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Read "Contract Expiration Notice" Carefully

Source:Department of Consumer Protection

Consumers always want their money spent worthwhile. The Department of Consumer Protection, Executive Yuan (hereinafter referred to as the DCP) reminds that if you don't pay attention to the details of the contract, you may fall into the trap set up by ill-intended traders and your money may sneak away without your knowledge.

Taking advantage of various kinds of promotions, many people have recently rushed to sign the “all-you-can-eat” service contract with the telecommunications company without knowing that after the expiration of the contract, the monthly fee may no longer remain at the preferential price of NTD 499 but return to the "original price" of NTD 1,299. Only upon receiving the bill may some consumers find out that the “all-you-can-eat” service is charged item by item, leading to an explosively high bill. In response, the telecommunications companies said that they will definitely notify consumers before the contract expires. However, the DCP has still received complaints from consumers that the notice from a certain operator states only a brief message: "The contractual period of this mobile phone account will expire on a certain day of the year. Please contact the store or customer service for more information.” How can people get the hidden message that they may suffer from a big impact on their own rights if they don’t contact the store or customer services?

The push theory in behavioral economics has been widely used by many government agencies and enterprises. It is the most common thrust to set the option that customers are expected to check as a “default option”. The DCP states that the DCP has also been using this concept to exclude clauses that often arouse disputes and unfairness and to define important clauses as mandatory provisions (in the same way as the default option) so as to balance the interests of both parties. The aforementioned contract expiration notice sent by the telecommunications company is a positive thrust, but its content is so unclear that it does not achieve the effect of notification at all.

Water holds up the boat; water may also sink the boat. The push theory can be a two-edged sword, which, when used to influence people to make wrong choices, becomes a "dark nudge". A few merchants manipulate those people who are in urgency and/or rashness, who are inexperienced, or who fear getting in trouble by offering some default options that seemingly appear to be more convenient, more obvious, or more favorable so as to entice them into making “foolish” choices. For example, people may find such advertisement stating that software is offered free only for a limited time and it is only one-click away, but it is very difficult to find a way to unsubscribe at the end of one-month trial period. In another case, consumers wishing to book the hotel online are informed by the reservation network that the best price has been offered for the last room and 5 people are fighting to book it online. Such is a tactic to entice the unwary consumers into making unwanted decisions. In fact, dark nudges are not uncommon and have attracted the attention of all the countries in the world. Dark-nudge violations have been discussed in a number of international conferences, and Taiwan has also begun to scan the market for those dark-nudge methods that cross the red line (which is unfair to consumers).

The DCP said that the relevant authorities will investigate and deal with the illegal operators in terms of their untrue propaganda methods. In fact, the DCP and the National Communications Commission (NCC) have already met with the telecommunications companies for several times, reiterating the importance and necessity of information disclosure. The DCP emphasizes that, in accordance with Article 13 of the Consumer Protection Act, the enterprise operators should disclose the terms and conditions of their Standardized Contract to the consumer; if it is difficult to clearly indicate the contents, the enterprise operator should announce the contents in a conspicuous manner. With the consent of the consumer, the terms and conditions shall be put into the contract. Not happy with the practice of deliberately concealing important information, the DCP vows to find out the recidivists from the consumer complaints and transfer them to the competent authorities for further investigation.

The DCP urges the consumers to watch out for the immediate benefits that are too good and too convenient and to do more homework beforehand to avoid buyer’s remorse in the future.