As most consumers now conclude their contracts with telephone and internet providers online, the number of problems encountered with websites offering such services is growing.
Why were telecom and other digital services websites selected for this screening?
In recent years, a growing number of people purchase their fixed/ mobile and internet subscriptions online. Among services markets, the telecom sector records the highest number of complaints according to the European Consumer Centers and the 2016 EU Consumer Markets Scoreboard.
What types of services do the screened websites provide?
The Consumer Protection Cooperation members, which brings together the national consumer authorities and the European Commission, agreed to focus the screening mainly on telecommunication and other related digital services, sold in packages with basic telecom services or separately.
Most of the checked websites provide telephone services in a package with other digital services (110 of the 207). Many offer only mobile phone subscriptions (39 in total) while there were also websites offering only streaming services (22) or broadband services packages excluding telephone (13) or cloud storage/email services (10).
What did national authorities check?
In this screening, national authorities checked whether providers offered truthful and clear information on their identity, the main characteristics of the product or service, the price and the contract performance. They also examined the clarity and the fairness of the terms and conditions of service, e.g. terms that limit or totally revoke the liability of the providers or terms that provide information on the existence of after-sale customer assistance and services.
What are the results of the investigation?
Out of the 207 websites checked, only 21.3 % (44) passed the first test for compliance with the relevant EU consumer rules and almost 79 % of sites (163) were flagged for further investigation.
What kinds of problems were raised?
The biggest problems, found in more than 2/3 of the cases, relate to the lack of information on the dispute resolution options.
Also, 50% of the checked websites mislead consumers by advertising as “for free” or “on discount” services that were included in a package.
Moreover, the terms of service of these websites create an imbalance of rights and obligations to the detriment of the consumer. In 1/3 of the cases the trader has the power to change terms or service characteristics without informing the consumer in advance or giving him the right to cancel the contract. In 1/5 of the cases, the provider has excluded or limited its liability without justification or a clear explanation.
Other problems relate to unclear information on how consumers can seek compensation and obtain refund (in 1/4 of the cases) or on the automatic renewal of the contract (1/5 of the cases). In addition, the traders, in 1/3 of the cases, don’t provide any information on their identity, such as their name or their address of establishment.
Why does the screening take place simultaneously across the EU?
Deceptive online selling practices often concern operators located in several Member States. Misleading operators can be detected and tackled more effectively thanks to EU wide co-operation. Under the Consumer Protection Cooperation (CPC) Regulation, national consumer authorities co-operate to fight illegal practices concerning several Member States. Compliance checks carried out simultaneously in a specific sector across the EU are more effective.
What EU rules is the Sweep on Telecom and other Digital Services based upon?
The following EU consumer rules and their translation into national laws are relevant here:
- The Unfair Commercial Practices Directive (UCPD):
The Directive constitutes the main general body of EU legislation regulating misleading advertising and other unfair practices in business-to-consumer transactions. It has a broad scope of application, applying to all business-to-consumer transactions and in all sectors while its Guidance provides a series of examples regarding telecommunication services.
- The Consumer Rights Directive (CRD): The Directive covers certain aspects of online service contracts between a trader and a consumer.
- The Unfair Contract Terms Directive (UCTD): The Directive covers contractual terms that have not been individually negotiated and it provided in its Annex 1 an indicative and non-exhaustive list of the terms which may be regarded as unfair.
- The Directive on consumer Alternative Dispute Resolution and the Regulation on consumer Online Dispute Resolution
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