In December 2007 the French Parliament adopted new legislation to develop competition for the benefit of consumers. This legislation known as the “Chatel Law” updates the French Consumer Code to reflect newer technologies and aims to protect consumers using mobile and internet technology.
This article considers the terms that must be included in contracts to supply electronic communications services. It will also consider the new rules on distance selling that will affect the information that must be given to clients.
Rules regarding contracts to supply electronic communications services
The new provisions apply to internet access and to mobile phone subscriptions. These provisions attempt to protect customers by limiting the length of the contract; shortening notice periods, reimbursing sums paid in advance, and limiting the use of premium lines for support services.
Limits on the length of a contract
The new legislation reinforces the Service Provider’s obligations to keep users informed of the length of the contract. Where the contract imposes a minimum term, the supplier’s invoices must mention either:
how much of the contract is remaining;
the end date of the contract; or
the fact that the minimum term of the contract has been reached (article L. 121-84-3 of the French Consumer Code)
Companies cannot require consumers to enter into a contract for longer than 24 months (from the date of agreeing, or amending the contract). Neither can it make entering into a contract or modifying the terms and conditions of the contract conditional on accepting such a clause (article L. 121-84-6 of the French Consumer Code).
Where the contract imposes a term of more than 12 months, the supplier must:
make the same offer available to the customer for a period of less than 12 months. The price for subscription in these circumstances can be higher; but the terms and conditions of this offer should be attractive; and
offer the consumer the option to terminate the contract at the end of the first 12 months. If the customer does this it should not have to pay more than a quarter of the amount that is still due (i.e. the charge should never exceed three months’ fees, and may of course be less the more time has elapsed).
Under the new legislation, the notice period for the termination of the contract cannot be more than 10 days from the date the supplier receives the notification. However, the consumer can ask for a longer notice period ( L. 121-84-2 of the French Consumer Code).
In order to minimise disputes relating to the reimbursement of deposits and other advance payments by the consumer; the new law states that these sums must be returned to the consumer within 10 days. This period of 10 days will be measured from the date of the payment of the last invoice or from the date the device is returned to the supplier. If the supplier fails to comply with this provision, the sums owed by the supplier will be increased by 50%. (L121-81-1 of the French Consumer Code). The termination fees cannot exceed the suppliers actual cost, and these costs must be justified and expressly set out in the contract (L. 121-84-7 of the French Consumer Code).
Supplying additional services
Where additional services are offered to consumers initially for free, the supplier can only start charging for these services if the customer expressly agrees to this (article L. 121-84-4 of the French Consumer Code).
Prohibition of premium line support services
The new legislation states that any customer services, technical assistance services or customer claims services must be available through a non-geographical, fixed phone number. It cannot be a premium line phone number. Any time spent “on hold”, waiting for somebody to deal with the claim, must be free of charge, (article L. 121-84-5 of the French Consumer Code).
New provisions regarding distance selling and business to consumer e-commerce
We set out in summary some of the main provisions relating to distance selling and business to customer e-commerce. These provisions become effective from 1 June 2008.
Deadline for delivering the goods or services
Before entering into a contract, the supplier must specify when it will supply the goods or services. If it does not do so, the supplier is deemed to have delivered the goods or services at the time the contract is entered into. Where there is more than 7 days delay in delivering the goods/services the consumer can terminate the contract and claim reimbursement of any sums paid (new article L. 121-20-3 of the French Consumer Code).
Information to be provided to the consumer
Prior to this law coming into force the French Consumer Code (Article L. 121-18 of the French Consumer Code) stated that an offer must contain certain information including the phone number of the seller. However, to comply with the E-Commerce Directive the Chatel Law changed this article, stating that the supplier must provide the consumer with “phone details allowing the consumer to contact him in an effective manner”.
The supplier should also inform the consumer of any possible limit on their right to withdraw from the contract, including informing customers if they cannot withdraw from the contract. (new article L.121-18 §4 of the French Consumer Code).
Prohibition of premium line calls
A new provision is added to article L. 121-19 of the French Consumer Code stating that no additional fees should be charged to individuals wishing to “follow up on their order, to exercise their right of withdrawal or to claim under the warranty”.
Reimbursement where an individual withdraws from the Contract
Under new article L. 121-20-1 of the French Consumer Code where the right of withdrawal is exercised, the supplier must repay all sums paid to the consumer as soon as possible and at least within 30 days from withdrawal. This repayment can be made by any means (however, the consumer is entitled to choose another means of payment if it is not happy with the method chosen by the supplier).
As has been seen from the summary of these new rules, in the interest of protecting consumers, restrictions have been placed on the terms that can be put in a contract with customers. Service Providers should be aware that there are limits in France on the duration of the contract, on the notice that must be given, and additional protections in distance selling situations.