How it could soon become much easier to cancel a contract in Germany

Especially for contracts that are automatically renewed, many consumers get out of them much later than they would like. Consumer protectors and politicians are therefore calling for it to become easier to cancel a contract. 

"Too often, it costs consumers unnecessary time and effort to cancel contracts," Tabea Rößner, network policy spokeswoman for the Green Party, said to DPA. 

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"Anyone who has reached the end of a contract and wants to cancel it has already experienced it: it is not that easy."

The so-called “button solution” has been in effect for online purchases since 2012 - customers simply make their purchases by pressing a button with a description such as "Order now with an obligation to pay" (Jetzt zahlungspflichtig bestellen). 

Yet the German government has neglected consumers when it comes to terminating contracts for far too long, said Rößner. 

"While it’s easy to enter the contract, it’s not easy to get out of it,” she said. 

The Green Party's Tabea Rößner, pictured here in November 2017. Photo: DPA

The following are ideas which German politicians and consumer ministers have proposed to change that.

Contracts with automatic renewal

Whether an electricity provider, fitness studio, newspaper subscription, or Bahncard (train pass) - many contracts are automatically extended by one year if they aren’t terminated in time. 

"I should be able to terminate every three months," said the head of the consumer advice centers, Klaus Müller. 

Currently, people too often miss the termination date and are then are bound to the contract for another year, said Müller. But those who have not seen the inside of their gym for a long time should not have to pay more for it.

The cancellation button

The Greens are pressing for online cancellation to be as easy as setting up an online contract. No tedious searching for an e-mail address in the copyright page (labelled as “Impressum” on German websites) and no faxes. 

Rather, cancellation should be possible simply by clicking on a clearly visible cancellation button.

"Anyone who can easily click into a contract must also be able to easily click out again," says Rößner. Companies should convince their customers to continue their contractual relationship through offering a good product or service - not through cumbersome termination procedures, she said.

Confirmation by email

At present, consumers are often not sure if their cancellation emails have been received or not.

Acknowledgements of receipt are rare, and the simple sending of a cancellation notice is not legally considered proof.

That is why the Greens are demanding obligatory acknowledgements of receipt for emails asking for cancellation of contracts - so that the sender can legally show that they cancelled in time.

 "It cannot be that a horse-drawn carriage is needed for legal certainty regarding the receipt of a letter,” said Rößner.

A confirmation is already required when a contract is concluded, which Rößner says should also apply to the final termination.

Photo: DPA

Governmental plans

Consumer Minister Christine Lambrecht’s (SPD) draft legislation, which limits the duration of contracts to one year, has not yet been voted on by Germany’s federal ministry because the economics ministry has expressed concerns. 

With the law, Lambrecht also wants to ensure that contracts may only automatically be extended by a maximum of three months.

Consumer protectionists view the initiative positively. "It is certainly the case that there are very occasional attractive offers, for example when I combine a mobile phone with a 24-month mobile phone contract," said Müller.

Yet that doesn’t always apply. "It is not a law of nature that a long contract is automatically a favorable contract. In other European countries, shorter contract periods have even led to falling mobile phone prices.

The consumer protection ministry also wants to take action against phone advertising for electricity contracts.

This is a long overdue step for the consumer advice centres: people who are at home a lot are sometimes maltreated several times a day with illegal telephone advertising, said Müller. 

"This is not only unpleasant, but also expensive," he added.

For customers, it’s too easy to get out of such a phone call by signing up for a new cell phone contract or an insurance company that you didn't want at all, he said. 

"Such contracts must actually be confirmed in writing so that I have another chance to stop [and think about the offer]," Müller said. 

The ministry has so far only made a suggestion to stop phone advertising for electricity contracts, and not other types of services.