The use of a mobile phone as a means of payment is increasing, but technology to identify customers is lagging far behind, in contrast with e-commerce. The triangle drama between the operator, the service provider and a minor as a contract party generally ends up with the guardian having to foot the bill. A recent ruling by the Consumer Complaint Board concerning TV games can be regarded as a step in the right direction, however.
In July the Consumer Complaint Board issued a ruling in a case in which a minor had played a TV game on his parent's mobile phone and racked up a bill amounting to thousands of euros. The ruling was in line with a decision handed down last spring in a similar case (see Current Issues 3/2006). It is clear that a minor cannot enter a contract involving a large amount of money or paying on credit (in this case with a mobile phone), so no valid contract came into existence between the minor and the service provider. There was a valid contract between the operator and the parent who owned the subscription, however, in which the owner of the subscription had agreed to pay for all costs arising from the use of the subscription.
Operator entitled to collect receivables, service provider must refund money
In the opinion of the Consumer Complaint Board, the operator was entitled to collect its own share of receivables, particularly since the consumer had not taken advantage of the possibility to block calls to premium-rate numbers. In this case the Consumer Complaint Board recommended that the consumer should pay only two-thirds of the bill, since the amount owed was vary large and the operator had not informed the customer of the sudden increase in the bill. Although the operator was regarded as being entitled to bill the consumer for the use of the phone, the Consumer Complaint Board expected the operator to show a sense of loyalty towards the consumer: if a phone bill suddenly shoots up, the customer should be informed immediately. Most credit card companies follow this kind of procedure, for example.
The service provider was regarded as having received unjustified profit because a contract relation could not have arisen between it and a minor. The consumer was thus entitled to receive a refund equal to the service provider's share of the bill. The service provider thus had an obligation to refund the money it had received through the operator to the consumer.
Identification system would be in everyone's interests
If the service provider had the necessary technology to identify customers, this kind of difficult situation could be avoided. For example, a separate PIN code for paying with a mobile phone would ensure that the person using the service is competent to enter a contract. In Finland technical identification systems are not on the same level as in many other countries.