Bill streamlines consumer advertising

Finance Minister Tonio Fenech told Parliament yesterday that the amendments to the Consumer Affairs Act would streamline consumer advertising and remove any disputes.

The Bill, regulating consumers' rights, brings the Act into conformity with directives of the EU, where consumer rights are given particular importance.

Those interested in buying a product had the right to know whether what they paid for was actually what they were led to think they were buying.

Mr Fenech said the amendments were important because they carried new responsibilities. Retailers would now be obliged to produce proof that what they had promised in an advert was what was actually delivered to the consumer.

Essential things listed in contracts should be read to the buyer, similar to what a notary public did when drawing up a property contract. Nobody could assume that buyers would have read the contract. Both the seller and the buyer would now know their rights and responsibilities.

One of the five amendments prohibited the use of unjust expressions in a contract, and a seller would be obliged to remove it in conformity with the law.

Mr Fenech said that a seller would be prohibited from trying to exclude himself from his legal and commercial responsibility when a consumer died or was harmed as a result of any act or omission of the seller.

The seller would be prohibited from terminating a contract on a discretionary basis when such discretion was not also given to the buyer.

The seller would be prohibited from terminating a contract without providing a reasonable warning, unless it was for a serious reason. If a seller wanted an opt-out clause, he would have to include it in the contract. If a seller promised that he would maintain the product for 10 years, the seller would have to honour such a contract.

The seller would be prohibited from including a right to automatically renew a contract when a consumer did not indicate otherwise, or when the consumer was not given a reasonable time to decide.

The seller would also be prohibited from including clauses which tried to make it more difficult for a consumer to take any form of action.

Mr Fenech said that these amendments were all in the consumers' interests.

Consumers should not be expected to be legal experts, but they should be at ease that their rights, given by the state and the EU, were safeguarded. During the past year the Consumer Division had carried out more than 21,780 inspections in a monitoring exercise to ensure that legal provisions were adhered to. Provisions were generally being respected.

Consumer rights were not just about prices, as many were accustomed to think. The Consumer Division had neither the obligation nor the legal power to control prices, but the perception remained that the government was not doing enough to curb inflation.

In the past, the prices of specific items would be given during the budget speech. But today the department's role was to ensure fair competition. This would, in turn, ensure that prices were appropriate. There were mechanisms that aimed to ensure that no one abused the system by trying to prevent competition.

The Consumer Division had monitored various establishments including supermarkets, restaurants and butchers, to have a broader perspective over some products considered as market leaders. These ranged from food items to personal hygiene products, and their prices were assessed in line with the international market. This would allow the government to assess whether there was fair market competition. If the price of coffee went down, was there any reason for its price to go up in Malta? This could either be because there was no competition, or because of a cartel.

Mr Fenech said various white goods dealers had been inspected last June, so that when the trade fair came around, the prices could be compared to gauge whether genuine discounts were being offered. This exercise had revealed that the discounts were genuine. The exercise would be carried out again this year.

The Standards Authority had requested an exercise to investigate shops selling items with information in other languages. Of the 230 shops investigated, 180 were found to be selling items with information in a foreign language that was neither English nor Italian.

The department had also investigated a number of supermarkets, comparing shelf prices with prices charged at the till to ensure that these were the same. In some cases, buyers believed they were getting a bargain, only to pay a different price at the counter. Most were genuine mistakes.

Such exercises would be carried out again in the future. Mistakes could indeed occur, but not three and four times.

Travel agencies had also been investigated, to ensure that they delivered on the promises they made in their advertisements.

Mr Fenech said that before launching the subsidy scheme for solar water heaters, the government had collected the prices from various sellers. It was not the first time that prices had gone up after the government proposed such a scheme and thus, it was the seller, rather than the consumer, who benefited.

The government had done this before approving the shops to be included in the scheme to ensure that the customer got the entire rebate.

Concluding, Mr Fenech said that various other structures ensured that consumer rights were effectively safeguarded, but there was always room for improvement. The legislation being proposed, which was a framework of protection, was something everyone would benefit from.