Monday, 1 May 2017

No more "subscriptions with free smartphone" for Dutch consumers?

Have you bought your smartphone from a shop or are you one of the many consumers who choose to go for a plan+device package from a telecom provider?

In the second case, under a recent Dutch law you would have to show your creditworthiness in case the cellphone included in the package is worth more than 250 euros. 

In 2014, the Supreme court of the Netherlands decided that these combined contracts are to be legally characterised as loans, and that therefore the authorities competent for supervising financial institutions should also make their prudential rules applicable to telecom companies. 

For instance, it must be made clear for consumers how much of the monthly subscription price is due for the actual plan and how much goes to paying back the device sold in installments with the package. Additionally, the usual notice "watch out: borrowing money costs money" will have to accompany all promotional images advertising the packages offered. 

For some consumers, this may mean that they will in practice not be able to enter plans that would previously have been available to them. Consumer associations, however, seem to have been in favour of the novelty. 

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