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Estonian telecom billing ex-customers over year after contracts terminated

Person using a laptop.
Person using a laptop. Source: Kairit Leibold/ERR

In June 2022, telecommunications company Levikom notified many of its customers that their contract had been terminated. Over a year later, however, it started billing them for unpaid equipment rental fees. Despite 17 consumer disputes already being settled in the consumers' favor, Levikom has continued to contact its ex-customers, threatening to send their bills to collections.

Two years ago, Levikom ran into financial difficulties, leading to their base network being gradually shut down over their debts. At the beginning of June 2022, many of the telecom's customers received notices stating that the company was restructuring, and in connection with this was terminating their contract effective June 5.

Levikom further stated that the customer would thereafter be provided service by Rednet OÜ, the continuation of service would take place without any technical disruptions, and to sign up with Rednet, customers would have to contact the new company themselves.

Last October, however – a full year and four months later – many of these former customers received a letter from Levikom in which the company demanded the payment of bills that had accumulated in the meantime.

The recipients of these bills were baffled, as evidenced by the claims received by the Consumer Disputes Committee, an independent and impartial body under the watchdog Consumer Protection and Technical Regulatory Authority (TTJA).

In a typical case, a former Levikom customer described receiving a payment reminder letter from the telecom dated October 3, 2023, stating that they have an outstanding bill for equipment rental from June 2022 through September 2023. Amounts owed ranged from €60-131.

On October 18, Levikom sent the customers a new letter, notifying them that the new internet service provider (ISP) was supposed to inform customers about equipment use and conditions.

The company's ex-clients informed the Consumer Disputes Committee that following the termination of their contracts with Levikom, they had signed up with Rednet instead, whom they have also paid for services, but that they had no idea that this service would be transferred to Rednet without the equipment rental going with it, especially considering that the service could not be provided without this equipment.

In one consumer complaint, the former customer described reaching out to Levikom themselves after the company sent out its notice of termination to ask what they should do with the equipment they had been issued. A Levikom customer service representative replied that they can either keep the equipment or dispose of them as waste.

In another, the customer recalled how they had wanted to cancel their service with Levikom in April 2022, but could not get ahold of the company's customer or technical support by either email or phone, and the door at their Tallinn office was locked. They went ahead and signed up for internet service with Telia instead, but were unable to return Levikom's equipment to the company.

The telecom, meanwhile, saw things differently. Levikom explained to the committee that they did in fact terminate contracts for communications services in June 2022, however their equipment rental agreements still remained in effect.

"The consumer couldn't have assumed that they would be given the equipment free of charge or could rent it free of charge," Levikom asserted. The consumer has the right to continue renting the equipment following the termination of communications services, it continued, adding that the telecom couldn't unilaterally cancel the equipment rental; that should have been done by the customer.

"The merchant agrees to waive the rental fee claim if the consumer can prove that they have attempted to return their equipment to Levikom following the termination of their contract but it wasn't possible to do so," the telecom told the TTJA.

Committee: No evidence of monthly bills

The Consumer Disputes Committee remained unconvinced by Levikom's arguments, however, and to date has ruled on 17 cases, all in the customer's favor.

In one such decision, the committee noted that Levikom hasn't provided any evidence whatsoever that it had informed the consumer of the continuation of the equipment rental or invoiced them monthly for it.

While Levikom claimed that the customer became liable for rental fees after the company had issued rental invoices following their reminder letter, the committee disagreed.

"A reminder letter dated October 3, 2023 and issuing an invoice 15 months after the termination of a contract does not prove the continuation of a rental agreement," the committee emphasized.

The TTJA committee likewise found that pursuant to the contract, Levikom had two obligations: to provide internet services and to provide the necessary equipment for its use. This indicates that the equipment was in the consumer's possession precisely for the purpose of accessing this internet service – meaning that these were interrelated conditions for the fulfillment of this contract.

"The merchant hasn't provided any proof of having negotiated with the consumer regarding equipment use fees following the termination of their contract," the committee noted in its decision. "On the contrary, the merchant stated that the switch to the new operator would take place without any technical disruptions and that the consumer has to sign up with the new operator, which [the consumer] did, and paid the new operator for the provision of service."

The committee found that the notice issued on June 1, 2022, cannot be regarded as a change of contract and continuation of the rental agreement.

It moreover maintained that Rednet was under no obligation to inform customers of the conditions for the continued use of the equipment in question, adding that if Levikom believes that this equipment belongs to them, then it is Levikom that should have informed customers about the conditions of the further use of the equipment.

The committee maintains that Levikom behaved misleadingly in terms of the consumer.

The TTJA Consumer Disputes Committee issued its first decision in the consumer's favor on January 2 of this year, with more folkowing on January 25 and 26, but Levikom has nevertheless continued demanding money from its former customers.

For example, just this past Friday, January 26, one such former customer received a text message containing a politely-worded collections threat: "Dear equipment rental service customer. To avoid your debt being sent to a collection agency, please pay your bills or contact [email protected]."

According to Estonia's commercial register, Levikom Eesti has not submitter a sales tax declaration whose deadline was January 22, and as of January 30 has tax arrears amounting to more than €254,000.

As of the fourth quarter of 2023, the company had no employees and a taxable turnover of just over €26,000.

ERR sought comment from Levikom as well, however owner Tõnis Palts said that as negotiations are currently underway with investors, he won't be able to respond any earlier than Thursday.

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Editor: Aili Vahtla

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