Failure to receive separate notification of benefit expiration renders the agreement void.

Did you not receive a separate notification about the end of the promotional period? The business should have notified you.

Many businesses attract customers using a “sign-up offer.” This usually involves a discount for a limited period, after which the price reverts to a different (usually higher) price without the discount. Most companies are careful to state this in the customer agreement, monthly invoices, and even in conversations with telephone representatives. However, over time, most of us forget when we contacted the business, what we agreed on, and how long the discount is valid. Many businesses rely on this “set and forget” behavior.

**This point was at the heart of an appeal against a class action lawsuit filed against Cellcom.** It was argued that Cellcom raised the price of its “Cellcom Triple” plan after 12 months from the date of joining, without providing its customers with an independent notification of the price increase shortly before the end of the discount period. Cellcom did not deny that it did not issue such a notification, but argued that it stated this in the customer’s invoices, and that was sufficient for them. **Cellcom’s claim was rejected under a ruling that this conduct is contrary to the Consumer Protection Law, which imposes a broader “notification obligation” on businesses.**

District Court: Notification on Invoices about the End of the Discount Period is Sufficient

In January 2018, Yiftach Tamir and Niv Tobias filed a class action lawsuit against Cellcom Israel Ltd. with the Jerusalem District Court. The plaintiffs purchased a service package from Cellcom under the “Cellcom Triple” plan. As a sign-up offer, it was agreed that the communication package would be provided for NIS 149 (instead of NIS 169) for 12 months. It was further agreed that during the promotional period, the plaintiffs would not be charged NIS 29 for an additional set-top box. Upon expiration of the promotional period, Cellcom began charging the plaintiffs the full price (without discount)—both for the communication package and for the set-top box.

The plaintiffs argued that the agreement with Cellcom was a “short-term agreement.” And in accordance with the provisions of Section 13 of the Consumer Protection Law, Cellcom was obligated to send them several separate notifications shortly before the end of the discount period. Cellcom argued that it sent a separate notification in its monthly invoices, and that this was sufficient.

The Jerusalem District Court accepted Cellcom’s argument regarding the service package and rejected the request to approve the class action on this ground. The class action plaintiffs did not give up and appealed to the Supreme Court.

Supreme Court: Notification on Invoices is Not Enough, an SMS Must Also Be Sent

In 2020, the plaintiffs appealed the district court’s decision to the Supreme Court. The Supreme Court made several rulings that would later shake the foundations of communication companies (and not only). The discussion centered on the interpretation of Section 13 of the Consumer Protection Law, which deals with short-term agreements. According to it, a business is obligated to provide the consumer with notification that the contract period is about to end, and this also applies to the end of a limited-time offer. The “notification period” is between 30-60 days before the end of the period, depending on the type of notification.

Section 13 above states that the notification must be given in any of the following ways:

1. In a written contract (if any);
2. In any invoice, receipt or payment notice up to 3 months before the end of the specified period;
3. By SMS to the mobile phone number provided by the customer (if provided), within 21 days before the end of the contract.

Did the business not give notice in these ways? The contract with it is void. In other words: it is not permitted to raise the price or even maintain the reduced price a minute after the promotional period has ended. Did the business not cancel the contract and continue to collect payment? The consumer may demand damages without proof of harm of up to NIS 10,000 for each violation.

In the case of Tamir and Tobias, Cellcom sent them notifications about the end of the contract, but only in the monthly invoices, not by SMS. The two argued that the law is very clear in this regard and that the district court’s determination that notifications in invoices are sufficient is incorrect. The Supreme Court accepted the position of the two and ruled decisively that contrary to Cellcom’s claim—there is no room for interpretation here. The law clearly and very clearly states that a business must send a notification in each of the ways. And if not? It committed a consumer and tortious wrong against its customer.

Finally, the Supreme Court (Hon. Justices Dafna Barak-Erez, Ofer Grofman, and Khaled Kabub) accepted the appeal and ordered Cellcom to pay costs of NIS 50,000. In doing so, it sent a message for the benefit of consumers:

And we shall know this: without teeth, consumer protection laws will be trampled underfoot. In order for businesses to respect them as they deserve, the pain of their violation must exceed the profit from violating them.

Did You Not Receive an SMS About the End of the Discount Period? Damages Up to NIS 10,000

Section 31a of the Consumer Protection Law sets out a list of cases in which a court may order a business to pay damages without proof of harm up to NIS 10,000 for each violation (hereinafter: “**sample damages**”). Section 31a(a2) deals with the specific issue of providing notice, and states that the consumer may demand sample damages only if all the following conditions are met:

1. The business did not send the consumer written notice in all ways and deadlines stipulated by law before the end of the period;
2. The business continued to charge the consumer after the expiry of the specified period of the offer;
3. The consumer sent the business a written warning before taking legal action (see note**). (Sections 31a(a)(5) and 31a(b) of the Consumer Protection Law)

Do not get confused! Submitting a written request is only relevant to a claim for damages without proof of harm. Thus, even if you did not submit a written request as mentioned, you can still file a lawsuit for other damages. For example, a claim for damages with proof of financial or non-financial harm (such as distress).

But it doesn’t have to end at NIS 10,000! There are cases where the court may even award damages without proof of harm up to NIS 50,000: repeated violation, ongoing violation or violation committed under aggravating circumstances (Section 31a(c) of the Consumer Protection Law, 1981).