How Israeli Companies Trick the Elderly Into Buying Smartphones They Don't Need

Older consumers are being persuaded to buy fancy cellphones and expensive surfing packages they don’t understand and will never use: 'Many of these things are calculated business moves, not just random mistakes'

Illustration: Elderly in Israel being tricked into buying phone packages they don't need
Leo Atelman

Carmela Pinkas uses her cellphone mainly to get videos and stills of the grandchildren. In March, Pinkas, 66, saw a popup notice that the phone’s memory was almost full. The Hot Mobile outlet she visited could have suggested she delete old photos and clips, to free memory space. The representative chose to sell her a 64-gigabyte memory card and surfing package, as well as advanced audio system that, she says, she thought she was getting for free. Not so.

Her family immediately realized she’d been sold a bill of goods: technology she doesn’t understand, a memory card she didn’t know how to use and despite the salesman’s explanations, she didn’t know how to synchronize the headphones she had “received” – at a cost of 1,500 shekels – with the phone. Noting the contract she’d signed, HOT Mobile refused to void the deal entirely, agreeing to do so only in part. Small claims court found for Pinkas, ruling the company had to return all her money, but denying further compensation.

The story isn’t unusual. Seven percent of the 40,000 complaints submitted each year to the consumer council are from elderly people; and many of those complaints involve the mobile phone companies. For instance, they sell phones that are inappropriate for the user, for inflated prices; they promise tablets and other items as “gifts” that the elderly don’t even need – and actually wind up paying for. Other complaints involve subscribers to “discount clubs,” gambling, repair services and insurance for household appliances.

Perfectly legal

Almost all these deals are perfectly legal. But the elderly may be particularly vulnerable to the argument that their grandchildren would love it. Of course, the mobile phone companies aren’t the only ones taking advantage of bewildered elderly people – so do telemarketing companies, customer clubs, weird insurance schemes, you name it.

“We constantly see elderly people and the disabled serving as convenient targets for dubious conduct by businesses that cynically exploit their situation,” says Josh Goldschmidt, CEO of the Consumer Council. Things can reach the point of malicious harm, he says. “Many of these things are calculated business moves, not just random mistakes.”

The elderly may be less aware of their rights and how to exercise them, Goldschmidt says.

“I know the subject personally,” says Knesset member Itzik Shmuli of the Zionist Union, who for years has been helping a Holocaust survivor who has no family. “Once he came to me crying, ashamed to tell me that he had a charge of thousands of shekels on the credit card. He went to a stall in the mall and asked to fix the phone. They told him, ‘Come and upgrade,’ and on the way they sold him four more cellular phones to ‘grandchildren,’ even though he has no grandchildren. They also gave him a tablet and equipment for the car, even though he does not drive and ride buses. He agreed to take it because they told him it was a gift, and in the end he was charged thousands.”

Shmuli contacted the CEO of the mobile company, who canceled the deal. But most elderly people don’t have Shmuli by their side.

“There is no small print, it’s a present. If you don’t need it, maybe give the phone to one of the grandchildren,” my elderly aunt was told. She’s been paying 99 shekels a month since them, 30 shekels for the “present” and the rest for a surfing package she doesn’t use,” says H.L. The company refused to void the transaction because she had opened the packaging in the store. “Actually, she hadn’t. The sales rep did, to show her how the device works. But what do they care?”

The Consumer Council wrote a position paper about aggressive marketing to the elderly and is weighing what can be done, given that these practices are not illegal. Companies do get slammed with heavy fines for misleading customers. Cellcom, Partner Communications and Pelephone were fined a combined 1.5 million shekels for misleading promotions about fourth-generation technology. Cellcom and Golan were fined 5 million shekels for overcharging.

How common is mobile technology among the elderly, anyway? The Central Bureau of Statistics says 72% of people aged 20-50 use computers, 65% in the age group of 55-65 and only 49% of those above the age of 65.

Only 45% of people aged 55+ surf by phone, half the rate at ages 20-54, and only 28% make phone or video calls by internet.

Anat Saragusti,a journalist who has written extensively about the elderly, isn’t surprised by the figures. People who retired before the internet age had to be friendly and pleasant if they wanted help in their hour of need; for the surfing generation, smiles are obsolete. They can get recommendations and compare prices online, and summon a technician.

“They are not morons. They function, and most importantly, they often have money. But they never worked with a computer or have a phobia about operating digital devices, and that makes them disabled and dependent on the grandchildren’s help,” says Saragusti. “The grandson or granddaughter could teach them in a minute, but they want to do things themselves and not depend on grandchildren, who don’t always have patience.”

Help for technophobes

To help protect technophobes who might be misled by marketing, Shmuli passed an amendment to the Consumer Protection Law, to enable the elderly, immigrants and persons with mental, emotional or physical disabilities to cancel transactions up to four months after they agreed to buy something, rathwer than the two weeks the law now stipulates. But even four months may not be enough for some.

Tal Gueta’s 66-year-old father from Asheklon is not particularly tech savvy. “He had a subscription to Cellcom and he had a simple phone he used to make calls sometimes,” recalls Gueta. “He did not know how to use internet. For years he had a regular phone package deal, for which he paid for 60 shekels a month. When the package expired, they automatically associated him with a much more expensive program, costing over 100 shekels a month. He had been certain his payment hadn’t changed, but one day I went over his bill and saw it.” They called Cellcom to complain, but because it was the beginning of a month, they wanted to charge him the higher fee for the whole month, she says.

The Consumer Protection Law states that commercial companies are required to disconnect the consumer from a “perpetual” contract within three business days as of the moment the customer delivers a cancellation notice. Yet the mobile operators often charge the full fee for the whole month in which the notice was delivered. The Consumer Protection Authority is fighting the practice and heavily fined two mobile operators in the past year — 3.8 million shekels for Cellcom and 765,000 shekels for Golan Telecom (the companies have the right to a hearing, which might reduce the final fine). Only after Gueta involved the Consumer Protection Authority did Cellcom finally cancel the father’s phone and refund some of the money.

But Dana Vaknin couldn’t manage to void a deal made by her mother, 64, who went to have her phone fixed. The representative told her that her phone was obsolete and persuaded her to buy a very advanced Samsung handset, the Galaxy S8, for 4,500 shekels, Vaknin recounts. But her mother couldn’t use the device. “She doesn’t even text, just makes calls. She only knows how to see photos we send. I don’t know why she agreed to it. The next day she showed us the phone and my husband immediately took her back to the service point. But they said she had already used it and the deal couldn’t be canceled.”

Saragusti believes the solution lies with the companies themselves. “The sales and service representatives are young, talk fast, and often sell packages that the adult population does not need,” she says. “They are suitable for 16-year-olds who make heavy use of cell phones, not people who just want to send text messages and see pictures of their grandchildren. I think the solution is in having people in the service centers who are trained to talk to older people.” A sales rep aged 60-65 would have better rapport with people in their age group, she suggests.

Elderly reps

She knows the companies are in no rush to change the situation, and believes legislation is the way to get them to hire older service representatives who can better adapt a package to their peers.

“It could be one representative or two per shift. The service centers can see all the details about the customer when a call comes in, their age too, and would simply forward these specific calls to slightly friendlier representatives.”

Cellcom responded that Gueta had been signed up to the company by his son, who registered him for a plan with a discounted monthly rate for one year, and received the invoices for him at the mailing address he provided. “During the year, the details of the plan and an update on the change expected to occur a year later appeared in the invoices every month. In addition, the company updated the customer that the plan was about to end in the invoices sent to him three months before the year ended.”

Hot Mobile commented: “In both cases mentioned in the article, the customers received all the information and details before the transaction was executed. The first case (of Pinkas) was discussed in the Small Claims Court, where the judge ruled that no compensation was required. In the second case (Vaknin), the customer was present at the place with a relative and after the purchase, expressed satisfaction with the service. In recent days, the customer visited the service center again and asked for further explanation about the costs of the device. After receiving the relevant information regarding the plans to which she subscribed, the matter was closed to her full satisfaction.”