The President of UKE imposed a financial penalty amounting to PLN 1 million on Tele2 for breaching its information obligations.
On 12 September 2006, the President of the Office of Electronic Communications (the President of UKE) launched administrative proceedings against Tele2 Polska Sp. z o.o. (Tele2) for breaching information obligations towards end users when concluding contracts for the provision of telecommunications services. As a result of the proceedings the President of UKE issued a decision imposing a financial penalty of PLN 1,000,000 on Tele2 paid to the state budget.
Procedures for attracting new customers
Tele2 applies three forms of selling telecommunications services, i.e. concluding contracts away from business premises, concluding contracts via phone, and concluding contracts via other means of distant communications. As explained by Tele2, the basic sale channel involves contracts concluded away from business premises. Specialised entities contracted by Tele2 operating under permanent agency agreements are involved in the process of attracting new customers. Currently Tele2 cooperates in its selling activities with a dozen or so commercial partners.
The partners of Tele2, when carrying out their activities, are obliged to apply procedures defined by Tele2. Sales representatives exercising direct sales are obliged to use materials produced by Tele2, i.e. a contract for the provision of telecommunications services, Rules and regulations for the provision of telecommunications services by Tele2, tariff pages as well as additional materials.
For contracts concluded via phone, the process of attracting new customers involves telemarketing companies contracted by Tele2. Telemarketers selling Tele2’s services call the subscribers of Telekomunikacja Polska S.A. encouraging them to conclude contracts for the provision of telecommunications services by Tele2.
The evidence gathered by the President of UKE has shown that when attracting new customers via phone, the partners of Tele2 failed to give full and reliable information resulting from the fact that the contract was concluded away from business premises. The patterns of conversations defined by Tele2 were not fully respected during the process of attracting new customers via phone. In particular:
Following a conversation held in this manner, the customer of Tele2 when receiving materials accepted during the phone call, and convinced that he/she was only confirming receipt of a letter, in fact signed a pre-selection order in favour of Tele2. Thus the subscriber was in a way confirming in writing that there was a relationship between him/her and Tele2, at the same time ordering that all his/her calls should be routed to Tele2’s network. The misled customers were using telecommunications services by the time they received the first invoice from Tele2 not even being aware that they switched to another provider without their explicit agreement.
As a result of practices exercised by Tele2 end users received invoices from Tele2 for services they had not ordered or for which they had no intention to conclude a contract. These facts are confirmed by consumer complaints filed with the President of UKE and evidence in the form of a TV programme Uwaga recording – depicting the methods in which subscribers were attracted by Tele2.
Tele2 has indicated that due to the scale of their operations it was not possible to eliminate all cases of unfair practices exercised by sales representatives hired by Tele2’s subcontractors (e.g. forged signatures on pre-selection contracts in order to obtain under false pretences remuneration from Tele2 for the conclusion of contracts).
The breaches of the Telecommunications Act indicated in the above occurred directly in relations between Tele2’s partners and end users. Nevertheless, it must be pointed out that Tele2 is responsible for its commercial partners and should recruit them and execute their commitments in a manner enabling that all performance standards and conditions defined in the law should be met.
The amount of a penalty
When setting the amount of a penalty the President of UKE took into account the performance of Tele2 until now, the scope of a breach, the importance of this case for the protection of end users’ interests, the scale of misconduct and the fact that Tele2 had not been fined under the Telecommunications Act before. Not without importance in this case was the fact that Tele2 showed good will, closely cooperated in the course of proceedings exercised by UKE and was making an effort to remedy the situation in the interest of their customers. These circumstances showed that bad practices as indicated in the decision of the President of UKE would be abandoned.
The company also undertook constructive action in order to eliminate deviations from the standard procedures of attracting new customers, in particular by means of contracts concluded away from business premises. Having revealed deviating practices applied by one of its subcontractors, the company terminated a contract with this partner.
In addition, Tele2 informed that it had launched a remedial programme aimed at improving the quality of customer service including such elements as: recording and storing of all sales calls, permanent monitoring of calls, changes in the format and content of documents used in telemarketing, improving the effectiveness of a verification call, tests for telemarketers, verification procedure for agents and information campaign targeted at customers. The company also launched a special line to report all inappropriate practices of sales representatives offering services on behalf of Tele2.