Proposition 51K2790

Projet de loi modifiant la loi du 14 juillet 1991 sur les pratiques du commerce et sur l'information et la protection du consommateur, en ce qui concerne la reconduction tacite de contrats à durée déterminée.

General information ¶

Submitted by

PS | SP MR Open Vld Vooruit Purple Ⅰ

Submission date

Dec. 6, 2006

Official page

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Status

Adopted

Requirement

Simple

Subjects

consumer protection contract

Voting ¶

Voted to adopt

Vooruit Ecolo LE PS | SP Open Vld MR

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Discussion ¶

March 1, 2007 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, Mrs. Minister, Mr. Secretary of State, colleagues, the committee discussed the draft law at its meetings of 23 January and 6 February 2007.

In its introductory presentation, the Minister pointed out that the draft law aims to provide a special protection to the consumer in the event that a service contract for a fixed duration would be tacitly renewed. In fact, the problem of fixed-term contracts which provide for a silent renewal consists in the fact that consumers who do not oppose a silent renewal in time are currently under the current regulation obliged to re-bind themselves to the contract for a certain period, without having a possibility of cancellation.

The number of service contracts concluded by consumers with such a clause of silent renewal is constantly increasing. Just think of gsm subscriptions, tele-distribution and internet connectivity subscriptions, and fitness subscriptions.

Such contracts usually contain a clause of silent renewal, which we, by the way, always find in the so-called small letters. The responsibility for the silent extension lies with the consumer. If he or she does not terminate the contract in time, he or she remains bound again for a certain, often long period.

Therefore, the Government believed that there was an urgent need for additional consumer protection. Therefore, a draft has been submitted, which has the following content.

The design provides a further enhancement of consumer protection in two aspects. First, the consumer can terminate the contract at any time, provided that a termination period of not more than one month is observed. Secondly, in order to correctly inform the consumer, the clause of silent renewal in the contract should be clearly and in greasy printed in a frame on the front of the first sheet.

Therefore, it was not opted to require the seller of services to remind the consumer himself in time that it is possible to object to such a renewal. The government believed that this could bring too much administrative burden.

It is not desirable to require the consumer to maintain and pay for a service if he or she no longer wishes to do so. Therefore, it is good to use a smooth resignation formula. The service provider itself is also not served with an unwanted agreement in the long term.

During the general discussion Mr Koen T’Sijen first spoke on behalf of sp.a-spirit. He pointed out the actual imbalance between the consumer and the seller in the case of an agreement with silent renewal.

He therefore referred to his own bill on the subject, which used a different philosophy. In his bill, he was based on the same finding, namely that today the consumer is flooded with a very large number of contracts containing a silent renewal clause. We think of car insurance, fire insurance, GSM subscriptions, TV connections, Internet connections, electricity and water, not to mention the book or CD clubs. Therefore, Mr T’Sijen had, in his bill, in analogy with the French regulation, provided that it would be the obligation of the seller to remind the consumer, no earlier than three months and no later than one month before the date fixed as the deadline for termination, that if he or she does not inform at that time, the contract is silently renewed.

Therefore, it would impose a greater obligation on the seller.

On the basis of the bill proposed by colleague T’Sijen, a number of hearings were also organized, which highlighted a number of critical comments. For example, we heard, among other things, that insurance contracts would actually be better excluded from the scope of the bill. Furthermore, the information obligation as stipulated in the bill-T’Sijen could cause a lot of administrative burden.

Hence, Mr T’Sijen was able to agree with the philosophy and content of the draft under consideration that he would have liked to see an extension of the scope of the draft, from services to products.

He submitted two amendments in this regard. A first, far-reaching amendment was intended to extend the scope to all products. A second, less extensive amendment was intended to extend the scope of application by giving that power to the King. Two other amendments were submitted, which were still withdrawn during the discussion after sufficient explanation by the Minister.

Collega Creyf of CD&V was able to agree with the purpose of the design but formulated a number of concerns. In particular, there were concerns that were also expressed by the distribution sector and the mid-range at the Consumer Council. They feared that the bill would result in an administrative surcharge and that the one-month notice period would be too short. Furthermore, in the distribution and medium-sized sectors, there were fears that this possibility of cancellation would extend the duration of the contract by many sellers, which in fact would not serve the consumer.

At the end of the meeting, Lano from the VLD also asked for the word. He made approximately the same consideration on behalf of his group, in particular that it might go a little too far if the tacitly extended agreements of a fixed duration were cancellable at any time. As a result, the agreement of fixed duration would de facto turn into an agreement of indefinite duration.

On behalf of the PS, Mrs Ghenne expressed her agreement with the present draft.

Finally, colleague Paul Tant also asked for more clarity on the delegation of powers to the King provided for in the draft, as well as more clarity in the wording of the title of the draft.

In the discussion, the Minister responded that the draft applies only to service contracts, not to product contracts, in analogy with French law. However, the Minister agreed to include in this draft that products or categories of products could also fall within the scope of the draft law through a decision discussed in the Council of Ministers. De facto, the second amendment of Mr T’Sijen was adopted in the committee.

The final vote in the committee resulted in the unanimous adoption of Article 1. Amendments 1 and 3 were repealed. Amendment 2 was adopted. Amendment 4 was repealed. Eventually, the entire draft, as amended, was adopted with 8 votes for and 3 abstentions. Consequently, the linked legislation disappeared.

Colleagues, I propose to hold a discussion for the bill and the bill. Only one report was issued.

The following speakers have been registered for the general discussion: Mrs. Creyf, Mr. Van Roy and Mr. T'Sijen, author of the bill.

Mr. Speaker, Mrs. Minister, Mr. Minister, colleagues, the draft law on the silent extension contains two provisions. In the first place, it is a formal requirement relating to the clause of silent extension. That clause shall be contained in fat printed letters and in a frame separate from the text on the front of the first page of the agreement.

In addition, it provides that the consumer, after the silent renewal of a service contract, can terminate it at any time without compensation, subject to a notice period of up to one month.

We recognize the problem of the silent renewal of contracts of certain duration in the provision of services. We were also in favour of something going on. It is often impossible for the consumer to see through the forest the trees and know when he must terminate which certain service contracts for a certain duration and then eventually conclude a new agreement with another supplier.

Such an agreement can only be terminated in definite periods, which the consumer sometimes does not know, but may more often lose sight of. The number of agreements by which a consumer can be bound today is indefinite. It is then about all sorts of contracts such as for example for internet, mobile phone, fitness clubs and so on.

We were also willing to do something about the problem, testifying to this the fact that CD&V the bill no. 1803 of Koen T'Sijen, which addresses the same problem but addresses it in a different way, has also signed with.

The proposal of colleague T'Sijen provided that the service provider should inform the customer of his right to terminate the contract three months before the beginning of the period in which can be terminated, for example by mail. I say this to show that this problem really removes our concerns.

However, the bill provides for a different remedy for the same problem. The draft law allows that any agreement that is tacitly renewed from the renewal at any time can be terminated with a period of one month. It is remarkable that this solution resulted in a totally divided opinion of the Consumer Council. Representatives of the production, distribution and middle class opposed this draft, while the consumer organisations agreed.

I will not repeat all the points of criticism. We have already done this extensively during the discussion in the committee. An important argument, Mrs. Minister, which was put forward in the opinion of the Consumer Council by the representatives of the production, distribution and middle class, I do not want to remember you. It is also interesting to listen to them. According to these representatives, on the basis of this bill, people can terminate their agreements unilaterally, without compensation, and quasi from one day to the next. For the representatives of production, distribution and the middle class, this is far-reaching. Important to know is the following. They say that the companies they represent may be inclined to extend the initial duration of the contracts. Instead of offering 1-year contracts, they may offer contracts for 2, 3 or even more years in the future.

This means that the bill, however well-intentioned, could possibly have a counterproductive effect, as the companies could thus turn back the whole system of the silent extension. A measure aimed at promoting consumer mobility and making it easier to switch from one supplier to another may actually result in the consumer being bound by the same supplier for a longer period of time.

In addition, we have a very difficult situation with the fact that the King is given very broad powers in the field of law enforcement. The King may not only exclude certain services from the scope of application. The King may, in other words, decide tomorrow which service contracts cannot be terminated after the renewal. In addition, through an amendment supported by all majority parties, the scope of the law is also extended to all products, not only services, which the King designates. The bill was intended only for service contracts. The King can now also subject to law certain product contracts which he designates.

What is it that is being voted on here? The draft law states that service contracts for a fixed duration will be subject to special rules relating to the silent renewal of contracts. However, the King can decide who he excludes from this. We have asked which he can exclude, for example, but we have not received a response.

However, the King can not only limit. He may also say tomorrow that the law will be extended to product agreements. We asked about which it could be, but we received no answer.

For the legal certainty of the companies concerned that offer services, which offer products, it is, of course, a ⁇ bad thing. For us, it is ⁇ not an example of a good way to offer companies in our country a stable and certain legal framework. No company that offers services knows whether it will actually fall under the legislation tomorrow. A company that offers products does not know whether tomorrow may also fall under the law.

This is a few points of criticism. Because of these points, namely the risk of the counterproductive effect and, on the other hand, the far too wide assignment of authority to the King, we have decided to abstain. The problem is close to our heart, but what appears here, on the other hand, raises too many concerns to be able to vote for without reservation. We have therefore decided to remember.

We aim to make consumers more aware of the consequences of silent renewal and to provide them with adequate protection. However, this law shows too many gaps and, above all, a total lack of transparency.

Mrs. Minister, I have another practical question. How does this new obligation to translate the clause of silent extension in the fat printed in a frame on the first page of the agreement relate to other already existing legislation, and more specifically to the Royal Decree of 13 January 2007 on the use of certain clauses in the mediation agreements for real estate agents? This royal decree, specifically for real estate agents, also provides for a reduced notice period in the event of silent renewal, but not in such a specific clause. Should the contracts of real estate agents also include a clause of silent renewal, in the fat printed in a frame on the first sheet of the agreement? So do they fall into this or not, given that there is a royal decree that regulates other matters? This question is asked by the industry. It would be good for the legal certainty that this question also gets a clear answer, Mrs. Minister.

Today, there are many fixed-term contracts that include a tacit extension clause. I think of GSM subscriptions, internet connections, teledistribution, etc.

Only, this clause is often ignored by the consumer as it is often lost in many general conditions. In addition, this clause varies from contract to contract and it is easy for the consumer to get lost and let the termination period pass without being able to act.

This situation has as a consequence that the consumer rarely opposes the renewal of the contract in time and therefore finds himself again bound, with all the financial consequences that this entails.

However, it cannot be denied that the tacit renewal of a contract also constitutes a kind of security for the distracted or negligent consumer. Indeed, the provision of certain services would cease suddenly in the absence of tacit renewal, with all the disadvantages that this implies.

Therefore, I can only welcome the balance established by the bill, as it allows the consumer to terminate his contract at any time, provided that he respects a notice of at least one month, a possibility that can only stimulate competition by allowing the consumer to take a certain role in the free market.

Furthermore, since the contract must mention the tacit renewal clause clearly, in greasy characters in a frame at the rectum of the first page, the seller is not obliged to otherwise inform the consumer during the performance of the contract. This prevents the emergence of new administrative charges in the head of the sellers, charges whose costs are very often replicated to consumers.

For these reasons, the Reform Movement group and myself subscribe to this bill because we are convinced that it will bring no negligible added value to consumer protection, while not creating additional costs for ⁇ .

Mr. Van Roy, this was your first speech at this tribune. I hope you will come back to us again.

Mr. Speaker, Mrs. Minister, dear colleagues, the problem has already been broadly outlined here and I am pleased that we here today offer a solution to that problem. In fact, in the current regime concerning contracts of fixed duration with a clause of silent renewal there is an imbalance between the consumer and the seller, which is clear. I am pleased to hear today that there is a consensus to provide a solution to this.

Those clauses, which are very often contained in small letters, provide that the agreement can be automatically renewed for a certain period if the consumer does not object before a certain date. In other words, the responsibility is, with that silent extension, placed entirely on the consumer. It is the consumer who should closely monitor when he can terminate which agreement. Today – research has been done in France – there would be an average of twenty-five contracts per family. One must already hang a calendar in the kitchen with the dates of all contracts on it to know when which contract should be terminated in order to enter into new agreements.

The consumer therefore often forgets to terminate those contracts, with the result that he is bound again for a certain period to a certain firm or seller. For the latter, of course, this is only advantageous. I am convinced that the design we will approve today is also beneficial for the sellers themselves, for the companies themselves.

For the consumer, it is, by the way, not so strange that he forgets to terminate a contract or that he blames on it, because there is an ever-increasing number of agreements – examples have been given in this regard – and that does not make it easier. There are, of course, real similarities that are vital, so to speak. It was referred to insurance, TV connection, Internet connection, GSM subscription and so on. But there are also other contracts, such as those of book and CD clubs, fitness subscriptions, subscriptions to newspapers and magazines, and so on. Especially for the administratively weaker consumers, it is a difficult task to closely monitor all these agreements.

A study – I think it is important to emphasize this in this debate – commissioned by the Dutch television consumer program Kassa confirms that problematic situation, by the way. In fact, that survey shows that as much as 40% of respondents had one or more subscriptions that they actually wanted to cancel. According to the same survey, a majority of 54% of respondents find it inconvenient to silently renew contracts.

An overwhelming majority of 83%, would find it a good thing if there would be a warning obligation. In doing so, the consumer will be given the opportunity to cancel, even if this would make the subscription even more expensive for the consumer. The top 5 of unwanted subscriptions consisted of magazines, adsl subscriptions, newspapers, the ANWB subscription - it was a Dutch survey, but the ANWB is comparable to VTB-VAB with us - and the book and CD clubs.

This is a ⁇ unwanted situation for the consumer. People have to pay for services or products that they no longer really want. The practice of the silent extension therefore leads to an unnecessary limitation of the freedom of choice of consumers.

That is also – I come to the economic argument – at the detriment of the innovative entrepreneurs and people who want to open or enter a market. After all, they have far fewer opportunities to acquire customers because the possibility of cancellation and switching is limited. In other words, silent extension also means that competition, innovation and efficiency are hindered.

We want to end this situation now. I would also like to refer to some foreign examples. In Austria and France, restrictions have already been imposed. In the Netherlands, in the meantime, there is also a proposal in the Second Chamber of a PvdA colleague that is similar to our design. They got the mustard here.

The Minister’s draft, which eventually resulted from a discussion and hearings on my bill to promote the protection of consumers in the event of silent renewal of agreements of fixed duration, allows the consumer in the future to terminate a service contract of fixed duration after silent renewal, provided that a notice period of up to 1 month is observed. In order to correctly inform the consumer, the contract must also clearly indicate, in greasy letters and in a frame on the front of the first sheet, the clause of the silent renewal.

I am also pleased that my amendment was adopted allowing KB to extend the scope of the law to certain categories of products. I know that in the committee there was criticism of the fact that it is left to the King. This was briefly discussed. It is better to provide this possibility with KB instead of providing nothing at all. I am pleased that the Minister can take an initiative in this regard. This would allow for example to capture book and CD clubs. This would also allow, for example, to exclude futures accounts from the legal provision. I urge the Minister to do the work of the KB quickly. I am confident that the KB will come.

With the law, the Minister also responds to an explicit request from the consumer organisations. Consumers who enter into contracts for a certain duration with the clause of silent renewal will be better protected in the future. Politics is for the people and the growing attention of consumer law is part of that. It was discussed here on the economic element, in particular the possible competitive advantage for entrepreneurs. I would also like to point out that the hearings showed that the draft also addresses certain concerns expressed by the Consumer Council.

In fact, they warned of the administrative burden that may – I would like to admit – have been partly embedded in my bill. This is no longer present. Therefore, I think that this bill is a good solution to address the problem, a problem that we all recognize. I hope that this bill can count on a vast majority.

Mr. Speaker, it is a commonly applied legislative technique to introduce a general principle into the law and to allow the King to set an exception for certain sectors. It is primarily something that repeatedly occurs in the law on commercial practices. It is almost standard with most provisions. We have listed in the committee as examples the articles in which this technique was applied. At one of the subsequent meetings, where a colleague replaced me, Mr Lenssen drew a very concrete example of an agreement where duration is an essential condition, also for determining the performance of the co-contractor, for example for a futures account. That could be an exception. The fact is simply that one should be able to do this if the common sense proves that it is meaningful and necessary, without however having to modify a whole law. That would involve a very logged structure and would also mean that, as we often see, the legislation does not evolve with society.

I do not share the fear that more and more contracts of increasingly longer, certain duration, would be concluded. If a fixed-term contract is concluded, if the price is clearly stated in the contact and if the contract is longer than, for example, one year, one will have to keep the same price. It is obvious that it is not equally interesting for every trader to compete on price with others who may offer shorter contracts or contracts that are tacitly renewed, which from now on are therefore easily cancellable. I don’t think the market works so that we should be afraid of it.

The Consumer Council is divided on this issue. This is about the consumers versus the trade federations. It is very clear that this is a measure to protect the consumer. I admit that it is an extensive measure, but necessary to ensure that people who have concluded a contract can still enjoy more attractive conditions. In this way, they will also face the advantages of the free market and not just its disadvantages.

I would like to say that this is a good system. This law is also inspired by the agreement with the real estate sector. There is the case that a contract, once it has been silently renewed, can also be terminated provided it respects a duration of one month. This is actually the same. What changes for the real estate sector is that they must also clearly indicate on the first page that the right exists. Nothing will change the agreements with the sector.

I would like to thank the members of the committee for the very constructive treatment of this bill. I also thank colleague T’Sijen, who had submitted a bill to bring this issue to the attention of this Parliament first.