ComReg has issued a warning to a telecommunications company following steps taken by that company to move mobile phone customers over to e-billing without prior notice. The telecoms regulator found that the company failed to comply with its statutory obligation to notify customers of proposed changes to their contracts and failed to advise customers of their right to opt out of (or reject changes to) their contracts.

The company began moving 207,000 mobile-phone customers from paper billing to e-billing in August 2013. That move attracted criticism from consumer groups. Particular concerns were raised about elderly customers who may not have been comfortable with the switch.

In its decision, ComReg specifically referred to a regulation which, in effect, requires the company to notify subscribers of proposed modifications to contractual conditions and to advise subscribers of their right to withdraw without penalty from the contract if they do not accept the proposed change.

The company has expressed its disappointment with the position taken by ComReg, noting that customers could have opted-out of the proposed change by replying to notices that they received by email or text message. 

Insurance companies should be aware that they are subject to similar laws and regulations that protect consumers from unfair contractual terms. An unfair term could, for example, be one that allows the insurance company to unilaterally alter the terms of a consumer contract without a valid reason that is specified in the contract. Failure to comply with those regulations could have the effect of making the offending term (and, potentially, the insurance contract) unenforceable against the consumer.

The Consumer Protection Code (the “Code”) also contains requirements that will be relevant where an insurance company is considering unilaterally amending its contract with a consumer.  Insurance companies must always consider both the general provisions of the Code and those provisions that specifically cover matters relating to insurance products.

Contributed by: John Magee