Updated | Regulator's €10,000 fine on Melita plc over inaction on cancellation requests confirmed on appeal

The Administrative Review Tribunal has upheld a €10,000 fine imposed by the Malta Communications Authority (MCA) on telephony and internet service provider Melita plc.

MCA had imposed the fine in December 2014 after finding that the company had repeatedly failed to honour its obligations regarding the process for termination of its services.

In 2014, the MCA had said it had investigated five consumer complaints which alleged that the communications provider did not act on requests to terminate their subscriptions.

The subscribers had notified the company of their wish to discontinue their subscriptions 30 days in advance, as per the terms of their contracts, however the services were either not discontinued after the 30 day period and/or bills continued to be sent to the subscribers, in spite of their cancellations.

The Authority had imposed an administrative fine of €1,000 on Melita over a similar customer complaint in 2014 and had also been involved in identical disputes between the company and subscribers in 2010, 2011 and 2014, it said.

At the time the fine was issued, the MCA had said that Melita only took remedial action after the matter was brought to their attention by the Authority and warned the communications provider that it would be “closely monitoring the situation to ensure all procedures are followed.”

“The MCA in these instances considers that Melita, by issuing bills for periods for which the subscribers had expressly requested Melita not to continue to provide further services, acted in breach of the [law].”

Melita had filed an appeal to the decision, arguing that the Authority was not entitled to issue fines, that it had not breached any laws and that the complaints themselves had not been identified in order to allow the company to verify and investigate them. The disputed bills had been issued during the company's changeover to a new IT system, it claimed, adding that problems were to be expected to crop up during this process.

The company also objected to the “disproportionate and unreasonable” fine it received, when compared to the contravention, as well as its impact on the market and on the consumer.

But in a decision handed down today, the Administrative Review Tribunal said that there was no doubt that the MCA was competent to issue fines on matters falling within its remit. “Basically, the defendant Authority, rightly in this Tribunal's opinion, was not satisfied with the simple existence of the user's right [to cancel their subscription by giving not more than one month notice] as laid out in Regulation 36(1) of Subsidiary Legislation 399.28 in principle, but rather, insists that this right be effectively exercisable and exercised in practice.”

Holding the company's breach to have been, in reality, a continuous one, the Tribunal observed that it was “difficult to believe” that the company's inaction with regards to several requests for termination of subscriptions was down to a change in the IT systems “and not because it voluntarily chose not to observe the full spread of its obligation to grant its subscribers the right to terminate their contract at any time and in a simple manner.”

In a decision handed down this morning, magistrate Gabriella Vella dismissed the application, holding that despite the fact that Melita plc had revoked the disputed bills and refunded any payments made in connection with them, this “changed absolutely nothing from the situation for the simple reason that these bills, as the company well knows, should never have been issued.”

Melita reacts

In reaction, Melita said the decision refers to cases dating almost three years ago at a time when the company was investing in a major IT upgrade of its Customer Relationship Management software that had presented some major challenges during its implementation.

Moreover, the company said the process for termination of contracts has since been reviewed and updated in full conformity with all legal requirements.

“Melita is making significant efforts in improving the service to its customers and last December, the company launched 4 Customer Service promises to serve its customers better and to provide a clear expectation of the service levels that customers should demand from Melita,” the statement said.  

The company pointed out that in addition to the Customer Service Promises, it has introduced a complaint procedure promising a reply within 1 working day. Customers just have to send an e-mail to [email protected]

“If a customer is still unhappy after the complaint procedure is exhausted, then the complaint may be lodged directly with the Chief Executive Officer, by emailing haraldroesch@melitaltd.com”

Melita is also publishing the average call waiting time to reach its Customer Care Centre on a weekly and monthly basis. Results may be viewed here: https://www.melita.com/about_category/customer-care