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Poland issues maximum $475,609 fine to Telefonia Polska Razem

Telefonia Polska RazemFor the first time in its history, the Office of Competition and Consumer Protection in Poland imposed the maximum amount of penalty for practices affecting vulnerable market participants.

The Office of Competition and Consumer Protection (UOKiK) received numerous complaints concerning the practices of PGT, a Warsaw company trading under the commercial name of „Telefonia Polska Razem.”

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The undertaking presents its offer by telephone, after which a courier visits the customer at home. The consumers, including mostly elderly people and their families, have complained about having been misled by the company.

They were led to believe that they were extending their contract with their previous service provider, whereas in fact they were entering into a new agreement with PGT.

For the above reason, the Authority has initiated proceedings against PGT and has also issued a consumer warning.

When analysing the case, the Office of Competition and Consumer Protection has verified, inter alia, the telephone conversations with consumers and has heard various witnesses – the former and current employees of entities cooperating with PGT.

The records of telephone conversations have proved that consumers were being misled as to the identity of the service provider.

Another step towards the conclusion of a contract has been the delivery of documents for signing by a courier cooperating with PGT. The courier would also lead the customers to believe that he represented the current service provider. In addition, the fact that the name of the company which was the customers’ current service provider was prominently displayed on the first page of the contract was also misleading.

The activities of PGT led the consumers to sign disadvantageous contracts. They would never have signed the contracts in question had they known that this, in fact, would lead to a change of service provider.

The conclusion of a contract with PGT resulted in the termination of the contract with the existing service provider and, in many cases, entailed the need to pay a termination fee.

The Office of Competition and Consumer Protection has also found that PGT failed to provide consumers with signed copies of contracts. This is clearly inconsistent with good practices.

A party to an agreement should always be provided with the documents confirming the terms and conditions thereof.

In this case, the result was that consumers were unaware of the fact that they concluded a new contract and that they had the option to withdraw from such contract at no extra cost within the period of 14 days.

Following the lapse of this period, the termination fees charged were between PLN 500 and PLN 1500.

In the view of the UOKiK, PGT intentionally misled its customers to maximise its profits. This has resulted in substantial financial losses on the part of consumers.

The company has failed to change its practices even after numerous customer complaints and after the proceedings have been initiated by the Office of Competition and Consumer Protection.

The Authority has failed to identify any attenuating circumstances whatsoever in the present case, which led to the imposition of the maximum penalty provided for under the provisions of applicable laws, amounting to nearly 10% of the previous year’s turnover.

The total amount of the penalty was in excess of PLN 1.97 million ($475,609).




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