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Cancel button on a website

Photo: Andrea Warnecke / dpa

They apply to gyms, magazines or electricity contracts: In March 2022, a law came into force that makes it easier for consumers to cancel subscription contracts. But there are many violations, consumer advocates complain. They have issued warnings to dozens of companies for what they consider to be inadmissible notice periods.

In a joint campaign between June and September, the consumer advice centres and the Consumer Service Bavaria reviewed the contractual conditions of a total of 828 providers. The result: 85 companies have been warned since then. In 31 others, violations were found, but the legal review has not yet been completed or legal action is being considered.

In the meantime, 50 companies have relented, according to consumer advocates. Accordingly, they either issued a cease-and-desist declaration or amended their general terms and conditions (GTC). Lawsuits have already been filed in two cases, and further lawsuits have been announced. In some cases, companies and consumer advocates have different legal views. The purpose of the action is also to clarify legal ambiguities.

Companies are lagging behind the legal situation

Specifically, it concerns a law that came into force in March 2022. Accordingly, subscription contracts concluded after this date can be terminated after the expiry of the minimum term with one month's notice. The rule has been in place for mobile, landline or internet contracts since the end of 2021. Even if you have agreed to different terms and conditions when concluding the contract, they are not valid, says the legal expert of the consumer advice center Thuringia, Dirk Weinsheimer. So if you have not terminated in time and are actually trapped in a contract for another 12 months according to the terms and conditions, you can still terminate it with one month's notice.

As part of this so-called Fair Contracts Act, it was also made more difficult to conclude energy contracts by telephone and cancellation buttons were introduced on the Internet. This time, the consumer advocates did not check these two points. However, an analysis in July showed that a number of homepages had not yet set up cancellation buttons.

Weinsheimer does not accuse the companies of ill will – rather, it is ignorance. "Smaller companies without their own legal department in particular are lagging behind and don't keep an eye on legal developments." As an example, he cited gyms or dance studios, where 10 of the 37 companies examined had been found to have violated notice periods. Small providers are also more likely to be active in subscription models for clothing, with 12 of the 34 companies surveyed affected.

Dozens of energy suppliers in need of improvement

At 438, the comparatively high number of electricity and gas suppliers examined in the sample was striking. This also reflects the relevance, says Weinsheimer: "Every household has at least one energy contract." The result of the consumer advocates: In 50 of them, they see a need for improvement. In the case of smaller municipal utilities, for example, the change in the law may have slipped through.

"We assume that our member companies have correctly implemented the legal regulation," says the German Association of Energy and Water Industries. A fair contractual relationship and a trusting relationship with customers are very important to them.

In the case of newspaper and magazine publishers, the consumer advocates also found what they were looking for in 10 out of 52 companies. "T&Cs are not so much in the foreground in the end customer business. The offers in the subscription shops are decisive," says Dirk Platte, legal advisor to the Media Association of the Free Press. The fact that subscription contracts with consumers are not automatically extended by one year after the minimum term is now the industry standard.

The Federal Association of Digital Publishers and Newspaper Publishers (BDZV) is not aware of any member company that has not adapted its services to the law. "As far as we know, there is currently even a trend among newspapers that publishers are offering open-ended subscriptions that can be cancelled at any time, because these offers are in particularly high demand among our audience."

German government plans further improvements for customers

The Federal Government is generally positive about the law. It has brought important improvements for consumers, according to the Ministry of Consumer Protection. However, there is a need for further regulation. In the coalition agreement, the government has set itself the goal, among other things, that all consumer contracts concluded by telephone should generally be confirmed in writing. The possible minimum term of subscription contracts is also to be limited from two to one year and protection against dubious door-to-door sales is to be introduced.