Your phone's time window

Sebastian Debono writes:

You are aware that mobile phone and Easy Line telecards are sold/bought on condition the card has to be fully used during a certain period of time because, otherwise, any unused credit is lost by the purchaser of that card. When the period of time expires, such remaining credit (which is money) becomes the property of the phone company that sold the card.

Each phone company psychologically forces the client to buy another telecard before the period of time expires in the hope that the client does not lose his remaining credit. However, in several cases, the credit keeps on increasing and increasing, and is never made use of. Obviously, at a certain point in time the ever-increasing credit once again becomes the property of the phone company.

Can you use your influence to ask each local phone company to declare its annual profit (both actual and expected) from this policy for the last few years and petition the government and the EU to condemn this policy as being illegal and to ask phone companies to stop it immediately?

Albert Galdies writes:

Are mobile phone companies in Malta operating within the legal framework of the EU when they impose time windows on prepaid talk-time?

This practice was discontinued in the UK a few years ago. How can a company force me to top up within three months (under the threat of disconnecting the service and losing my remaining credit) if I do not need to do so?

The UK regulator determined that it was unfair for mobile phone companies to oblige their "captive" consumers to top up their talk-time credit within a fixed timeframe irrespective of how the consumer was utilising his prepaid credit.

Orange UK, for example, only expect you to make a minimum of one mobile call on the Orange pre-paid network per annum (in order to maintain an active telephone number). This practice is independent of the number of calls one makes from one's mobile phone or the amount and frequency of pre-paid talk purchased in advance.

I addressed this issue in this column three years ago and stated that EU law did not regulate this matter and, therefore, there is no EU remedy that I could propose.

Nevertheless, in the light of a sustained flow of complaints on this issue, I have looked into the matter again and also raised the issue with the European Commission in a parliamentary question.

I informed the Commission that telephone companies in Malta adopt the practice whereby credit for call time bought through top-up cards is lost in favour of the telephone company unless it is used within a certain time or unless the credit is topped up through the purchase of a new card.

I asked the Commission to confirm whether this practice is in conformity with EU law.

In its reply, the Commission confirmed that this matter is not addressed in EU telecommunications law and that, therefore, it is merely a contractual matter between the operator and the subscriber.

However, the Commission did add that national telecoms regulators - in our case, the Malta Communications Authority - are required to promote users' interests by ensuring that updated and transparent information on prices and tariffs as well as on conditions of use is made available. The Commission said it is studying the issue of transparency in tariffs and conditions as part of a telecoms review, which is intended to strengthen consumer protection.

Moreover, the Commission added that contractual conditions are also subject to EU law, which protects consumers from unfair commercial practices and misleading advertising. Failing to provide clear, adequate and complete information on prices and on important elements of the services - such as the time window - may be considered as an unfair practice. Equally, contractual conditions heavily biased against consumers and in favour of the telecoms company could also be deemed illegal.

However, the Commission made it clear that it is for the national authorities and/or national courts to determine whether specific practices in Malta constitute unfair (and, therefore, illegal) practices.

So the question is whether, in Malta, MCA and the Consumer Affairs Division consider this practice as illegal or, at least, one that merits a change in our national law. I will be raising this matter with them accordingly.

I have to say that there are strong arguments which militate in favour of consumers here because it does seem unfair for users to lose their credit on prepaid mobile phones simply because their time window has lapsed.

It would indeed be interesting to learn how much revenue is being generated in this manner, as Mr Debono requests. After all, according to the European Commission, prepaid services constitute as much as 91 per cent of mobile phone subscriptions in Malta, the highest in the EU.

Finally, a judgement of a German court, which has been brought to my attention by another reader, Henrik Piski, held that time-window clauses in a mobile telephony contract are invalid because they infringe consumer rights.

I will continue to follow this issue very closely.

Ask your MEP on www.simonbusuttil.eu. Visit the new site at www.stopthedust.org.

Dr Busuttil is a Nationalist member of the European Parliament.