Early contract cancellation fines capped for Israel’s fixed voice, internet and pay-TV subscribers

9 Nov 2011

Israeli telcos are no longer able to charge customers high fines for cancelling contracts early, after legislation designed to cap exit fines came into force fully yesterday, Globes Online reports. The Israeli Ministry of Communications (MoC) first introduced the legislation back in August 2011, although it initially only applied to new subscribers, with it now having been extended to cover all existing telecoms customers. Under the regulation early cancellation charges are capped at a maximum of 8% of a subscriber’s annual monthly bill multiplied by the number of months remaining on their contract. While the new legislation applies to all customers signed up to internet access services, cable and satellite television or fixed line telephony products, the one exception is that it does not cover those subscribers with an average monthly bill of more than ILS5,000 (USD1,356); such customers are still tied to exit fines as stipulated in their contracts. Mobile voice subscribers benefitted from a similar move back in February 2011 when exit fines on cellular subscriptions were also capped at 8% of the monthly bill for each month remaining on the contact. Commenting on the development, minister of communications Moshe Kahlon said: ‘The era in which customers wanting to switch providers were forced to pay unreasonable fines is over. As of today, the customer will benefit from the fruits of real competition.’

Israel, Ministry of Communications