By: Michael O’Farrell, Niamh GriffinÂ
A CONTROVERSIAL telecom group, which has been prosecuted by regulators across Europe, is threatening Irish pensioners with lawyers and debt collection agents and demanding payment for services to which some customers say they never agreed.
Yourtel Ltd is a newcomer to the Irish market having incorporated 18 months ago. But already, the low-cost firm has been the subject of over 500 complaints to regulator Comreg.
Many complaints relate to elderly customers who were cold-called and signed up to recorded voice contracts which they say they did not realise they were agreeing to.
They were then sent contracts and bills in the post and threatened with legal action and debt collecting agents if they refused to pay.
One such threat, seen by the MoS, reads: ‘If payment is not settled by the specified date, Yourtel is obliged to forward your account to a debt collection agency and bill you with any associated legal costs. We also reserve the right to disconnect your account. Outgoing telephone calls will no longer be possible.’ The customer concerned, an elderly gentleman, claims he was not aware he had agreed to any contract until he was notified by post.
Despite asking for the contract to be cancelled within the statutory 14-day period, he is still being asked to pay – and threatened with debt collectors – for calls made before he cancelled.
The pattern and nature of these complaints mirrors those of consumers elsewhere in Europe where Yourtel’s German-based owners have had a number of their companies taken to court by regulators, Governments and consumer groups.
Meanwhile, those behind the company – three Croatian executives based in Berlin – apparently share millions in annual profits from their operations in Ireland, Germany, Austria and Switzerland. Yourtel Ltd is part of a German group called Prima Holding GmbH. Being new, it is not yet obliged to file accounts in Ireland.
According to accounts published in Germany, Prima Holdings had revenues of €4.8m in 2012 and carried forward retained profits of €7.1m.
The group traces its origin to 2003 when Berlin-based Croatian citizens Marijan Vukusic, Mario Kovac and Marijana Vukusic (also known as Marijana Fenster) set up a company called Primacall GmbH in Berlin.
The firm expanded and now operates 12 companies under the Prima Holding banner. According to the firm’s accounts, the three owners of Prima shared dividends of €7.9m in 2012 and €10.3m in 2013. The group’s telecom firms offer low-cost calls on existing lines. Customers retain their line rental contract – typically with Eircom in Ireland – but are billed separately by Prima firms for calls. But the firms have gained a reputation for aggressive cold-calling techniques. The oral contract system favoured by Prima firms, in which customers are signed up for contracts immediately on the phone, has also resulted in complaints in several jurisdictions.
Regulators believe that the combination of cold calling and oral contracts can result in confusion. In its 2012 report, the Austrian regulator, RTR, said that the majority of complaints against Prima’s Austrian firm – Primacall – were mainly concerned with ‘the validity and circumstances surrounding the signing of contracts.’ RTR’s 2013 report praised Primacall for a decrease in complaints but said the firm stood out ‘due to complaints relating to direct marketing’. Another Prima firm in Austria, Sparfon, was prosecuted in September 2014 for improperly charging its customers €1.50 for each paper bill.
RTR said the infringement had continued for five months and given the number of customers, involved significant amounts of money.
Prima companies have also faced prosecutions in Germany and Switzerland, which despite being appealed, have been upheld.
In a bid to reduce the number of complaints, Austria tightened its regulatory regime.
‘To fight the practices of companies like Primacall, Austria decided to make use of the option provided by the EU Consumer Rights Directive so that service contracts concluded by phone require a written confirmation by the consumer,’ a labour ministry spokesman said.
But last night the Department of Jobs, Enterprise and Innovation said it had no plans to introduce a similar measure here.
In a departmental guidance note issued last June, the Government said compulsory written confirmation of oral contracts would represent a ‘significant administrative burden for traders in the hospitality sector in particular and might also frustrate consumers who wished to conclude a contract quickly over the telephone.’ In January, a Comreg investigation concluded that Prima Holding’s Irish firm, Yourtel, had made cold calls to people who had expressed a preference not to receive such calls.
The regulator also found that Yourtel was not in compliance with the Consumer Information Regulations because it did not inform customers of their right to cancel their contracts within 14 days.
In response, Yourtel undertook to implement a number of measures. Asked for a response by the MoS, the company engaged a lawyer but declined to answer specific questions put to it.
Last night, consumer groups and advocates for the elderly criticised how Yourtel treated some customers.
Dermott Jewell of the Consumer Association said his group was still receiving complaints despite Yourtel’s January undertaking to Comreg. ‘Yourtel is showing a lack of consideration for consumer rights. It appears to be worse now than when Comreg started its action,’ he said.
‘The product is legitimate – the issue is how they are selling it.’ Age Action Ireland CEO Eamonn Timmons said: ‘We had a number of calls to our helpline, complaining about how people are being sold Yourtel products. We would advise people not to sign up with voice contracts.’ Friends of the Elderly spokesman Dermot Kirwan said many customers had the impression they had spoken to Eircom when they were cold-called by Yourtel.
‘Eircom is one of the most trusted names in Irish business. Older people hear “Eircom” and Yourtel gets a listening ear,’ he said.
Eircom told the MoS that it did not permit its brand to be misused by third parties.
