When buying a mobile phone subscription, customers rarely have the opportunity to review the terms and conditions at the point of sale before signing the agreement. Some customers are not given a copy of the terms and conditions of agreement at all. This was revealed in a survey jointly commissioned by the Finnish Competition and Consumer Authority (FCCA) and the Finnish Communications Regulatory Authority (FICORA). The authorities require mobile phone operators to take action to improve the legal protection of their customers.
A mobile phone subscription agreement must be made in writing, and the consumer must receive a copy of the terms and conditions of agreement. The consumer must also be given the opportunity to review the terms and conditions before signing the agreement. Contacts received by the Consumer Ombudsman at the FCCA and by FICORA indicate that many consumers had not been given sufficient information on the principal terms and conditions of a subscription agreement in the sales transaction situation, and some were never even given a copy of the terms and conditions of agreement. These problems persist despite years of supervisory efforts.
In order to gauge the actual scope of these problems, the Finnish Competition and Consumer Authority and FICORA commissioned a ‘mystery shopping’ survey. The purpose of the survey was to explore over-the-counter sales of DNA, Elisa and TeliaSonera mobile phone subscriptions.
Findings confirm that there are issues in subscription sales
The findings of the survey show that operators do not allow customers to review the principal terms and conditions of agreement before signing an agreement: only 3% of customers were shown all the terms and conditions pertaining to the mobile phone subscription when concluding the agreement. About one in four were shown part of the terms and conditions.
There were great differences between operators regarding whether customers were given a printed copy of the terms and conditions. None of the TeliaSonera customers interviewed had received a copy of the complete terms and conditions; 90% of DNA customers and 92% of Elisa customers were given the complete terms and conditions at the point of sale or later by e-mail. The survey also indicated that the terms and conditions pertaining to a single subscription may be delivered in several parts and through different channels. The actual content of the agreement may in such a case remain unclear to the customer, because the agreement consists of the document signed at the shop and several other documents detailing the terms and conditions.
The survey also explored other practices in the sale of mobile phone subscriptions such as the publishing of prices and the consent to electronic direct marketing. Significant shortcomings were found in these matters as well.
Consumer Ombudsman and FICORA: survey findings are worrying for the consumer
The terms and conditions of a subscription agreement should be clear to a consumer before signing the agreement. It should also be possible to review those terms and conditions.
“A consumer should not have to ask for the terms and conditions of agreement; it is the seller’s responsibility to give the consumer the opportunity to review them without undue complication when the agreement is being concluded. The sales representative does not need to go through all of the terms and conditions in the sales transaction situation. However, the price and any related restrictions and the key features of the service being agreed on must always be reviewed with the customer before the agreement is signed,” says Consumer Ombudsman Päivi Hentunen.
Consumers must also always receive a copy of the complete terms and conditions of agreement so that they will be aware of their right and responsibilities and will be able to act effectively in case of any dispute. It is not necessary to hand over a paper copy of the terms and conditions at the point of sale; the document may also be sent electronically, with the customer’s consent.
“Without seeing the agreement, customers cannot know what they can require from the service. In case of an error or malfunction, the customer does not have much legal protection. It should be self-evident that customers be given a copy of the terms and conditions,” says Director Johanna Juusela from FICORA.
The FCCA and FICORA have requested operators to explain what action they intend to take as a consequence of the survey findings. On the basis of responses received, the two agencies will decide on any supervisory action required.
Execution of the survey
The survey concerned three major operators: DNA, Elisa (which sells Saunalahti subscriptions to consumers) and TeliaSonera (which sells both Sonera and TeleFinland subscriptions to consumers). The survey was undertaken using the ‘mystery shopping’ method. In April and May 2014, 150 test customers purchased a mobile phone subscriptions at the operators’ own shops and points of sale in the Helsinki metropolitan area, Jyväskylä, Turku and Oulu. The survey was conducted by TNS Gallup Oy.
Merja Saari, Deputy Director, FICORA, tel. 0295 390 541
Anu Kettunen, Legal Counsel, FICORA, tel. 0295 390 536
Henriikka Rosti, Legal Counsel, FCCA, tel. 029 505 3175
Miina Ojajärvi, Legal Counsel, FCCA, tel. 029 505 3155