Wednesday 14 November 2018

German phone firm fined €66,000 for ripping off hundreds of elderly Irish customers

Yourtel entered the Irish market in 2013
(Stock image)
Yourtel entered the Irish market in 2013 (Stock image)

Tom Tuite

German landline operator Yourtel has been fined €66,000 for ripping off hundreds of elderly Irish customers.

Following an investigation by industry watchdog Comreg, Yourtel pleaded guilty to 88 counts under the Communications Act for charging 560 customers for a service that was requested but not supplied. The prosecution was described as "unprecedented".

The customers had been poached from Eircom and although Yourtel did not transfer the service they billed for it, Dublin District Court heard.

They ended up getting double-billed and Yourtel threatened them with debt collectors, legal action and having their details sent to credit rating agencies.

The offence carries fines of up to €5,000 per offence.

After hearing a litany of examples where elderly customers had been pursed and threatened by Yourtel, Judge Flann O’Brien described the offences as "nothing more than deceit" and he imposed fines of €750 on each charge, totalling €66,000.

Speaking to reporters after the case ended, Comreg director Barbara Delaney said: "Comreg welcomes the District Court decision to impose 88 criminal convictions on Yourtel.

"Today’s District Court fine of €66,000 (€750 per conviction) is the largest fine imposed by the District Court following any prosecution case taken by Comreg.

"We expect that today’s District Court judgement will finally bring consumers’ issues relating to Yourtel, which first came to Comreg's attention in 2013, to an end."

The company, which has claimed to operate the lowest-priced landline calls in the country, entered the Irish market in 2013 and had pleaded guilty to 88 sample counts, out of more than 880 charges originally brought by the phone industry regulator

Prosecuting barrister Michael O’Higgins SC (with Ronan Kennedy BL) told Judge Flann Brennan at Dublin District Court that Yourtel effectively cold-called Eircom customers to offer them a "flat bill" telephone services. The 24-month contracts were for calls only and they would still pay Eircom separately for the landline.

Mr O’Higgins told the court that mostly 78-year-old customers were affected, the average age of the customers involved in the investigation was 65 to 66 and the oldest customer to sign up was in their nineties and another customer had special education needs.

Yourtel had about 5,000 customers but Comreg had received complaints from 17pc of customers over a certain time period compared to less than 1pc for other major phone telephone service providers.

The company took "a very hard-line view" of customers who complained, Mr O’Higgins said. They were threatened with late payment fees, legal action, debt collectors and having their details sent to a credit ratings agency.

In evidence, Comreg compliance manager Miriam Kilraine said the case was "unprecedented". She gave a summary of the experience eight customers had with Yourtel when they signed up their €11, €13 or €23 a month packages with two-year contracts.

Stated on the back of Yourtel’s bills was: "Double billing is not possible you cannot be billed by two operators for your calls".

However, the customers' services had not been transferred from Eircom and Yourtel also billed them for a service it had not provided. Complaints to Yourtel led to technical explanations and were not resolved.

Forty per cent of Yourtel’s customers have contacted Comreg about the company, Ms Kilraine said, adding that this was also unprecedented while the average amount of customer complaints in relation other companies was 0.3pc.

Case One

In 2014, a couple in Co. Cavan, aged in their eighties, received unsolicited calls from Yourtel to encourage them to switch from Eircom for cheaper calls. They signed up but did not pay their bills for September and October that year after noticing they were still paying Eircom. In January 2015 Yourtel demanded they pay the outstanding amount as a well as a €50 late fee payment. They were told they could face legal action.

It transpired that Yourtel never sent the transfer request to Eircom. As a "gesture of good will" Yourtel agreed to terminate the contract but said the money owed would still have to be paid.

The couple were "extremely worried and wanted to pay" however their son contacted Comreg. By June 2015 a debt collection agency sought €122 and in November a demand was made for €440 but ultimately they stopped receiving letters.

Case Two

A widower in Kerry signed up to Yourtel in November 2014 but found the payments through his post office account was inconvenient and he fell behind. He asked to start direct debit payments but was told this could not be done until the amount owed had been paid.

He was told he could only cancel his account if he paid for the 24 months.

However, his calls had not been transferred to Yourtel who had billed him for a service they had not provided. "The customer stated he had been at his wits end and believed he had been conned," the court heard.

Case Three

A Co. Carlow man in his seventies signed up while his wife was in hospital but he then tried to cancel the account without penalty within Yourtel’s "14 days cooling off period". He was billed from January to March 2015 for the service. He later faced demands for up to €404 as well as letters from debt collectors even though his phone service had not been transferred to Yourtel at all.

Case Four

A Sligo man with special education needs signed up to a Yourtel phone call package.

He faced threats of legal action and demands for €450 even though the Yourtel had not provided a service.

He received "threatening calls" from a debt collection agency in relation to the money sought by Yourtel.

It caused him anxiety and his brother reported it to Comreg, the court heard.

Case Five

A widow in her eighties in Carlow signed up to Yourtel in August 2014 but stopped paying in December that year. She told Comreg that Yourtel’s customer service agents were "aggressive" and she felt "intimidated" with threats of being reported to a credit ratings agency. They had pursued her for payments for a service it never provided.

Case Six

A Co. Wicklow couple in their seventies and eighties who were in poor health had signed up but cancelled within the 14-day cooling off period. That did not work and they got billed by Yourtel but later realised their calls had not been transferred from Eircom, however, Yourtel had billed them. Their son wrote to Yourtel’s HQ in Germany while further demands for payments of €480 continued.

Case Seven

A Limerick woman in her seventies signed up for the €11 a month package in September 2014 but by March the following year despite getting billed they realised that the service had not been transferred to Yourtel.

Case Eight

A Cavan man in his fifties signed up but stopped paying when he realised he was getting double billed and he received letters from a debt collection agency which caused him and his wife distress.

One customer also hired a solicitor to deal with Yourtel’s demands, the court was told.

The court heard that Yourtel had been successfully prosecuted earlier this year on one count of billing for a service which they did not provide which resulted in a €2,500 fine and an order to pay €10,000 in legal costs. In 2015 it was given the Probation Act and ordered to pay €2,500 to charity for failing to comply with a request from Comreg.

It had also been fined €2,500 in 2016 for unsolicited marketing calls.

The court heard that the company has offered all the customers affected refunds which came to €125,000. So far €116,000 worth of their refund cheques had been cashed and fresh payments were being issued to customers who have yet to take the refund.

The court heard that the company registered in Ireland but does not have offices here and uses a mail direct service, at Kill Avenue, Dun Laoghaire, Co. Dublin.

Their base was in Germany and company director Marijan Vukusic provided an affidavit to the court apologising. He said the company had been over-zealous but since June 2015 they have not sought new Irish customers and the company did not intend to recruit new business in Ireland.

Pleading for leniency, defence counsel Oisin Clarke said that the court had heard a “damning account” of his client’s business procedures. He asked the judge to take into account the guilty plea which the prosecution accepted was useful.

Mr Clarke also said that Yourtel had paid €10,000 toward the prosecution costs.

Online Editors

Business Newsletter

Read the leading stories from the world of Business.

Also in Business