By Llilda Solano
Founding Partner of LLS Auctoritas
Lawyer, Master in Economic Legislation and Business Law Email: lsolano@auctoritasrd.com
August 2021
Published in the Economic Rhythm Magazine
Adherence contracts from a legal point of view have been the subject of extensive scrutiny everywhere. It is a form of contracting that breaks with the classical theory of bilateral negotiation between the parties and an agreement of wills as a constitutive element for the validity of the contract. However, adhesion contracts, despite the problems they contain, are accepted as valid and necessary by the legislation, and the discussion has focused on how to go about creating and correcting the distortions that they generate through different solutions.
I do not want to focus this article on the legal issue per se since it would have to enter into exhaustive evaluations from at least three perspectives: (I) that of consumer law (specifically in the so-called “mass contracting” according to its general regulation and sectorial); (II) that of the Law of unfair competition and; (III) on free competition law issues. It would also have to question the function of pre-established clauses that are presented in contracts not only in the telecommunications sector but that are commonly seen in other industries, such as banks, insurance, transportation, etc., to name a few examples.
Rather, I want to focus on showing how the case has been developing in the Dominican Republic in the field of telecommunications, referring to topics that allow the reader to form a first impression regarding the phenomenon and that it is useful to understand it.
In our country, the main source of solution in the matter of adhesion contracts is given through the National Institute for the Protection of Consumer Rights, PRO-CONSUMIDOR, which is the state body created by Law 358-05, of September 2005, with the objective of establishing and regulating the policies, standards, and procedures necessary for the effective protection of consumer rights in the Dominican Republic.
However, before Law 358-05 existed, specifically in May 1998, the General Telecommunications Law No. 153-98 was adopted. One of the pillars of Law 153-98 was to assume that due to what is called “information asymmetry”, the relationship between users of telecommunications services and providers is almost always unequal. Not only in terms of information, but it is also a different relationship in the field of economic resources and time that consumers have to deal with the companies that provide services and therefore their protection is necessary.
Before continuing, I would like to point out that in addition, the Dominican Constitution of January 26, 2010, in its article 53, gives the character of consumer protection provisions a fundamental right. These are “of public order, imperative and of social interest.” The Magna Carta states that “Everyone has the right to have quality goods and services, to objective, truthful and timely information on the content and characteristics of the products and services that they use and consume, under the established provisions and standards. by the law…”. This constitutional provision ratifies the establishment of a regime of protection, guarantee, security, and defense of consumers in their relations with suppliers of goods and services.
Returning to the specific issue of telecommunications, the application of the telecommunications law and its complementary regulations, despite the legal texts; In practical terms, it has been a bumpy ride.
In fact, the Fundación Prensa y Derecho filed an appeal before the Superior Administrative Court (TSA) and accused the regulatory body of Telecommunications (INDOTEL) of not providing effective protection to consumers. The Foundation asked the court to oblige INDOTEL to submit the so-called PROCONSUMIDOR adhesion contracts so that it could carry out the corresponding review; because it understood that INDOTEL was not fulfilling its role and despite the passing of the years, a large number of contracts remained that we’re unaware of elementary user rights. Through a 2013 ruling, the court accepted the lawsuit and ordered the so-called adhesion contracts to be sent to PROCONSUMIDOR.
Subsequently, in 2015, INDOTEL and PROCONSUMIDOR signed an agreement to review, register, analyze, validate or reject the adhesion contracts signed by users and consumers of telecommunications services in the Dominican Republic.
Despite the agreement between INDOTEL and PROCONSUMIDOR of 2015, the inconveniences persist and in June of this year 2021, the appointment of a commission was announced for the elaboration of an action protocol between both entities, in order to guide the complaints of users to the corresponding institutions.
INDOTEL currently has a series of mechanisms to “fulfill” its objective of defending and enforcing the rights of clients, users, and providers of said public telecommunications services. The system is managed through the so-called User Protection Directorate (DPU), which is in charge of directing and supervising the operations of the departments that comprise it, namely: A) User Assistance Department (DAU), B) Department of Conciliation, C) Complaints Processing Department and D) Secretary of the Collegiate Bodies.
As a general principle, the client must make his report or claim in the first instance before the telecommunications service provider where he has the service or inconvenience through any of the channels that they have enabled (in person, telephone, website, social networks, etc.) and note your claim number; as well as the date it was carried out. A step forward in the process, which deserves to be mentioned, is that the user can claim directly before INDOTEL without having to exhaust a previous procedure before the provider, in specific cases of complaints of misleading advertising and incorrect use of services telecommunications for debt collection purposes.
If you do not get a response or the response is not satisfactory, in the DAU access system you can make a complaint by phone or via the website for free. The DAU also manages the statistics of cases handled and has published five documents with information for users that deal with the following aspects: (I) relevant clauses of the contracts for the provision of telephone service, internet, and cable TV, (II) protocol cancellation of service, (III) sales guide, (IV) guide for service buyers and (V) a document with 14 points that encompass the main duties and obligations of users of public telecommunications services.
Regarding the DAU, it is good to know that its fundamental mission is to provide information, guidance, and assistance to users of their rights, obligations, and claims related to public telecommunications services and is the starting point for the management of cases where INDOTEL intervenes.
For its part, the Complaints Processing Department has the function of receiving, managing, and solving all types of complaints, including those that are generated by quality problems in the service and breakdowns and the Conciliation Department aims to explore solutions to conflicts between providers and users, without the need for cases to escalate and have to reach formal legal instances.
The last instance that the user has is to go to the Collegiate Bodies and their respective Complaint Resources.
Now that we are immersed in a process of revision of the Telecommunications Law since technological changes and those derived from the pandemic, make it necessary to adapt the regulatory framework to new realities; the issue of adhesion contracts and effective consumer protection should be included in the new law.
The first thing that the bill to modify law 153-98 that INDOTEL is preparing should be aimed at simplifying processes since the issue is clearly quite bureaucratic.
On the other hand, the regulatory body should make an in-depth analysis of the failures of the telecommunications market in the country; since, although we are supposed to be in a regime of apparent competition; it is obvious that this is not the case. International experience indicates that if operators need to include “abusive clauses” in the content of their contracts with consumers and even with other smaller operators, it is because we are in the presence of market failures.
In other words, competition has a protective function for consumers and is a much more efficient means, not only in a formal sense but also in a material and vital way to avoid unfair terms. In other words, correcting market failures is the foundation or cornerstone for the system to work and it is obvious that reviewing or having pre-approved adhesion contracts and complaints procedures is not enough if we do not have real and effective competition.
It would also be important to do a thorough job to make users aware of their rights, as we are facing a lack of information, and having the information on the website is not enough. It is necessary to invest in massive information campaigns so that users know their rights and the ways to make claims effective and functional.
With regard to the statistics part of the DAU, it would also be interesting to periodically conduct surveys to determine whether the mechanisms in force are indeed working and whether consumers clearly know their rights; also if relevant and clear information is provided to users when hiring a service. It is important in this regard to bear in mind that abusive practices can occur at different stages of the relationship: before (pre-contractual stage), during its celebration (contractual stage), and in the execution stage (post-contractual stage).
Finally, it is necessary that sanctions be effectively applied to companies that with contracts or practices, in fact, may be harming consumers forcing them to pay compensation or compensation and/or fines if they proceed, because otherwise we will continue to have very complete legal texts but that is useless or unenforceable.[:]
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