Main violations detected by the Consumer Rights Protection Centre:
(1) The duration of the contract is not sufficiently clearly defined in the Treaty.
For example, the Treaty States that “the Treaty shall enter into force at the time of signature and shall be concluded for an indefinite period”. The same Treaty sets the minimum duration of the Treaty at one year.
By including such clauses in the Agreement at the same time, it is not clear to the consumer what the term of the Agreement is. Such provisions, in accordance with Section 6, Paragraph two of Consumer Rights Protection Law (the CRP Law), shall be considered to be unclear contractual provisions and shall therefore be translated in favour of the consumer.
2) The contract provides for a contractual penalty (or other type of penalty) if the consumer terminates the contract before the end of the minimum term of the contract.
For example, the Treaty stipulates that:
"the Customer is entitled to terminate the contract not earlier than 8 months after the date of signing of this contract. If the customer wishes to terminate the contract unilaterally, he shall pay compensation of 8 months' subscription fees in accordance with Annex No 2 to the contract.".
“If the Customer refuses to lease the service prior to the end of the minimum term of the Agreement, it shall be considered to be a termination of the Agreement and the Customer shall pay the performer a cancellation fee in the amount of 3 subscription fees and 20.00 LVL (twenty LVL 00 Sant.) for the establishment of the Service”
Such provision shall be regarded as an unfair contractual term in accordance with Section 5, Paragraph two, Clause 5 and Section 6, Paragraph three, Clause 1 of the CRP Law, because in accordance with Section 23, Paragraph three of the electronic communications Law the user (consumer) has the right to terminate the contract without the imposition of a contractual penalty (sanctions), if he or she has received a notification from the electronic communications merchant regarding amendments to the conditions of the contract, but the user does not agree with them. Even if the consumer has entered into a contract for a minimum term, the consumer has the right to unilaterally withdraw from the contract prior to the expiry of this minimum term without the imposition of a contractual penalty, if the basis thereof is an electronic communications service that does not conform to the terms (quality) of the contract provided by the electronic communications merchant.
3) It is indicated in the contracts that an electronic communications merchant is entitled to amend the conditions of the contract by informing the subscriber thereof, however, in such cases the contracts often do not specify the time period within which the consumer is informed or a shorter time period for prior warning has been specified than provided for by law.
For example, the Agreement stipulates that "the operator shall notify the Customer in writing or by e-mail two weeks in advance of the change in the subscription fee."
"The operator shall be entitled to amend the provisions of the Agreement by giving the Customer a written notification of the amendments at least 15 (fifteen) days prior to the entry into force of the amendments."
Such provisions shall be regarded as an unfair contractual term in accordance with Section 5, Paragraph two, Clause 5 and Section 6, Paragraph three, Clause 1 of the CRP Law, because an electronic communications merchant must inform the consumer regarding amendments to the conditions of the contract and the right to terminate the contract without application of the contractual penalty not later than one month before the day of coming into force of amendments to the conditions of the contract, as provided for in Section 23, Paragraph three of Electronic Communications Law.
Regarding amendments to the conditions of the Agreement and the right to terminate the Agreement without payment of a contractual penalty, the provider of electronic communications services must notify the consumer individually in writing, which is also often not observed in the Treaties.
4) The Internet Service Agreements do not specify or indicate at all only the approximate data rate without specifying the minimum and maximum data rates.
For example, the Treaty States that the data rate limit is up to... kbit/s.
The agreement stipulates that the "executor" provides one computer specified by the Customer with an Internet connection:
- Latvian traffic speeds up to 5124 kbps.
- Foreign traffic speeds up to 512 kbps.".
In contracts, the minimum and maximum speed of data transmission should be indicated because the consumer has the right to verify the quality of the service provided. Without setting a minimum or maximum data transmission rate, the consumer is placed at a disadvantage to the protection of his interests vis-à-vis the service provider.
(5) Many treaties contain arbitration clauses (either those providing for arbitration or arbitration or arbitration at the choice of the plaintiff).
For example, the Treaty stipulates that "If the Parties cannot resolve the dispute by negotiation, it shall be settled at the choice of the plaintiff in the court of the Republic of Latvia on the basis of jurisdiction or the independent Arbitration Court of Riga, in accordance with the rules of procedure of this arbitration court in the composition of one arbitrator, in the written procedure and provided that if the defendant does not submit a reference to the claim, it shall be deemed to recognise the claim. Relations between the Parties shall be governed by this Agreement and by the laws of the Republic of Latvia".
6) The contracts do not specify the time period (hours, days) during which the temporary suspension of the provision of services takes place.
For example, the Treaty stipulates that "the operator shall not be liable for the temporary cessation of the provision of services if it is related to the maintenance of the network and the preventive or repair work necessary for the development of the network, the change of equipment or software".
Under the second paragraph of Article 6 of the CRP Law, such a provision of the contract must be regarded as ambiguous and must therefore be interpreted in favour of the consumer. It should be noted that in the Agreement, without setting a time period (in hours, days), the consumer cannot become aware of the time period during which the temporary suspension of the provision of services takes place when the electronic communications merchant carries out maintenance work or repairs of the electronic communications network.
7) A disproportionately high contractual penalty shall be included in the contracts for breach of obligations.
For example, the Treaty stipulates that "for each violation of the provisions referred to in the previous paragraph of the Treaty, THE SUBSCRIBER shall pay (…) a contractual penalty of LVL 500 (five hundred lats) and compensate (…) all losses caused in this respect".
8) For non-compliance with the provisions of the Agreement, a contractual penalty is provided for only one of the contracting parties – the consumer, without providing for any contractual penalty for the provider of electronic communications services in case of violation (non-observance) of the provisions of the Agreement, for example, does not provide the consumer with access to the Internet around the clock.
For example, the contract stipulates that "for non-compliance with the provisions of this contract, except for Section p2.3 of this contract, the PERFORMER is entitled to request a contractual penalty of up to 500 (five hundred lats) from the COMMISSIONING PARTY".
In view of the fact that the Treaty constitutes a bilateral agreement which gives rise to rights and obligations for both parties, both the service provider and the consumer, such provisions of the Treaty are contrary to the principle of legal equality between the parties, in accordance with POINT 5 of the second paragraph of Article 5 of the CRP Law, since the consumer is placed at a disadvantage vis-à-vis the service provider and contrary to the requirements of good faith, since the breach of the Treaty does not entail any contractual penalty for the service provider, a means of reinforcing the obligations, which a person undertakes to suffer as a result of his or her obligation in the event that he or she fails to fulfil that obligation or fails to fulfil it properly.
9) In the contract the service provider has provided for a unilateral right for himself or herself to amend the provisions of the contract, without providing for the right for the consumer to withdraw from the contract without applying the sanctions specified in the contract.
For example, the Treaty stipulates that the service provider "shall have the right to amend unilaterally the content of the packages provided for in the Treaty (television programme range). At the Customer's discretion, when opening a television or radio programme and/or package, the Customer shall pay the fee according to the price list."
The contract stipulates that the service provider "is entitled to determine the composition of the programme package, but the composition and prices of the package may vary."
(10) the contract lays down rules by which the service provider limits its liability towards the consumer by avoiding proper performance of the contract.
For example, the Treaty States that the service provider "shall be liable only for the intentional or serious negligence of the contract".
It should be noted that the term "serious negligence" has not been used in the laws and regulations in force in the Republic of Latvia. By such a provision, the provider has limited its liability to the consumer by avoiding proper performance of the contract.
11) the contract does not provide that the service provider shall inform the consumer individually in writing or provide another type of notification acceptable to the consumer regarding changes and amendments to the provisions of the contract.
For example, the Treaty stipulates that the service provider "has the right to amend and supplement standard terms and price lists, including: . introduce new charges and charges notified to the Customer (…) on the website: (…) at least 30 days in advance. Information on amendments and additions may also be obtained from (…) customer service (…) and authorised representatives'.
12) the contract contains a clause allowing the manufacturer, seller or service provider to retain the amount paid by the consumer if the consumer withdraws from the contract but does not provide the consumer with the same option, namely to receive an equivalent amount if the manufacturer, seller or service provider withdraws from the contract. In accordance with Paragraph 6, Paragraph three, Clause 10 of the CRP Law, such a provision shall be considered unfair.
For example, the Treaty stipulates that "subscribers MUST pay the subscription fee for cable services by no less than one month forward until the 1 day of the following month."
On the other hand, according to clause 4.5 of the Treaty: "upon termination of the contract at the initiative of THE SUBSCRIBER, the connection fee and the subscription fee paid forward shall not be returned to the SUBSCRIBER".
13) provisions included in the contract stipulate that the service provider refuses to answer for any losses caused to the consumer as a result of the provision or non-provision of the service, as well as for expenses and losses incurred by the consumer as a result of the direct or indirect use of the particular service by the consumer.
For example, the Agreement stipulates that "the Contractor shall in no case be liable for losses incurred by the Customer as a result of the provision/non-provision of the Service", "the Contractor shall not be liable for any expenses incurred by the Customer, losses incurred as a result of the Customer's direct or indirect use of the Service".
Such provisions do not satisfy the requirements of the first paragraph of Article 27 and the sixth paragraph of Article 29 of the CRP Law. Such provisions of the Agreement constitute unfair contractual provisions in accordance with Section 6, Paragraph three, Clause 1 and Section 5, Paragraph two, Clause 1 of the CRP Law, as they reduce the liability of the service provider determined by law, which is contrary to the principle of legal equality of the Contracting Parties.
14) the contracts stipulate that the service provider in the case of indebtedness of the consumer is entitled to terminate the provision of the service to the consumer (user) without warning.
For example, the Agreement stipulates that "If the Customer misses any of the payments due to the Contractor for more than 15 (fifteen) days from the expiration of the last day of the due date for payment, the Contractor has the right to terminate the provision of the Service to the Customer without additional warning/reminder."
This condition is in contradiction with Paragraph 7 of Cabinet of Ministers Regulation No. 298 of 3 July 2001, procedures by which provision of public services shall be discontinued, because the procedures by which a service provider - an electronic communications merchant may discontinue provision of electronic communications services to such consumers (users) who have not paid for the received electronic communications services or have not fulfilled other obligations to the provider of electronic communications services have not been complied with. If the user fails to pay for the electronic communications service within the specified time period or has not paid for any of the electronic communications services received, the electronic communications merchant may stop providing the electronic communications service, warning the consumer (user) thereof in writing 10 days in advance.