New rules entered into force on 17 July 2016 which strengthen the protection given to consumers when concluding communications contracts which contain contract lock-in periods.
The existence of a contract lock-in period is subject to the consumer being granted an identified and quantified benefit of some kind, associated with the subsidisation of equipment, installation or activation of the service, or other promotional conditions. Accordingly, the maximum duration of any contract lock-in period remains 24 months, ensuring that consumers are still able to enjoy advantageous benefits and promotional offers, but it also becomes possible to conclude contracts without any lock-in period, and contracts with lock-in periods of 6 and 12 months.
From this date, where contracts which contain lock-in periods are concluded over the phone, providers now have to save recordings of the calls and retain these recordings for the length of the lock-in period and until expiry of the corresponding period of limitations. Where contracts are concluded in person, providers are required to inform consumers about the lock-in period in writing.
Providers also have to inform consumers, upon request, as to the time remaining until the end of the contract and also the amount payable if the customer decides to cancel the contract early.
In addition, providers may not stipulate additional lock-in periods unless making new subsidised equipment available or offering properly identified and quantified promotional conditions. The express written consent of the consumer is required in all circumstances.
If consumers choose to cancel a contract early, before the end of the agreed lock-in period, charges shall not correspond to the sum of outstanding benefits, cannot exceed the value of the benefit granted and cannot be higher than the costs incurred as a result of the installation of the operation (i.e., costs of installation and service activation, as well as other costs incurred by the provider in making the service available at the customer's address).
The new rules also ensure that extra protection is given to customers where the provider unilaterally changes the agreed conditions during the contract. In these cases, customers will be able to cancel contracts without penalty, regardless of any lock-in period.
Providers are given until 26 August 2016 to adjust their procedures, so that, from that date, they are able to ensure compliance with the most stringent requirements, particularly in relation to:
- the range of options as regards the duration of the lock-in period, whereby providers may introduce tariffs without a lock-in period and tariffs with lock-in periods of 6 and 12 months for each offer;
- transparency of information as regards the advantages which warrant application of a lock-in period;
- proportionality of the penalty to be paid in case of early cancellation by the customer;
- guarantee of the rights of consumers who are charged penalties, whereby providers are now required to demonstrate that consumers have given their consent to the stipulation of a lock-in period.
The obligations set out in the law apply to new contracts or amendments to contract which have already been concluded.
