Failure to receive separate notification of the benefit period’s 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 with a “joining benefit.” 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 make sure to state this in the customer’s contract; in monthly invoices; and even in conversations with a telephone representative. However, over time, most of us don’t even remember when we contacted the business, what we agreed upon, and until when the discount is valid. And many businesses rely on this “set and forget” mentality.

**This point was at the heart of an appeal against a class-action lawsuit filed against Cellcom.** It was argued that Cellcom increased 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 claimed that it had stated this in the customer’s invoices, and that was sufficient for them. **Cellcom’s claim was rejected under a ruling that this conduct violates the Consumer Protection Law, which imposes a broader “notification obligation” on businesses.**

District Court: Notification in 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 joining benefit, 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 expiry 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 claimed that it sent a separate notification in the monthly invoices and that this notification was sufficient.

The Jerusalem District Court accepted Cellcom’s claim 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 filed an appeal with the Supreme Court.

Supreme Court: Notification in invoices is not enough, an SMS message 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 telecommunication 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 this section, a business is obligated to notify the consumer that the term of the contract is about to end, and this also applies to the end of a short-term benefit. The “notification period” is between 30-60 days before the end of the period, depending on the type of notification.

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

1. In a written contract (if one exists);
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 fail to provide notification in these ways? The contract with it is void. In other words: it is not permitted to raise the price or even maintain the discounted price one minute after the end of the benefit period. Did the business not cancel the contract and continued to charge? The consumer may demand compensation without proof of damage 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, and not by SMS. The two argued that the law is very clear in this regard and that the District Court’s ruling 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 any of the ways. And if not? It has committed a consumer and tortuous wrong against its customer.

Finally, the Supreme Court (Honorable Justices Daphna 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 let us know: without teeth, consumer protection laws will be trampled upon. In order for businesses to respect them at their value, the pain of their violation must exceed the profit from their violation.

Did you not receive an SMS notification about the end of the discount period? Compensation of 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 compensation without proof of damage up to NIS 10,000 for each violation (hereinafter: “sample compensation“). Section 31A(a2) deals with the specific issue of providing notification and stipulates that the consumer may demand sample compensation only if all the following conditions are met:

1. The business did not send the consumer a written notification in all ways and dates stipulated in the law before the end of the period;
2. The business continued to charge the consumer after the end of the specified period of the benefit;
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 be confused! Submitting a written demand is only relevant to a claim for compensation without proof of damage. Thus, even if you did not submit a written demand as stated, you can still file a lawsuit to claim other compensation. For example, a claim for compensation with proof of monetary or non-monetary damage (such as mental anguish).

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