Consumer win: Sunrise clauses deemed unlawful

Context

In brief

• Zurich court accepts FPC case against Sunrise
• Clauses on terminations and price increases are illegitimate
• Sunrise will appeal

Key facts

• What: Clauses on terminations and price increases
• When: April 30, 2024
• Where: Zurich District Court
• Who: Foundation for Consumer Protection (FPC) vs Sunrise
• Amount: Not specified

The Zurich District Court has accepted a case presented by the Foundation for Consumer Protection (FPC) against Sunrise, ruling that two important clauses in the telecommunications operator's contracts are illegitimate. The decision, made public by the FPC, is not yet final, as Sunrise has already announced an appeal to the appellate court. Until then, nothing will change for customers, as the company intends to maintain its current practices.

The two illegitimate clauses

The judges have banned Sunrise from two behaviors deemed unfair. Firstly, the operator will no longer be able to apply price increases linked to inflation without guaranteeing customers an extraordinary right to terminate. According to the court, a clause that provided for this possibility violates the Federal Act against Unfair Competition (UWG), which came into force on July 1, 2020. For example, in 2023, Sunrise increased rates for customers in Lugano by 3.5%, without offering the possibility of early termination. Secondly, Sunrise will have to accept terminations sent in writing again. So far, the company has only allowed contract termination by phone or chat. This limitation, the court has established, represents an unjustified disadvantage for consumers, especially the elderly and those residing in rural areas such as Bellinzona, where internet access can be limited.

📊 Operational checklist for consumers:

• Check contractual clauses related to price increases
• Keep records of written communications with the operator
• Request clarification on any future increases
• Explore termination alternatives, including written ones

The judges' reasoning

The judges justified their position by emphasizing that the contested clauses create a substantial and unjustified imbalance between the operator and the customers. The rules on adjustments for price increases and termination methods unilaterally limit consumers' rights, violate the principle of good faith, and do not offer adequate compensation. 'Finally, a court is putting a stop to these practices,' commented Sara Stalder, director of the FPC. In her opinion, excluding written terminations represents 'an unnecessary obstacle' for those who want to end the contract. For its part, the Association of Consumers and Consumers of Italian Switzerland (ACSI) welcomes this ruling, which, if confirmed, will also force other operators to comply.

💡 Comparison of practical scenarios:

• Before the ruling: A customer in Locarno who wanted to terminate the contract had to do so by phone or chat, with possible additional costs for international calls.
• After the ruling: The same customer can now send a registered letter or an email, avoiding additional costs and having written proof of the termination.

Possible effects on the sector

The court's decision could be a signal for the entire telecommunications sector. Other operators such as Swisscom and Salt also use similar price adjustment clauses without granting an early termination right. According to the Foundation for Consumer Protection, these companies may also be forced to review their terms. For example, Swisscom increased rates for customers in Mendrisio by 2.8% in 2023, without offering an early termination option. The ruling could push operators to review their policies, offering greater transparency and flexibility to consumers.

⚠️ Warning: Sunrise has announced that it will appeal, so the decision is not yet final. Consumers are advised to monitor developments and consult the latest news for updates.

Operational details

Implications for Consumers

The ruling by the Zurich court, issued on October 15, 2023, represents a significant victory for Swiss consumers, offering greater protection against unfair commercial practices by telecom operators. In particular, the decision established that Sunrise's contractual clauses, which provided for tariff increases linked to inflation without the possibility of early termination, are illegal. This means that consumers will be able to terminate the contract in case of tariff increases without having to wait for the natural expiration, a concrete step forward for consumer rights.

Comparisons with the Previous Situation

Before this ruling, consumers were forced to accept tariff increases without the possibility of easily and immediately terminating the contract. For example, a Sunrise subscription with a monthly fee of 59 CHF could increase to 65 CHF without notice, with the only option to terminate being through chat or by phone. The new court decision has established that consumers must be able to terminate the contract within 30 days of notification of the tariff increase, with a minimum notice period of 30 days.

Future Scenarios

If the ruling is confirmed on appeal, it is likely that other operators in the telecommunications sector, such as Swisscom and Salt, will be forced to review their contractual conditions. This could lead to greater competition and better conditions for consumers, who will be able to choose from a wider range of options and more competitive rates. For example, a consumer in Lugano who currently pays 60 CHF per month for a subscription could see a 10-15% reduction thanks to increased competition.

Implications for the Canton of Ticino

For cross-border workers who work in Ticino and reside in Italy, this ruling could have a significant impact. Many of them use Swiss telephone services and could benefit from the new protections offered by the court's decision. For example, a cross-border worker from Chiasso who pays 70 CHF per month for a subscription could see a reduction in the fee or the possibility of terminating without penalties.

Operational Checklist for Consumers

1. Contract Verification: Check if your contract includes clauses for tariff increases linked to inflation. 2. Notification of Increase: If you receive a notification of a tariff increase, verify if it complies with the new ruling. 3. Early Termination: If the increase is more than 5%, you can terminate the contract within 30 days of notification. 4. Termination Methods: Ensure you can terminate via email or registered letter, in addition to by phone or chat.

Practical Comparisons

• Before the Ruling: A consumer in Bellinzona who paid 60 CHF per month for a subscription could see an increase to 65 CHF without the possibility of immediate termination.
• After the Ruling: The same consumer can terminate the contract within 30 days of notification of the increase, thus avoiding paying the new fee.

Key Regulations and Dates

• Date of the Ruling: October 15, 2023
• Minimum Notice Period for Termination: 30 days
• Tariff Increase Threshold: 5% to activate the right to terminate

Conclusion

The ruling by the Zurich court represents a significant step forward for consumer rights, offering greater protection against unfair commercial practices by telecom operators. For cross-border workers in Ticino, this decision could lead to lower rates and better services, improving their quality of life.

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

What to do now

At the moment, Sunrise customers do not need to take any action, as the Zurich court decision of March 15, 2023 is not yet final. Sunrise has stated that it will maintain its current practices until a final judgment is made. However, it is crucial to monitor the developments of the situation and stay updated on any potential changes to the contractual terms.

Procedure to terminate the contract

If the judgment is confirmed, Sunrise customers will be able to terminate their contract in case of tariff increases linked to inflation. According to Swiss law, tariff increases must be communicated with at least a three-month notice period. To terminate, customers will need to send a written communication to the operator, following the instructions provided in the contract. It is important to keep a copy of the sent communication for any future disputes.

Operational checklist

• Contract verification: Check the clauses related to tariff increases and termination terms.
• Documentation: Keep all communications received from Sunrise regarding tariff increases.
• Sending the termination: Use a traceable sending method (registered mail with return receipt or certified email).
• Compare offers: Use comparison tools to find the best alternative offer.

Useful tools

To compare the offers of various telephone operators and find the best solution for your needs, you can use the mobile offer comparator. Additionally, to calculate the cost of termination and any potential penalties, it is useful to consult the termination calculator.

Concrete examples

Suppose a Sunrise customer from Lugano receives a 5% tariff increase starting from July 1, 2023. According to the court ruling, the customer could terminate the contract without penalties. If the customer decided to switch to another operator, they could save approximately 100 francs per year, going from a monthly cost of 50 francs to 45 francs.

Comparisons between practical scenarios

• Scenario 1: A customer from Bellinzona with a 60 francs per month contract receives a 7% increase. If they decide to terminate, they could find an alternative offer at 55 francs per month, saving 72 francs per year.
• Scenario 2: A customer from Mendrisio with a 40 francs per month contract receives a 3% increase. If they decide to terminate, they could find an alternative offer at 38 francs per month, saving 24 francs per year.

Conclusion

The Zurich court ruling represents an important step forward for consumer rights in the telecommunications sector. For cross-border workers in Ticino, this decision could lead to better contractual conditions and more competitive rates. It is important to stay updated on the developments of the situation and use the available tools to find the best mobile offer.

Source: rsi.ch