook Inc contains three terms. The first one is to declare the reason for suspending or closing the pages unfounded. The second term is for Facebook Inc to pay for compensatory damages. The third term is to reinstate the pages.
According to the notice of motion, PrepaidWealth is claiming $950,000 (R13.9 million) for compensatory damages.
Facebook South Africa had no comment for this article.
PrepaidWealth.com, a recently launched South African FinTech Startup for accumulating cash or providing discounts when data and airtime is purchased from the platform, has launched a programme that enables schools to raise money passively from teachers and parents when they buy their personal data and airtime.
“The reasons for suspending and/or closing the pages are unfounded since there was no breach of community rules set out by Facebook Inc on their platform,” Nkuna said.
“PrepaidWeath.com also believes that the misunderstanding by Facebook Inc is derived from the business model of PrepaidWealth.com.”
But Nkuna said it is quite unfortunate that “we had to resort to serving a notice of motion to Facebook”.
He added: “We tried our best to reach out to Facebook. However, it seems like Facebook’s entire online customer engagement has been automated to use bots. While we are a big fan of automation and bots, we believe that for paying customers like ourselves, a human
intervention is required when there is a stalemate from a bot”
PrepaidWealth.com said its model is designed to give back a portion of the profit margin or discount back to the customer when they purchase products from its platform. In particular, PrepaidWalth.com gives back 80% of the discounts/margins from the distributor back to the customer. The remaining 20% is kept by the platform.
The startup added that products sold on its platform include among other things data bundles, cellphone airtime, etc. There is also an option for accumulating the discounts individually or as a group and withdraw/claim them as cash.
PrepaidWealth.com believes that, as a result of the model promising cash from the accumulated discounts, Facebook Inc’s bots have mistakenly classified the pages as malicious pages.
PrepaidWealth.com has on numerous occasions tried to appeal the suspension.
However, the bots or the person who was looking at the matter failed to grasp the business concept, said Nkuna.
South Africa’s Facebook office was not helpful either because people with support queries are not allowed to go past the security personnel at the gate of the office park.
As a result, PrepaidWealth.com said it was left with no other choice but to serve a notice of motion filed at the high court.