In a meeting of the Knesset’s Economics Committee, which was considering the proposed Communications Law (Bezeq and Broadcasts) (Amendment No. 52) (Prohibition of payment and loss of benefit due to cancelation of an agreement to provide mobile radio telephone services), 5772-2011, the Consumer Council proposed that an additional section be added to the law, stating that the prices for cell phones (or any other end user devices) supplied by cell phone service providers should be final, and not dependent on any condition, including the use of other services provided by the company.
The suggested amendment is aimed at preventing harm to consumers as a result of the charge-credit system, under which the cell phone company offers a “discount” on the price paid for a phone, on condition that the customer uses a certain amount of services (calls or text messages). Under these kinds of arrangements, if the customer leaves the company during the contract period, the discount is cancelled and he is forced to pay the company’s “list price” for the phone.
Research by the Consumer Council indicates that the list prices quoted by the cell phone companies are generally higher (by tens of percentage points) than the prices offered by independent sellers. Thus, the charge-credit system also serves as an exit hurdle, effectively making the provisions of the law that abolish exit penalties inoperative.
In the Council’s view, it also affects the consumer’s ability to make price comparisons between identical products.
The Consumer Council’s proposal will ensure that companies cannot inflate the prices of the phones when the contract is terminated; it would require the cellular operator to provide consumers with a final, absolute price for any end user device, without that price being dependent on the consumer using the company’s other services.
Adv. Ehud Peleg, CEO of the Consumer Council, stated that “the addition proposed by the Council will complete the steps necessary for ensuring the ability of consumers to terminate their association with a cell phone company, without any obstacles to moving between companies, as well as providing them with certainty as to the final price for the phone, so that they can make comparisons with the price of such phones offered by other suppliers.”
