Enforcement Action Taken against Four Telecommunications Companies
June 22, 2015
- Review of contracts and cancellation processes results in important changes for consumers
- Commission reminds businesses of their obligations under consumer law
- Consumers should be aware of their enhanced rights when buying goods and services online or over the phone
22 June 2015: The Competition and Consumer Protection Commission (the Commission) has today published details of seven Compliance Notices issued to telecoms providers. Compliance Notices enable the Commission to direct a trader to cease a commercial practice which does not comply with consumer law. The action was taken as part of an ongoing review to ensure compliance with the European Union Consumer Information, Cancellation, and Other Rights Regulations 2013, which transposed into national law the EU’s Consumer Rights Directive (known as the CRD).
Following the coming into force, in Ireland, of the CRD in June 2014, the Commission has been monitoring compliance by businesses and in recent months it reviewed telecoms distance contract terms and conditions and the information given to consumers in relation to their cancellation rights. In general distance contracts are classified as those entered into on-line or over the telephone. Following the review of their websites, four companies; eircom (eircom Limited and eircom trading as eMobile), Meteor, Three and UPC, were considered not to be compliant with different aspects of the CRD.
The non-compliance centred on the following areas:
- Consumers must be informed (in plain and intelligible language) of their right to cancel a contract and have the necessary cancellation form made available to them before entering into a distance contract. As a result of the Commission’s action each of the four telecoms providers will now ensure that they provide consumers with the required information before they are “signed up” to a contract.
- The correct cancellation period must be applied and communicated to consumers. The Commission found that incorrect information was provided about the length of cancellation periods and in certain distance contracts, incorrect information was given in relation to the waiving of cancellation rights. The Commission’s intervention means that all four firms are now applying the correct terms in which a consumer may cancel a distance contract.
- The Commission found that eircom and Meteor failed to tell consumers of their right to cancel under the CRD. To remedy this, the companies are now required to write to the affected consumers, to inform them of their cancellation rights. Consumers have 14 days from the date on which they receive this information to cancel their contract, if they wish.
Isolde Goggin, Commission Chair commented, “The Consumer Rights Directive is now in effect in Ireland for over a year so all businesses have had ample time to update the information which they give to consumers. The CRD obliges traders to provide certain information to consumers and we are strongly urging businesses in all sectors to ensure that they are compliant. As our actions prove, we will take all necessary steps to ensure consumers are given the information and afforded the protections they are entitled to under consumer law.
“It is clear from an analysis of the contacts we receive that a significant number of consumers have problems with their telecom providers. This is why we have reviewed the sector and have taken the resulting action. Under the CRD consumers have stronger rights than ever and they should know what their rights are, so that they can avail of them if they need to. Our website, consumerhelp.ie, provides the relevant information consumers need to help them, including a dedicated section about services and contracts. Also, if a consumer finds that they have signed up to a contract without being made aware of their rights, they should contact the Commission through consumerhelp.ie. Finally, we would like to acknowledge the co-operation of the companies involved.”
Notes to the Editor
Section 75 of the Consumer Protection Act empowers the Commission to issue a Compliance Notice to a trader who is engaging in or has committed a prohibited act or practice under the Act or contravened other consumer legislation. The Compliance Notice requires the trader to cease the practice. The trader has 14 days to appeal the Notice to the District Court. If no appeal is made, the Notice takes effect.
The Consumer Rights Directive
The European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013, referred to as the Consumer Rights Directive came into force in Ireland on 14 June 2014. The Directive simplifies and strengthens consumer protection laws, meaning those shopping or buying online, can now rely on the same rights as those who purchase in a store. These rights apply no matter where in the EU goods or services are purchased.
The main features of the Consumer Rights Directive are:
- Enhanced transparency on price and terms and conditions;
- The end of unjustified surcharges for the use of credit cards and hotlines;
- A ban on pre-ticked boxes on the internet;
- An extension of the period to change their minds from 7 days to a uniform 14 days across the EU;
- Stronger refund rights, within 14 days of the consumer’s cancellation of a purchase;
- Rules banning online traps, like offers on the internet that advertise something as free when in reality it is not (for example horoscopes or recipes);
- Better protection in relation to digital content, especially regarding information on the software and hardware the products work with.
The Competition and Consumer Protection Commission
The Competition and Consumer Protection Commission was formed on 31 October 2014 following the amalgamation of the Competition Authority and the National Consumer Agency. On that day the Competition and Consumer Protection Act 2014 came in to force. The Commission has a dual mandate to enforce competition and consumer protection law and we will build on the work of the legacy organisations to: protect and strengthen competition, empower consumers to make informed decisions and protect them from harmful business practices.
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