Exemplary Penalties: Dead Man’s Family vs. HOT Cable Company

After years of dragging their feet, the Israeli courts are setting an example by using this special type of “punishment” more frequently.

What is the definition of “Exemplary Penalty”? This is a monetary sum added to the court decision against the person, organization, company, etc., who abused the other side’s rights in any way.

To explain this concept more thoroughly, I will relate a recent court decision (February 2010) by the Honorable Judge Ayal Doron (Small Claims Court NO. 09-09-6569, Haifa) against HOT Cable Company.

Mr. Smith died in July 2008. He was a client of HOT (the defendant) and paid 174 shekels a month in subscription fees. The plaintiffs, who were the beneficiaries of Mr. Smith, requested in writing to cancel the cable subscription in October 2008. It is important to emphasize that the plaintiffs did not keep a record or a copy of the written correspondence.

Five months after the request was made, the defendants were still charging the bank account of the plaintiffs. In April 2009 the plaintiffs called the cable company requesting immediate reimbursement.

The cable company promised they would reimburse them and cancel the cable subscription. But in May 2009 the plaintiffs were still being charged! Another call was made by the plaintiffs. Not only did they request a cancellation of the subscription, but also requested interest to be paid on their reimbursement. Their request was granted, by phone.

In June 2009 they were charged yet again. But this time HOT informed them that the subscription was finally being cancelled from May 2009 – although the cancellation request was made in October 2008! HOT Cable also promised to reimburse the plaintiffs for 1350 shekels plus interest. A few days after this conversation, another phone call was made. Another HOT representative informed the plaintiffs that the money would be paid without interest. Not only that none of the requests made by the plaintiffs were carried out, but the plaintiffs also claimed that the representatives acted in a rude and aggressive manner.

A lawyer finally entered the process at the end of June 2009 (8 months after the first request of cancellation and almost a year after the death of Mr. Smith). As a result of the lawyers’ intervention, in August 2009, HOT Cable sent the plaintiffs a check in the amount of 1229 shekels. This sum was sent without any explanation whatsoever. This was the amount that HOT decided should be paid to the plaintiffs.

The plaintiffs claimed that HOT Cable used a strategy of “wearing down the customer” and that eventually they would just give up their claims.

The law stipulates that when a client requests a cancellation of a monthly contract (such as cable, cell phones, etc.) his request must be respected. If the company providing the service continues to charge them, this will be considered an illegal charge. The same law also stipulates that to be entitled to receive an exemplary penalty, one must send a written request to the said company.

In our case, the plaintiff could not prove that he sent a letter (all he would have had to do was send a registered letter and keep the receipt), but there was no disagreement between the parties when the plaintiff did request to be disconnected to the cable service. Therefore the court accepted that the case was being judged as if a letter had been sent. Because the plaintiffs were unlawfully charged more than once, the law permitted them to ask for up to 50,000 shekels in exemplary penalty.

After the court weighed the evidence carefully, the Honorable Judge ruled in favor of the plaintiffs the sum of 10,000 shekels, plus interest and another 350 shekels for court expenses.

What can we learn from this case? The Small Claims Court is a wonderful tool to defend your consumer rights. When dealing with these big companies, the customer must be prepared from the first encounter, meaning keeping records of all phone calls (including who was spoken to, date and time, and what the subject was), sending registered letters and keeping the receipts as proof, and keeping all bank and credit card statements that show the money was actually paid.

Next time you encounter a “giant’, do not despair. You have one more tool in your favor.

 
Sincerely,

 
Tzvi Szajnbrum, Attorney at Law