The Finnish Consumer Ombudsman has drawn the attention of the law firm Capehill to the realisation of key consumer rights in a situation where consumers have had to resort to legal assistance. According to consumer contacts, the company has offered its services using unclear practices.
Several consumers contacted the Consumer Ombudsman, especially in autumn 2019, as they felt that Capehill offered its legal services on unclear terms and conditions. The reports concerned situations where consumers had submitted a contact request on the Minilex.fi website or called a number given on the website. After this, consumers had been contacted by telephone and they had been sold legal services provided by Capehill.
Based on consumer contacts, Capehill had invoiced for the service even if consumers had withdrawn the commission within the statutory withdrawal period. Furthermore, it was unclear who would ultimately have to pay for the commission. In the negotiations, the Consumer Ombudsman required that the company remedy its practices related to the provision and payment of the service, so that similar problems would not arise in the future. Capehill announced that it would make the remedies required by the Consumer Ombudsman.
The provision of the service may not be commenced during the withdrawal period without the express request of the consumer
The basic premise of the Consumer Protection Act regulation as regards telemarketing and other distance selling is that the consumer shall have the right to withdraw from the service agreement concluded by consumer within 14 days after the conclusion of the contract. The provision of the service may be commenced before the expiry of the withdrawal period only at the consumer’s request. If a business has commenced the provision of the service during the withdrawal period without the express request of the consumer, consumers are not required to pay for the provided service if they have withdrawn the commission.
Several consumers reported that Capehill had invoiced them, even though they had exercised their right of withdrawal within 14 days. The telephone recordings Capehill submitted to the Consumer Ombudsman revealed that the calls did not confirm the customers’ consent for commencing the provision of the service during the withdrawal period. Instead, Capehill said in passing that it would commence the provision of the service immediately.
In its decision, the Consumer Ombudsman emphasised that consumers must be clearly informed about the time when the service will commence and the significance of the date with regard to their payment obligation and right of withdrawal. In fact, in connection with the delivery of the phone call recordings, Capehill announced that it has clarified its processes related to commencing the performance of the contract. In addition, the company pledged that it would no longer commence the performance of contracts during the withdrawal period laid down in the Consumer Protection Act without having received an express request from the consumer for the commencement of the contract based on an active measure and conscious choice made by the consumer.
The expense risk of the commission must be clearly explained
Based on the contacts received by the Consumer Ombudsman, Capehill had not provided clear information on who would be responsible for paying the invoice of the commission. According to the reports, the calls implied that the invoice would be paid by some party other than consumers themselves, such as the State, an insurance company, or the opposing party to the dispute.
The telephone recordings revealed that Capehill was very active in marketing the opportunities of using different compensation schemes for having the invoice paid. According to the Consumer Ombudsman, this was likely to create a misleading picture of who would ultimately have to pay the invoice.
According to the Consumer Ombudsman, being informed about the various compensation schemes is in the consumers’ interest. However, when providing information about them, it must be considered that the different compensation schemes with their inherent restrictions are complicated and difficult to understand. Furthermore, a consumer in need of legal assistance is often in a vulnerable position.
The Consumer Ombudsman, therefore, required that Capehill no longer actively provide information on the various compensation schemes for covering the invoice by telephone unless it, at the same time, clearly and comprehensibly explains the limitations of the schemes and their applicability to the consumers’ situation. In addition, based on the telephone conversation alone, consumers should be able to understand the expense risk the commission would constitute for them. Capehill undertook to change its operations in accordance with the Consumer Ombudsman’s requirements.
This article is part of the Consumer Ombudsman’s Newsletter 1/2021. The article was originally published in Finnish in the Consumer Ombudsman’s Newsletter 5–6/2020