Mobile Phone and Internet Consumers Rights Compliance in Romania

Iacovoiu, Viorela; Stancu, Adrian; Bucur, Crina Raluca Article Mobile Phone and Internet Consumers Rights Compliance in Romania Amfiteatru Economic Journal Provided in Cooperation with: The Bucharest University of Economic Studies Suggested Citation: Iacovoiu, Viorela; Stancu, Adrian; Bucur, Crina Raluca (2014) : Mobile Phone and Internet Consumers Rights Compliance in Romania, Amfiteatru Economic Journal, ISSN 2247-9104, The Bucharest University of Economic Studies, Bucharest, Vol. 16, Iss. 36, pp. 501-516 This Version is available at: https://hdl.handle.net/10419/168840 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/4.0/ The Protection of the Consumers Rights in an Era of Technological Changes and Globalization AE Vol. XVI • No. 36 • May 2014 501 MOBILE PHONE AND INTERNET CONSUMERS RIGHTS COMPLIANCE IN ROMANIA Viorela Iacovoiu1, Adrian Stancu2 and Crina Raluca Bucur3 1) 2) Petroleum-Gas University of Ploiesti, Romania 3) „Dimitrie Cantemir” Christian University of Bucharest, Romania Abstract This study highlights the extent to which rights of mobile phone and internet consumers are respected by the most important operators in Romania, namely Orange, Vodafone and Cosmote, in the context of accelerated technological changes on a highly competitive market. The research is focused on the analysis of regulations and contractual grievance procedures, number, distribution and motivation of consumer complaints, administrative quality indicators of data services and main consumer complaints. Among the documents under analysis we can mention contractual agreements, applicable procedures, as well as relevant empirical data provided by NAPC, NAMRC, economic operators and a site for online complaints, namely ReclamatieOnline.ro. The analyses emphasize that consumer complaints are mainly due to problems arising from contracts with service providers, billing services and defects of electronic terminals under warranty. The main cause for all this is the insufficient information users are provided with and, therefore, consumers’ decreased ability in the decision making process involved in the purchase of mobile technology and internet services. To better inform consumers, at the end of the study we propose a series of measures that could be adopted by mobile and internet service providers and regulatory, supervision and control institutions, as well as future directions of research in the field. Keywords: mobile telephony, mobile Internet, consumers rights, contractual regulations, complaints, administrative quality indicators of data services JEL Classification: D18, L86, L96 Introduction In recent years, people’s increasing need to communicate, the competition on the market of electronic communications and the progress of electronic terminals have led, on the one hand, to a technical diversification of services provided, and on the other hand, to economically more affordable services for a larger number of consumers. In Romania, although by the end of 2012 the number of “active” users of phone services (voice and messaging) and of Internet (data) over mobile networks had recorded a slight decrease (by  Corresponding author, Viorela Iacovoiu – [email protected] AE Mobile Phone and Internet Consumers Rights Compliance in Romania Amfiteatru Economic 502 2.5%) as compared to the previous year, it is still significantly higher (22.8 million) if one takes into account the number of inhabitants (about 19 million), a fact which demonstrates that the market is relatively saturated (NAMRC, 2013). It is also worth mentioning that there is a constant and significant increase in the dynamics of voice traffic, text messages (SMS), multimedia messaging (MMS), video calls and 3G data as well as in the number of smart phones users, against the background of the decrease in tariffs for the services provided by all operators and in the terminals purchase prices stipulated in promotional packages of services (Pleşea, Sârbu and Kato, 2013). Therefore, the local market for mobile telephony and Internet services is currently extremely competitive and operators have to adjust their offers addressed to such consumers who, despite an increasingly lower purchasing power, are more demanding in terms of the price-quality ratio, which explains the significant decrease in the average monthly value per user (ARPU) in recent years (Pavel, 2013). Against this backdrop of accelerated technological change on a market where maintaining the number of customers and possibly attracting new users from rival companies are imperative for existing operators, consumers face a complex and dynamic environment, in which making full use of their rights means not only observing the laws and regulations related to consumer protection, but also updating them so as to thoroughly reflect the economic and technical changes on this market. In order to highlight the extent to which the rights of mobile telephony and Internet endusers are respected, the present study places under focus the largest operators in Romania (Orange, Vodafone and Cosmote). Our research is structured on five levels of analysis: (1) contractual documents and procedures developed by the operators; (2) the number, distribution and motivations of consumer complaints; (3) administrative quality indicators of data services; (4) the relationship between the breakdown of the total number of users and the structure of complaints; (5) the main reasons for complaints. 1. Regulating the rights of electronic communications services consumers In a functional market economy, due to more intense competition, companies operating in the service sector are increasingly bound to consider consumers’ needs, requirements and expectations in terms of diversity, quality and price, since consumers are better informed and trained and therefore more demanding and they often prefer to purchase good quality services (Dinu, 2009). Consequently, this is equally the case of telecommunications companies. Thus, in order for the purchased electronic communications equipment and services to meet the user’s needs, the consumer has the right to be informed “correctly, completely and accurately” about the equipment and services quality indicators, the terms of purchase and use, about applicable tariffs and charges, terms of service activation, reconnection, equipment replacement and available options to solve any problems related to the use of equipment and services, possibilities and consequences of disclaiming the purchased equipment and/ or services, etc. (Pleşea, Sârbu and Kato, 2013). Failure to conform to quality characteristics, fees, charges, conditions and terms accepted by the user at the time of purchase due to causes attributable to the economic operator entitles the consumer to the types of compensation s/he agreed with when initiating the contact with the electronic communications services providers. The Protection of the Consumers Rights in an Era of Technological Changes and Globalization AE Vol. XVI • No. 36 • May 2014 503 In this regard, the National Authority for Consumer Protection (NACP), the main institution in charge of the supervision and control of consumer rights protection must resolve complaints “made in writing or sent by electronic mail” and addressed to the central or regional authorities (Petrescu, Dinu, Ştefănescu and Dobrescu, 2010). At the same time, the interests of end-users, either consumers or corporate bodies, are protected by the National Authority for Management and Regulation in Communications (NAMRC) through measures targeting the proper functioning of the communications market, enhanced competition, increased transparency of communications services provision, as well as the supply of information, education and counselling to end-users (NAMRC, 2013). In order to protect consumer rights, NAMRC adopted Decision no. 1201/2011 on data services provision, which stipulates the following:  a set of administrative quality indicators: time span necessary for the provision of Internet access, fault repair resolution time, end-user complaints frequency, frequency of fault-related complaints, frequency of complaints about billing accuracy, complaints resolution time;  a set of technical quality indicators: data transfer speed, transfer delay of data packages, packages delay variation, packages loss rate;  Internet providers’ obligation to publish quarterly the parameter values of the administrative indicators of quality service provision on their web pages. Regarding the handling of complaints, NAMRC may intervene whenever operators infringe consumers’ rights to information, do not provide number portability services, leave out certain items of information from the contract or do not comply with specific legislation in communications. Moreover, in some cases, this institution may arrange for the amicable settlement of litigations between users and service providers (GEO no. 22/2009). 2. Methodology In order to highlight the extent to which the three providers of mobile telephony and Internet (Orange, Vodafone and Cosmote) have put into practice their obligation to inform consumers of all aspects regarding the equipment and services provided, we analyzed documents and contractual procedures issued in 2012, published on these operators’ websites. Given the inconsistency and divergence of the data provided by the specialized agencies and the lack of complete information from mobile service and mobile Internet providers, in order to quantitatively and structurally analyse empirical data for the year 2012 we used, checked, correlated and summarized public information provided by NACP, NAMRC, the operators themselves (Orange, Vodafone and Cosmote) and a website dedicated to online complaints, http://reclamatieonline.ro/reclamatii/comunicatii-/-telecomunicatii.html (SITE). 3. Contractual documents and procedures developed by the operators The analysis aims to compare contractual documents for subscription-based services and prepaid cards as well as grievance resolution procedures, extracted from the operators’ websites as follows:  Orange: General terms and conditions for using Orange subscriptions (C); Basic Contractual Clauses (CCB); Rates and Services for PrePaid Cards (TSP); Grievance resolution procedures – individual end-users and corporate bodies (PSR); AE Mobile Phone and Internet Consumers Rights Compliance in Romania Amfiteatru Economic 504  Vodafone: General terms and conditions for individuals - 30.01.2012 (C); Main Contractual Clauses (CCP); Vodafone Card User's Guide - Terms and Conditions (CTC); Discover Vodafone Internet Card, User's Guide - Terms and Conditions (CITC); Grievance resolution procedures (PSR);  Cosmote: Contract for Subscription Services with Cosmote - first page (C1); General Terms and the General Terms for Data Services (C2); Services Annex and Data Services Annex (C3); General Conditions for Cosmote Prepaid Services, in force since February 24th, 2012 (CP); Grievance resolution procedures (PSR). Comparing the contract documents for subscription-based services (table no. 1.), one may notice: a) The similarity of the main issues included and detailed in contracts regarding: the quality parameters of the services provided; the limits of economic operators’ liability and obligations in case of poor quality services; the minimum contractual period and tacit renewal of the contract unless the consumer notifies the supplier to the contrary before the expiry of the initial activation deadline; the activation deadline of contracted services and compensation in the event of failure to meet the deadline for causes attributable to the economic operator; valid tariffs; procedures for invoice delivery, for its detailed consultation and dispute of its value; customer requirements and the consequences of noncompliance; conditions of contract termination/ withdrawal and provider-initiated amendments; customer complaints resolution procedures and times; customer agreement on the processing of personal data; Table no. 1: The main issues specified in subscription contracts The main issues Orange Vodafone Cosmote Definitions (particular meanings) C/art.1.1 C/art.1 C2 Liability of economic operator for the quality of service provided: Conditions/ limits for the operator's liability; Parameters of quality for provided services, including data services; Compensation for non-quality parameters for causes attributable to the operator; Terms to remedy faults. C/art.1.6.1 C/art.2.2.1.4 CCB (II)/6 C/ art.2.6 C/ art.14.1 C/ art.14.2 CCP (II)/7 C2/art.1 C2/art.2 C2/art.6.1-4 C2/art.6.6-7 C2/art.6.9 C2/art.7 Note1 Contract duration: Minimum contractual period; Tacit renewal of contract. C/art.1.2 CCB (I); (II)/3 CCP (I); (II)/9 C1/9; C3; C2/art.13 Activation of services: Conditions; The maximum term for activation (from the signing date of the contract)2; Compensations CCB (II)/4 C/ art.2.1 CCP (I); (II)/2 C2/art.2 The SIM card and phone number (including loss, theft and replacement of SIM card) C/art.2.1.2 and C/art.2.2.2.3 C/art.3 C/art.7 C2/art.3 C2/art.4 Billing services: Rates; Tariff plan and promotions; Manner of issuance and submission of invoice; Payment terms; Penalties for bill payment failure by the due C/art.1.7 C/art.1.8 C/art.1.9 C/art.1.10 C/art.4-6 C/art.25, Parag.A2 CCP (I) C2/art.9 C2/art.10.1 C2/art.23.3-4 C3 1 The term to remedy faults is unspecified. 2 Orange – 4 calendar days; Vodafone - 7 days; Cosmote – 7 working days. The Protection of the Consumers Rights in an Era of Technological Changes and Globalization AE Vol. XVI • No. 36 • May 2014 505 The main issues Orange Vodafone Cosmote date; Suspension of service/ termination of contract for bill payment failure; Consultation of invoice information and applied tariff plans; Challenging the bill. CCB (I) CCB (II)/5 CCB (II)/10 CCP (II)/3 CCP (II)/4 CCP (II)/9 Suspension and/ or restriction of the provision of services; Reconnection (terms and conditions). C/art.1.11 CCB (II)/7 C/art.2.2-5 C/art.6.3-4 C2/art.6.5 C2/art.10 Provider-initiated amendments to contract: Notification of amendment agreement; Terms; Withdrawal if the customer does not agree with the amendment. C/art.1.19 C/art.1.17 para.1/ltr.a CCB (II)/7 C/art.4.4 C/art.13 CCP (II)/6 C2/art.9.13 C2/art.21 Termination/ withdrawal: Provider-initiated/ Customer-initiated; Costs. C/art.1.16-17 para.1/ltr.a,b CCB (II)/8 C/art.9-10 C/art.11.3; 13.2 CCP (II)/5 C2/art.14 C2/art.15 C2/art.16 Disputes/Complaints: Amicable settlement; Complaints solution time span, Resolving disputes not settled amicably. C/art.1.14 CCB (II)/9 C/art.25 Sec.(A) CCP (II)/8 C2/art.6.8 C2/art.23 C2/art.24 Customer undertakings and obligations3 on: Using the equipment and services supplied by the operator; Bill payment etc. C/art.1.6.2 and C/art.2.2.1.3 C/art.7.1-3 C/art.11.1; 15 C2/art.8 Unlocking/ decoding terminals (conditions) C/art.1.20 Note4 - Processing of personal data (including customer agreement) C/art.1.15 CCB(I);(II)/10 C/art.16; CCP (I); (II)/9 C1/8 C2/art.22 Porting - CCP (II)/2 C1;C2/art.2.5 Source: Orange - C, CCB, Vodafone - C, CCP, Cosmote - C1, C2, C3. b) Some operators do not mention in the contractual documents issues considered by other service providers to be essential for consumers, such as: the term to remedy faults (Cosmote), conditions related to decoding terminals (Vodafone and Cosmote), terms and conditions related to number portability (Orange and Vodafone), the clear specification of terms/ durations in calendar days and/ or working days (Vodafone - Article 2, 4, 5, 7, 9, 13, 16, Cosmote - Article 2, 6, 7, 9, 13, 14, 15, 16, 19, 21, 23 from the General Terms for Data Services); c) None of the operators in the section dealing with amending the contract (Orange - art.1.19; Vodafone - Article 13; Cosmote - Article 21) mentions the legal issues related to changing the tariff plan during the contract period, at the initiative of the service provider and with the customer's verbal consent expressed by means of electronic communication (for distance contracts), in which case the regulations in GEO no.111/2011 are to be observed; 3 Including the obligation of the consumer not to use the network in a way impinges upon a third party. 4 Conditions and tariffs are specified in the document “Unlocking terminals in the network” which can be retrieved from https://www.vodafone.ro/libs/documents/digital_asset/v080064.pdf AE Mobile Phone and Internet Consumers Rights Compliance in Romania Amfiteatru Economic 506 d) There are different approaches to drafting contractual documents and their presentation to the customer at the moment of service purchasing, in the sense that Orange and Vodafone operators write out two separate documents, one containing detailed contractual clauses (TCG), to be submitted to consumers only upon request, while the other one states the tariff plan and presents, in brief, only those clauses rated as significant by suppliers (CCB/ CCP) and is to be signed by the customer; the situation is different with Cosmote, which submits to end-users full-version documents, to be acknowledged and signed. Comparing similar documents representing contracts for prepaid services (table no. 2), one may notice the following aspects: a) Only few items are presented and detailed by all operators, namely those related to the SIM card (activation/ recharge/ replacement), the telephone number, the initial credit, options and tariffs, the suspension and/ or restriction of the provision of services, unlocking terminals and prepaid services; Table no. 2: Terms and conditions for prepaid cards services The main issues Orange Vodafone Cosmote Definitions (particular meanings) - -  Economic operator’s liability for the quality of the service provided (similar to subscriptions) -   Activation of the SIM card, telephone number, initial credit    Options and tariffs offer    Recharging the SIM card    Conditions for the replacement of the SIM card  -  Suspension and/ or restriction of service provision    Amendment to of conditions, fees and charges -   Liability of the parties (operator, customer) -   Unlocking terminals (conditions)    Prepay services (call numbers, tariffs)    Processing personal data -   Solutions to complaints/ Compensation -   Porting - -  Source: Orange - TSP; Vodafone – CTC, CITC; Cosmote – CP. b) Orange and Vodafone do not mention in these documents a number of elements that are specified in their own subscription contracts as well as in the document prepared by Cosmote for prepaid cards customers. In this category we mention the following: the meaning of the terms (Orange and Vodafone), the economic operator’s liability for the quality of the services provided (Orange), the conditions for the replacement of the SIM card (Vodafone), the amendment to conditions, fees and tariffs (Orange), the liability of parties (Orange), the processing of personal data (Orange), solutions to complaints (Orange), terms and conditions related to number portability (Orange and Vodafone); c) The document drawn up by the economic operator Cosmote is characterized by ambiguity and lack of unity in expressing terms/ duration in calendar days and/ or working days, similarly to the contract for subscription-based services. Thus, in some articles the reference to “working days” or “calendar days” is clearly stated (Art. 7.3, 13.2, 15.2), whereas in others only “days” is mentioned (Art. 4.3, 7.2). The Protection of the Consumers Rights in an Era of Technological Changes and Globalization AE Vol. XVI • No. 36 • May 2014 507 Comparing contract documents prepared by the three operators for subscription-based services with those for prepaid services, one notices the lack of unity in the information presented to users, although there is no difference between the two categories of consumers as regards their rights. Thus, the service providers Orange and Vodafone do not disclose to users who have paid in advance for the services (prepaid cards) some essential information, as detailed above (table no. 2 and paragraph 2), which is however included in subscriptionbased contracts. At the same time, consumers who pay in advance for services purchased from Vodafone and Cosmote benefit, through contractual documents, from detailed information (requirements, fees) about the unlocking of terminals, as opposed to subscription-based users, who are not informed about such aspects in the contract with the economic operator. A similar situation occurs in the documents prepared by Cosmote for the term of remedying faults (24 hours), which is mentioned only in contracts with prepaid cards users. It is also worth remarking that the three operators have different approaches to the specification of number portability, both for subscription and prepaid services. Orange does not make any claims in contractual documents analyzed above, but presents on its own website5 information about porting numbers from other mobile networks to its subscription or prepaid services (porting documents necessary for registration, term of activation of the ported number, porting fees, possible alternatives, informing the customer about the status of the porting process, cancellation of the porting request) and porting from Orange to other mobile networks (the necessary documents, cases when the porting request is rejected, loss of credit and of all the benefits for prepaid cards). In this regard, we note that none of the clauses related to the customer-initiated contract termination/ withdrawal (art.1.16, para. (2) and art.1.17, para. (1) ltr a, from TCG; art. 8 from CCB - Part II) contains specifications about porting Orange numbers to other networks. In CCP (II)/article 2, the economic operator Vodafone only mentions the activation date for subscription ported numbers in the Vodafone network, presenting on its website6 exclusively data and information (such as promotional offers, the porting and cancellation of porting request form, information on porting, benefits, etc.) referring to porting from other networks, mobile or fixed, to its network. Unlike these two competing companies, Cosmote presents its subscription and prepaid services consumers with complete and detailed information, both in the above mentioned contract documents and on its website7. When comparing the grievance procedures developed by the three operators (table no. 3), one may note their similarity in terms of the main issues raised, that is in terms of the modalities and the maximum term for formulating complaints, the maximum term for solving complaints, the manners of provision of information to customers and of dealing with complaints that have not been solved amicably, but also some differences, namely: a) Orange and Cosmote do not mention the maximum term to resolve complaints for terminals and accessories that are covered by warranty, which, according to GEO no. 174/2008, should not exceed 15 calendar days; 5 http://www.orange.ro/services/portabilitate-ro.html 6 https://www.vodafone.ro/personal/servicii-si-tarife/alege-vodafone/portabilitate/index.htm#tab-1 7 http://www.cosmote.ro/ro/portability.aspx?style=styles&ns=-10000&noparent=17072&cid=19685 AE Mobile Phone and Internet Consumers Rights Compliance in Romania Amfiteatru Economic 508 b) Vodafone does not make a clear-cut distinction between calendar and working days when establishing the maximum term for resolving complaints about terminals covered by warranty and has no explicit procedure for follow up on lodged complaints8. Table no. 3: Grievance procedures The main issues Orange Vodafone Cosmote Filing verbal complaints (individuals and corporate bodies)  phone  the shop  phone  phone Filing written complaints (individuals and corporate bodies)  post  fax  the shop  e-mail  post  fax  the shop  e-mail  Internet  post  fax  the shop  e-mail  Internet Content of complaints (obligatory elements) NOT YES YES The maximum term for filing complaints 9 in the case of : - customers with prepaid services - customers with subscription - calls cost (invoice) - non-functional services 30 cd 30 cd 30 days 30 cd 15 cd The maximum term for solving the complaint 10: - customers with prepaid services - customers with subscription - provided services - terminal/ accessories warranty 60 cd 30 cd 30 wd 15 days 30 cd Contacting customers about filed complaints (follow up on a resolution by the provider)  post  SMS  e-mail Unclear  phone  post  e-mail Resolving complaints that have not been amicably solved (by the provider)  NAPC  NAMRC  court  regulatory  court  NAPC  NAMRC  court Note: cd - calendar days, wd - working days. Source: Orange - PSR; Vodafone - PSR, Cosmote - PSR. 8 In connection with follow up, it is mentioned through “any of the delivery means mentioned above”, while “above” only gives details about the ways to file complaints. 9 It is calculated from the date of the event/ issuance of invoice. 10 It is calculated from the date of filing the complaint/ returning the faulty equipment to the collection point. Vodafone may also extend the term for resolving complaints by 30 working days, notifying the customer about this, in exceptional cases, which are however not explicitly specified, which may give rise to abuses. A similar specification appears in the Cosmote contract for complaints that cannot be resolved within 30 calendar days, in which case within 5 working days from the expiry of the initial deadline the customer must be informed of the status and the complaint solution time span. The Protection of the Consumers Rights in an Era of Technological Changes and Globalization AE Vol. XVI • No. 36 • May 2014 515 and conditions of the purchase and the use of services, and, therefore, do not allow consumers to choose the provider, services and equipment that best meet their needs. In view of the above, in order to protect consumers' fundamental rights as guaranteed both by the European Directives and the national legislation, the operators Orange, Vodafone and Cosmote should initiate a series of measures aimed at better informing end-users by overtly presenting complete and accurate information in a form easily understood by consumers. In this context, since information concerning the extent to which service providers comply with the undertaken contractual obligations and highlighting effective complaints management and compensation procedures is not made known to users by operators, we consider that regulatory, supervision and control institutions should provide users with relevant and detailed information on these issues in an accessible form. A first step in this direction was taken through the adoption by NAMRC of Decision no. 1201/2011, addressing the provision of data services. In our view, the calculation of administrative quality indicators and the service providers’ obligation to publish quarterly the values of these indicators on their web pages could be extended to other types of electronic communications services (such as mobile telephony and television). Provision of comprehensive information to consumers could be achieved through regular (annual) disclosures by NACP of useful information about filed complaints, resolved complaints and compensation (such as the number of complaints filed with each operator and the number complaints resolved to the consumers’ benefit, the compensations received etc.). Also, given the large number of consumer of telephone and mobile Internet services, it is necessary that NACP should initiate a campaign to educate people about the main causes of complaints as presented herein. In the light of this study, the analyses in this paper can be extended to other categories of services and supplemented by research showing users' perception of the relevance, usefulness and accessibility of the information offered both by service providers and specialized institutions in charge of informing and educating consumers. References ANCOM, 2013a. 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