Kostelka: More Legal Hold Against Internet-Ripoff?

More Legal Hold Against Internet-Ripoff?

ORF-Series "Bürgeranwalt" (“Advocate for People”) – Broadcast of Oktober 4th 2008

In the broadcast „Bürgeranwalt“ from October 4th 2008 Ombudsman Dr. Peter Kostelka addressed the problem of „Internet-Rip-off“.

As shown in the course of the broadcast, electronic trading supported by the internet has not only made things easier and simpler, but also brought some new negative developments for the consumer, since some companies have become real specialists in betraying people. Re-quests for payment of companies operating from foreign countries are often intentionally confusing internet users by attracting them to presumably free offers and indicating the duty to pay only very hidden at the bottom of the homepage concerned when the user surfs by or just by showing the terms and conditions of business only accessible by “pop up”. Therefore consumers very often can not realize, that they are about to be caught in a trap set by purpose. Further on they are very often not informed about their existing rights to withdraw. Instead of that in many cases debt collecting agencies and lawyers exercise pressure and threaten consumers with lawsuits. In further consequence first demands for payment are followed by reminder fees. It is thus not surprising that more than 20.000 citizens addressed consultation points for consumers with complaints because of the before mentioned problem.

Ombudsman Dr. Kostelka presented the case of Ms. G. B., who became a victim of the M. Ltd. Although she affirmed a several times, that she has never been on the homepage of the company and therefore also has not signed a contract, she has been confronted with demands for payment. The M. Ltd. sells newspaper magazines (M. Magazine for Literature) and lures consumers with an allegedly free sample edition.

It is completely unclear, how the company got the IP-address and consequently was able to claim, that Ms. G.B. had signed a contract for an annual subscription. Something similar happened to Mr. U., who was lured to declare his dates by a company specialized on genealogy. It has not been made clear on the company´s homepage, that he signed a contract by doing so. Fortunately, Ms. B. und Mr. U. relied on the advice of the Ombudsman and therefore will not pay their bills.

The common most problem with online-services like SMS, tests, tax-hints, route planers, horoscopes are the often well concealed information at the costumer's expenses and the neglecting of the duty to inform- especially about the right to withdraw. Unfortunately many consumers feel intimidated by such methods and pay their bills. In practice, however, non of these shady companies ever took legal action against consumers not having paid their bills.

Ombudsman Dr. Peter Kostelka advised the spectators not to feel intimidated by such claims and reminders and to read up the rights and duties of such contracts of purchase. The Ministry for the Protection of Consumer Rights, the Labour Chambers in the Federal States, the Internet Ombudsman (http://www.ombudsmann.at/ombudsmann.php/cat/1/title/Home) and the Union for Consumer Information (VKI- www.europakonsument.at) are qualified points for useful help and provide persons concerned with the necessary documents, that can be used as a reaction to reminders. It is highly recommended to consider these hints before concluding an internet transaction and to protest in written form against these unjustified reminders for payment.

According to Ombudsman Peter Kostelka the problem can not be solved by the ongoing legal complaints and procedures having been launched by consumers because of illegal disadvantage and unfair competition. Obviously Online-Companies can not be sustainable deterred by actions for injunction, in some cases they carry on with a start up. On the one hand there are no legal instruments and deterrent penalties in Austria, which could keep such companies from expanding their business areas to Austria. On the other hand on the European level had to be reacted to the growing number of complaints because of lacking transparancy by tightening the consumer protection directive.

During the TV-discussion the representative from the Ministry for Consumer Protection mentioned the large range of free services for consumers in relation to „Internet Rip-off“. Further on he accepted the necessity for some legal changes on the national level, although initiatives on the European level had to be watched carefully before that.

Ombudsman Dr. Kostelka denounced this attitude and referred to parliamentary resolutions decisively calling up the Government (primary the Ministry for Consumer Protection and the Ministry for Justice) to take appropriate measures on the European and on the national level to put a stop to internet frauds. According to Ombudsman Kostelka the unsuccessful work of the interministerial working group with representatives of the economy does not constitute a reason to wait for a European Initiative. Although the negotiations about an amendment of the consumer protection directive in Brussels are about to begin, there is no agreement between member states in sight.

Ombudsman Kostelka finally stated that Austria can represent its position for stronger consumer protection, only if appropriate legal measures are taken on the national level to combat the present unsatisfying situation.