Companies must now inform customers of contract extensions

2:30 min

Soon, you will not need to be worried about being surprised by the automatic renewal of your gym membership or mobile phone contract. Beginning Sunday, 1 March, companies will be required to inform customers by paper letter before a contract is automatically renewed.

Amidst the after-work bustle in the main square in Liljeholmen in Stockholm, Radio Sweden spoke with Hind, who has several times ended up continuing contracts that she thought had expired.

"I think it is very hard," Hind says, "and it often happens that you speak with the company and they say that the contract will end after a month, but then it does not end. So, I think that is really bad."

Birger, from Stockholm, prefers to avoid signing any contracts, because it is difficult to keep track of them.

"If you do sign a contract, read the terms and make sure to cancel when you do not want it any more," Birger says.

But in general more and more Swedes are signing these contracts with companies, which can include subscriptions, phone contracts and internet dating services. Maria Wiezell, consumer advisor for the Swedish Consumers' Association, tells Radio Sweden that one of the big problems she sees is with gym memberships, where someone thinks they are signing up for a certain period of time.

"But once that period has run out," she says, "it gets extended another year. And maybe I do not want that, and then it costs several hundred kronor per month. After one or two years, you end up paying a lot of money for no reason," Wiezell says.

But beginning this Sunday, 1 March, a new law will require companies to mail out a written reminder about the contract extension, at least a month before the original contract expires. Wiezell says that this has been eagerly anticipated. However, she points out that consumers should still keep track of how long the contract lasts. Today there are a lot of contracts signed online and in that case people should print them out and keep a paper record.

And it is also important to be aware of what comes in the mail, Wiezell says.

"We hear a lot of people say: Oh, maybe they sent a letter, but I thought it was an advert. And because I wasn't going to stay with them, I threw it out. And they have just thrown out precisely what companies are now required to send to inform them about the contract extension. And that is very worrying," Wiezell says.