FCCA and Consumers’ Association of Finland: Agreements made over the phone only valid after separate consent

According to the Finnish Competition and Consumer Authority and the Consumers’ Association of Finland, problems related to telemarketing would decrease significantly, if Finland introduced separate consent to agreements as the Directive of Consumer rights would allow. However, a report submitted today by the Ministry of Justice states that there is no well-founded reason for this.

The Finnish Competition and Consumer Authority and the Consumers’ Association of Finland have taken part in the work of the Ministry of Justice working group, which has prepared a proposal to enforce the Directive on Consumer Rights. According to an article in the directive, member states shall have the right to legislate that a consumer has only committed to a telemarketing agreement after he/she has consented to the agreement in writing i.e. by text message, email or letter.

The Ministry of Justice has come to the conclusion that there are no grounds for requiring consent and that this will not be introduced in Finland. The Finnish Competition and Consumer Authority and the Consumers’ Association of Finland have submitted a dissenting opinion on the Ministry of Justice report.

“Over the last three years consumer authorities and the Consumer’s Association of Finland have been contacted nearly 7,000 times with regard to problems with telemarketing. A large number of complaints concerned situations in which consumers have not understood that they had entered an agreement during the phone call, but believed that they had only ordered a free introductory package or requested an offer. Giving consent to agreements would help cut down on such problems,” says Katri Väänänen lawyer for the Finnish Competition and Consumer Authority.

A considerable amount of natural remedy and undergarment sales are carried out through telemarketing. However, in addition to these, a growing number of more complex agreement types, such as those for broadband internet connections, pay-TV packages and electricity are carried out over the phone.

“The salesperson is not necessarily able to cover all the essential points related to the agreement over the phone, and therefore the consumer does understand what they have committed to. Often, the most important thing for a salesperson, who works on a provisions basis, is to produce as many agreements as possible, in which case essential information may be lacking,” explains Tuula Sario Lawyer-in-Chief for the Consumers’ Association of Finland.

Although legislation has clear regulations for what a salesperson must tell a client over the phone, companies do not always abide by these. On the basis of a request by the Consumer Ombudsman, the Market Court prohibited telecommunications operator Saunalahti from using illegal practices in telemarketing in 2010 and made the same decision with regard to electricity company Market Energia in 2011.

Self-regulation has not eliminated the discrepancies in telemarketing either. The Finnish Direct Marketing Association (ASML) has developed a service that has made it possible for consumers to limit the amount of telemarketing they are subjected to. However, a large number of companies that do not abide by the industries rules fall outside of this limitation service.

Many European countries have already or will introduce separate consent for telemarketing agreements. For example, according to the Norwegian Consumer Ombudsman, introduction of separate consent has seen a significant drop in the number of problems related to telemarketing in Norway. Denmark in turn has instated a model that requires that telemarketing customers give advance consent in the same way they do for direct marketing.