Consumer Authority fines Pretium Telecom for telephone canvassing

The Consumer Authority has determined that the canvassing practices of Pretium Telecom are in violation of the law. As a result, the Consumer Authority has fined Pretium Telecom a total of EUR 87,000, for the manner in which the company canvasses customers via the telephone for landline telephone subscriptions. In addition, the Consumer Authority has imposed three penalties on a daily basis in order to ensure that the company brings its canvassing practice into line with the rules imposed by law.

Background to the decision

Pretium Telecom uses external call centres that are contacting consumers on a large scale without prior notification, with the offer of a landline telephone subscription. Since the beginning of 2007, the Consumer Authority has been receiving a large number of complaints and reports via a number of channels, such as ConsuWijzer, regarding the manner in which Pretium canvasses customers.

When selling subscriptions to customers via the telephone, the statutory rules governing distance selling apply. After an exhaustive investigation, the Consumer Authority reached the conclusion that Pretium Telecom did not state clearly at the beginning of the telephone conversation the company with whom the customer was speaking and the purpose of the call. Furthermore, the caller did not provide the customer with sufficient information regarding the subscription and how to cancel this subscription. The welcome letter which the customer received later contained incorrect details regarding the possibility to terminate the subscription that is required by law, and, in so doing, seriously restricted the customer in terms of his/her rights.

Fines amounting to a total of EUR 87,000 were imposed for these violations. In order to bring a quick end to the violations that are still ongoing and to ensure that Pretium Telecom adheres to the rules in the future, three penalties were imposed on a daily basis. Pretium Telecom must bring an end to these violations within the period of time stipulated, otherwise the company will be liable to pay a penalty. In the meantime, Pretium Telecom has registered an administrative appeal against the decision. This will not, however, cause the imposed measures to be suspended.

Proceedings

The Consumer Authority reached its decision on 4 December 2008 and informed Pretium Telecom of its decision to make the matter public. Pretium Telecom wanted to avoid this by instituting legal proceedings. However, Pretium Telecom did not await the judge's verdict, which was expected to be delivered next week. Yesterday evening, Pretium Telecom brought a halt to the proceedings that it itself had instigated. Today, the company placed a full-page advertisement in numerous regional papers regarding the decision reached by the Consumer Authority. By doing this, the silence imposed on the Consumer Authority that prevented the publication of the content of the decision no longer applies. The text of the decision will be published on Monday 9 March at 14:00.

Marije Hulshof, Director of the Consumer Authority states: "Exhaustive investigations have indicated that Pretium Telecom has not adhered to the rules that govern telephone canvassing. Many customers have agreed to a subscription on the basis of incomplete or confusing information. We are therefore imposing a sanction as well as measures that will prevent a repeat of this in the future."