Consumer Protection Authority Proposes $660,000 Fine for HOT Net Over Billing Practices
Israel's Consumer Protection and Fair Trade Authority has announced its intention to impose a NIS 2.48 million (approximately $660,000) fine on HOT Net, a telecommunications provider. This proposed penalty stems from allegations that the company continued to bill dozens of customers for over a year after they had requested to cancel their services. The authority's action is based on a provision in the Consumer Protection Law, which mandates that continuous services must be disconnected within three business days of a cancellation request, after which billing is prohibited.
This rule applies to all ongoing services, including streaming, apps, newspapers, gyms, and water coolers, with the exception of gas services. The law specifies that cancellation notifications can be made via phone, email, fax, website, or registered mail, with the latter extending the cancellation period to six business days. For remote purchases, consumers have a 14-day window to cancel, even if the service has begun, with a cancellation fee of up to NIS 100 and a prorated charge for usage. After the 14th day, the standard three-day cancellation rule applies.
Further provisions require businesses to allow cancellations through the same method used for the original transaction, and to provide a dedicated link on their website for this purpose. The final bill must be calculated proportionally to actual usage days, and charging a full month's fee to someone who canceled mid-month contradicts guidelines from 2017 by the Consumer Protection Authority and the Ministry of Communications. Reasonable cancellation fees stipulated in contracts are enforceable, and businesses must clearly disclose cancellation rights and calculation methods beforehand.
The article also outlines a six-step process for consumers to cancel subscriptions, emphasizing the importance of documenting cancellations through emails, reference numbers, or screenshots. It highlights that continued billing after a cancellation request can lead to small claims court actions, with potential compensation of up to NIS 10,000 per case, in addition to the refund. Previous court rulings have supported consumers in cases of improper billing, including a NIS 3,000 penalty against Strauss Water for continued charges after cancellation and a case involving a gym that improperly billed a customer for two years.
Recent legal amendments require businesses to record cancellation calls and provide these recordings upon request. The article also touches upon separate issues like excessive marketing calls, citing a case where a customer received NIS 10,000 for persistent calls after requesting they stop. A separate ruling dismissed a class-action lawsuit against Yad2 concerning premium ads canceled mid-period, stating that prorated refunds are not automatic when the service was provided and the consumer achieved their objective.
