The Federal Cabinet has passed the draft law to combat unauthorised telephone advertising and so-called cost traps on the internet.
"We effectively protect consumers from unwanted advertising calls and cost traps on the internet without burdening the economy with impracticable regulations. After all, consumers are increasingly switching to ordering goods and services by telephone or via the internet. Of course, this should continue to be possible without any problems," said Federal Minister of Justice Brigitte Zypries. "In future, consumers will find it easier to get out of contracts they have concluded on the phone, and we will protect them better against contracts that have been foisted on them. Dubious companies that flout the existing ban on unauthorised telephone advertising must expect to be fined heavily. In order to better catch the black sheep of the industry, it will no longer be possible to suppress the telephone number of advertising calls. Violators will also face fines," Zypries continued.
Unsolicited telephone advertising has become a major problem: According to a survey conducted by the forsa institute in autumn 2007, 86 percent of the population feel harassed by unfair advertising calls, 64 percent of the respondents have been called by a company without consent in recent months.
Telephone advertising to consumers without their consent is already expressly prohibited under current law. It constitutes unreasonable harassment under the Unfair Competition Act (section 7(2) no. 2 UWG). Anyone who acts in contravention of this prohibition can be sued for injunctive relief by, among others, competitors or by organisations such as consumer protection associations. In addition, there is a claim for damages if the caller has acted negligently or intentionally. In the case of intentional action, the UWG provides for a claim for profit skimming. However, dubious companies repeatedly ignore this prohibition to the detriment of consumers and the enforcement of the applicable law encounters difficulties in practice.
In detail, the draft law provides for the following improvements for consumers:
- Violations of the existing ban on unauthorised telephone advertising to consumers can in future be punished with a fine of up to 50,000 euros. In addition, the law clarifies that an advertising call is only permissible if the called party has previously expressly declared that they want to receive advertising calls. This prevents callers from invoking declarations of consent that the consumer has given in a completely different context or subsequently.
- In the case of advertising calls, the caller is no longer allowed to suppress his telephone number in order to conceal his identity. Many unsolicited commercial calls are not prosecuted because it is not possible to determine who called. This is because companies usually make use of the possibility to suppress their telephone number. A corresponding ban is to be provided for in the Telecommunications Act (TKG). Violations of the ban on number suppression are subject to a fine of up to 10,000 euros.
- Consumers will have more possibilities to revoke contracts they have concluded on the phone. Contracts for the delivery of newspapers, magazines and periodicals as well as for betting and lottery services can be cancelled in the future, just as it is already possible today for all other contracts that consumers have concluded on the phone. Here, unauthorised telephone advertising is used particularly frequently to persuade consumers to conclude a contract. Up to now, there has been no right of withdrawal (§ 312d para. 4 nos. 3 and 4 BGB). These exceptions are to be eliminated. The right of withdrawal will not depend on whether the advertising call was unauthorised. The provision allows for a revocation for whatever reason.
- If the consumer has cancelled the contract in due time, he does not need to fulfil it. The withdrawal period is - depending on the circumstances of the individual case - two weeks or one month and does not start before the consumer has received an instruction about his right of withdrawal in text form (for example as an e-mail or by fax).
- The protection against contracts that have been foisted, including the so-called cost traps on the internet, will be improved:
- If the consumer has not been informed of his right of withdrawal in text form, he may in future withdraw from contracts for services concluded by telephone or on the internet. Until now, there has been no right of withdrawal in such cases if the trader has started to perform the service with the consumer's express consent or if the consumer has arranged for the service to be performed himself. Dubious entrepreneurs have deliberately exploited this regulation to foist contracts on consumers over the phone or on the internet. If the consumer cancels such a contract, he or she only has to pay for the service provided by the trader up to that point if he or she was made aware of this obligation before the contract was concluded and nevertheless agreed to the service being provided before the end of the cancellation period. This makes the subordination of contracts economically uninteresting, because businesses perform at their own risk.
Examples:
- A dubious company offers the creation of a very personal horoscope on the internet. Only the small print shows that you have to pay for it; the design of the website gives the opposite impression. There is no information about the right of withdrawal. Therefore, the consumer enters his personal data (name, address, date of birth, etc.) without hesitation. A week later, he receives an invoice for 100 euros. Only now does he realise that he has concluded a payable contract. In future, the consumer can still revoke his contractual declaration as long as he has not paid in full. If the company did not inform him before he made his declaration that he would have to pay compensation for the service provided up to that point, the company cannot claim anything from him.
or
- A consumer is called by his telephone provider and persuaded to agree to a supposedly cheaper tariff with a term of one year. Neither during the telephone call nor later does the telephone provider inform the consumer about his right of withdrawal and about the obligation to pay compensation for services provided up to that point in the event of withdrawal. The consumer continues to use his telephone as usual, but only discovers on the basis of the next three monthly bills that the supposedly cheaper tariff is actually more expensive. According to the new regulation, the consumer can still withdraw from the contract.
- In addition, the termination of a continuing obligation or the authorisation to do so in the case of a change of supplier must be in text form in the future if the new supplier acts vis-à-vis the consumer's previous contractual partner. This prevents a new provider from terminating the consumer's contract with his previous provider without a corresponding order from the consumer. This has happened frequently due to dubious providers of telephone services.Example: A telephone service provider persuades a consumer on the phone to change provider ("You save a lot of money and don't have to worry about anything"). Until now, the calling company could easily take over the settlement vis-à-vis the previous provider. In future, the termination of the contractual relationship between the consumer and his or her previous telephone provider must be in text form (e.g. e-mail, fax). The new provider can therefore only influence the existing contractual relationship if he can present such a "written document" from the consumer. In future, consumers who have not been informed of their right of withdrawal can still withdraw from the new contract even if they have already made a call via the new provider (see above).
The draft bill adopted today by the Federal Cabinet will now be forwarded to the legislature. The Bundesrat's opinion can be expected in mid-September 2008. After that, the bill will be discussed by the Bundestag. The law is expected to enter into force at the beginning of 2009. The law does not require the consent of the Bundesrat.
More detailed information on this topic is available on the website of the Federal Ministry of Justice at www.bmj.bund.de/cold-calling.
Source: Press release from the Press and Public Relations Department of the
Federal Ministry of Justice, July 30, 2008, Responsible: Eva Schmierer; Editors: Dr. Henning Plöger, Dr. Isabel Jahn, Johannes Ferguson, Ulrich Staudigl, Mohrenstr. 37, 10117 Berlin, Phone 01888 580-9030, Fax 01888 580-9046, presse@bmj.bund.de
Goldberg Attorneys at Law
Attorney at Law Michael Ullrich, LL.M.(Information Law)
E-mail: m.ullrich@goldberg .de
