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Finland to prohibit telesales use of verbal contracts

A change in the law will end the practice of telemarketers closing deals over the phone, with contracts only considered valid if a customer confirms in writing.

File photo. Image: Henrietta Hassinen / Yle
Yle News

A legislative change to come into force at the end of this year will prevent telesales operators from using verbal contracts agreed over the phone as a means of securing new customers. Instead, the customer's decision will only come into legal effect when it has been approved in writing.

This will give the customer time to consider the decision after the call and will also reduce the risk of misunderstandings, according to the Finnish Competition and Consumer Authority (FCCA), which noted that the change was a "long-awaited improvement" in the sector.

In future, once a telesales call is concluded, and the customer has verbally agreed to the terms of the contract, the company must then send out the offer in writing. If the consumer does not accept the offer in writing, the contract is not binding and the seller cannot demand payment.

The reform does not however apply to the telesales operations of telephone or online service providers.

These subscriptions are governed by separate legislation, which requires that companies in the sector can only contact existing customers with new offers. In addition, if a customer wishes to switch providers, they must contact the new company themselves.

Consumer Ombudsman preparing guidelines

Once the telesales call is concluded, the company can then send out the offer either in paper or electronic form. The offer cannot be sent during the duration of the call.

The selling company must also explain in the offer that unless the consumer explicitly accepts it, they are not bound by the contract and they have no obligation to pay for, return or keep any goods sent. The seller must also be able to prove, where necessary, that they have provided the consumer with the offer and the above information.

"The tightening of the rules is very welcome, as telemarketing causes a lot of harm, especially to vulnerable consumers. Giving people the freedom to think will prevent cases where a contract is created through coercion or misunderstanding," Consumer Ombudsman Katri Väänänen said.

Väänänen has been demanding legislative change to control how telemarketers operate for a number of years.

Existing legislation governing the telesales sector emphasises that the information provided on calls must not be misleading or untruthful and the relevant information must always be provided. In addition, the purpose of the call must be stated clearly at the beginning and the sales representative must not put the customer under any pressure to accept the offer.

The legislative change has been heavily criticised by telemarketing and media companies,

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