Automatic contract renewals restricted
Since March 1, 2022, contracts with long terms – also known as permanent debt contracts – such as for fitness studios or energy tariffs, have only been allowed to be automatically extended after the initial contract term if they no longer specify a further fixed contract term, but run for an indefinite period and can be terminated with a maximum notice period of one month. This means for customers: After the end of the first contract period, if they want to end the contract, they can get out of the agreement at the latest one month after receiving notice of termination. Stiftung Warentest has also adjusted the provisions that apply when subscribing to the magazines test and Finanztest or a test.de flat rate.
But beware: The old regulations continue to apply to contracts concluded before March 1, 2022. This means that automatic contract extensions remain possible for up to one year.
Also, not all contracts are covered by the new rules. Insurance contracts, for example, are excluded.
The changes apply to telecommunications contracts (e.g. mobile phone or landline contracts) – and have been since December 1, 2021 and also for new and old contracts.
Easier to cancel with the new “cancellation button”
Since July 2022, websites through which consumers conclude long-term contracts must now also have an easy-to-find and legible cancellation button (“cancellation button” according to Section 312k of the German Civil Code). This should make it easier for consumers to get out of permanent contracts. The button (or link) must be labeled “Cancel contracts here” or be worded in a similarly clear manner. The law applies, for example, to mobile phone contracts concluded online, DSL contracts, music and streaming offers and magazine subscriptions concluded via the Internet. However, websites offering financial services are excluded from the law.
However, a study of 840 websites carried out by consumer centers and other consumer associations shows that the providers’ websites often do not display the cancellation button as required by law. In just under 42 percent, the mandatory cancellation button was missing entirely, in another 12 percent it was hidden or labeled inadmissibly. It was only properly displayed in around a third of the cases. The associations warned 152 companies. Consumers can use the online form to report websites that misrepresent the termination option to the consumer advice centers.
If there is no cancellation button on the provider’s website or if it is not designed correctly, consumers have an immediate right of cancellation. After clicking on the cancellation button, the customer is taken to a second page. There he must confirm his cancellation by clicking on “Cancel now”. Thereafter, the termination shall be deemed to have been received by the company. Finally, the company has to confirm the cancellation to the customer, for example by e-mail.
Law shortens notice periods
Entrepreneurs may no longer contractually provide for a notice period longer than one month for the affected continuing obligation contracts. Previously, this period was three months to the end of the contract. Consumers can therefore terminate these contracts with a maximum of one month’s notice before the end of the initial contract period.
Insurance contracts, for example, are also excluded from this regulation.
Assignment of Monetary Claims
On October 1, 2021, the first part of the law for fair consumer contracts came into force. Since then, companies can no longer exclude the assignment of monetary claims in their general terms and conditions. This becomes important when consumers use legal service providers, for example, to enforce claims for them and demand money back for them in the event of flight delays.
Conclusion of energy contracts over the phone
Since October 2021, the following has applied to electricity and gas supply contracts: they can no longer be concluded exclusively over the telephone, but must also be confirmed by the customer in text form, for example by e-mail, SMS, letter or fax.