New Bill in Israel Might Allow Consumers to Cancel Purchases by Email

Legislation, which goes to Knesset for final vote, requires companies to allow customers to cancel by phone, email

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Reuters

A bill allowing consumers to cancel transactions via phone or e-mail is headed back to the Knesset for a final vote before becoming law, after the Knesset Economic Affairs Committee gave its stamp of approval.

The bill expands the Consumer Protection Law, and gives consumers more ways to cancel transactions. Currently, the law does not state which communication methods companies must allow consumers, and different companies impose different restrictions, sometimes making transactions difficult to cancel.

The bill was submitted by MK Yoel Hasson (Zionist Union), David Bitan (Likud) and Eitan Cabel (Zionist Union).

The draft bill states that transactions may be canceled via a phone call to a service hotline or by verbal statement at the place of business, except in cases where the law states explicitly that cancellation must be in writing. The bill also permits cancellations via registered mail, email, fax should the business have one and online in the case of businesses that enable online transactions.

Companies that violate the terms may face fines of 22,000 shekels ($6,250) per corporation, and 7,000 shekels per individual. A business owner who continues to charge a customer after a transaction has been canceled can be sued for 10,000 shekels in compensation.

Cabel, who chairs the Knesset Economic Committee, stated that the time had come to halt the abuse of customers seeking to cancel transactions. “They receive VIP treatment when they join, and they need to be offered that when they leave,” he stated.

Hasson added that some services enable customers to sign up for a service with a few clicks on a web page, without ever interacting with a human. “There’s no reason that it shouldn’t be possible to state you’re canceling the service with the same ease,” he said.

Israel Consumer Council economist Gil Bergfreund said the council receives numerous complaints from people who are struggling to cancel their cellphone, internet or multichannel television contracts. He suggested making the companies accept cancellations via their websites, and requiring the companies to send confirmation. A Communications Ministry representative stated that the cellphone companies are already required to take cancellations via an online form and to record the date of the request.

The legal adviser of the union of travel agencies, Yael Tabak, stated that the option of verbal cancellations created problems for travel agents vis-a-vis airlines, which need cancellations in writing. In response, Cabel and Hasson agreed to have the economy minister draft regulations for cases in which cancellations need to be submitted in specific formats.

The bill states that businesses must inform consumers clearly in writing about how to cancel a transaction when a deal is signed or a product arrives, and must also state their cancellation policy clearly on their web page.

Currently the law states that a business must cancel a transaction within three days of being informed, or within six days of receiving a cancellation via registered mail.

The change will take effect within four months of when it appears in the official records.