False free mobile insurance, in Belgium it is over

Insurance contracts for mobile phones, computers or tablets, which start with a free period, are now banned in Belgium, Consumer Protection Secretary Eva De Bleeker announced on Friday.

The store change scandal ignites the debate

This decision follows the Switch stores scandal, for which many testimonies from customers feeling scammed were unearthed earlier this year. The Financial Markets Authority (FSMA) had decided to carry out inspections at different brand outlets and had found the non-compliance with some legal or regulatory provisions, in particular with regard to customer information and driving rules. Concretely, Switch employees were signing expensive insurance contracts, without really saying it, and customers only realized it a few months later, after a free period. After its inspections, the FSMA banned Switch from marketing insurance products in Belgium. The brand has now disappeared and the stores have been partially taken over by Lab9 Stores.

“Periodic premiums must be distributed equally over the term of the contract”

At the same time, legislative work to prevent these practices from occurring led to a royal decree, countersigned by Secretary of State De Bleeker and Ministers Demargne and Van Peteghem. The general principles of insurance are not called into question, but it is now forbidden to offer offers starting from a free period. “From now on, the periodic premiums must be equal and spread equally over the term of the contract. Increasing teasers and bounty payments will no longer be possible“, Specifies the cabinet of the secretariat of state.