Belgian court slaps French insurer SFAM unauthorized debits

The court’s decision follows a petition from the Economic Inspection division of Belgium's Federal Public Service (FPS) Economy, which received over 1,200 complaints about SFAM’s operations in recent years. SFAM, a French company that offered insurance policies to customers purchasing mobile phones, tablets, or computers from stores like HUBSIDE.STORE (formerly SWITCH), Vanden Borre, or FNAC, has come under fire for deceptive practices.

Deceptive contracts and unjustified charges

Consumers often signed up for insurance coverage for their devices without realizing they were also agreeing to additional, unnecessary services. SFAM systematically withdrew funds from customers' bank accounts via direct debit without explicit consent, sometimes amounting to several hundred euros per month—far exceeding the agreed-upon amounts. Moreover, the company unilaterally modified contract terms, making it nearly impossible for consumers to terminate their contracts through SFAM’s customer service.

Belgian Economic Inspection takes action

The FPS Economy's Economic Inspection responded to the wave of complaints by launching an in-depth investigation into the practices of SFAM and other companies under the French INDEXIA group, SFAM's parent company, which is currently undergoing bankruptcy proceedings in France. The investigation was comprehensive, identifying and penalizing the reported irregularities. Belgian authorities also collaborated with their French counterparts, the DGCCRF, to address the issue.

“We are very pleased that our investigation has resulted in halting these harmful activities,” said Lien Meurisse, spokesperson for the FPS Economy. “We strongly encourage consumers who believe they have fallen victim to unfair commercial practices to report it via ConsumerConnect. This ruling underscores that it is always worth the effort to file a complaint. Now, more than ever, it is crucial that consumers report any unauthorized withdrawals by SFAM after July 3, 2024, so that the Economic Inspection can take the necessary steps to enforce the penalties.”

SFAM's operations suspended by FSMA

The FSMA, Belgium’s Financial Services and Markets Authority, had already suspended SFAM's activities on May 17, 2023, following actions by its French regulator. SFAM and other INDEXIA group companies were barred from selling insurance products in Belgium. This suspension followed FSMA’s earlier measures in 2022, which prohibited the sale of insurance agreements with variable premiums for multimedia devices in Belgium. Notably, the FSMA’s suspension affected only SFAM's insurance operations and did not impact its other services.

Consumers are now advised to remain vigilant and report any unauthorized activity by SFAM to the authorities, as the company’s practices remain under scrutiny.