Revamp of consumer rights in Europe?

A watered-down version of a directive on consumer rights originally proposed by the European Commission way back in October 2008 has finally seen the light of day. With the recent blessing given by the Council of Ministers to a new law regulating business- to-consumer relationships in Europe, consumers should, from now onwards, enjoy stronger protection when making a purchase in any member state of their choice and particularly when shopping online.

The law is a far cry from the full harmonisation of consumer rights in Europe which the Commission had in mind- Mariosa Vella Cardona

Indeed, the journey towards the adoption of the Consumer Rights Directive has been a bumpy and arduous one, peppered with various compromises between all the players concerned. The law which has now been adopted is a far cry from the full harmonisation of consumer rights in Europe which the Commission had in mind when it set out on the task of revamping the four directives which until then safeguarded the rights of European consumers.

Nonetheless, not all has been lost. There are still a number of benefits for both traders and consumers in this new legislative instrument. The recently adopted directive sets about eliminating hidden charges and costs on the internet particularly when consumers are tricked into paying for “free” services, such as horoscopes or recipes.

Traders are being obliged to disclose the total cost of the product or service, as well as any extra fees. Online shoppers will not have to pay charges or other costs if they were not properly informed before they place an order.

A number of additional options are sometimes offered to consumers during a purchase process over the internet, such as travel insurance or car rental when purchasing a plane ticket. Consumers are often forced to un-tick those boxes if they do not want to purchase these extra services. Pre-ticked boxes have now been banned across Europe.

A major bone of contention relates to the harmonised 14 calendar day period as a cooling-off period for distance and off-premises contracts. This means that consumers entering into, for example, an online purchase or an over the phone purchase can, as a rule, within such a period, return the goods to the trader for whatever reason if they change their minds. Such a period is extended to one year if the seller failed to clearly inform the customer about such a right of withdrawal.

Though previous EU laws laid down a minimum period of seven days, member states were free to legislate over and above this minimum seven day period and provide consumers with a longer cooling-off period. Indeed, Malta was one of the countries which availed itself of such an option and provided consumers with a 15 day cooling-off period.

Such an option is now, however, no longer available to member states which must all adhere to the 14 calendar day period prescribed by the new directive. Obviously, for Maltese consumers this will signify a lessening of rights since the cooling-off period is set to decrease rather than increase. The same cannot be said for consumers in other member states such as in Italy or in the UK where consumers enjoyed shorter cooling-off periods.

In terms of the new directive, the goods must be delivered to the consumer within 30 days or otherwise the buyer will have the right to cancel the purchase. The withdrawal period will start to run from the moment the consumer receives the goods. Traders must refund consumers for the product within 14 days of the withdrawal.

If traders want the consumer to bear the cost of returning the goods, they have to clearly inform consumers about this before-hand or otherwise they would have to pay for the return themselves. Traders must clearly give at least an estimate of the maximum costs of returning bulky goods bought over the net or by mail order, before the purchase, so that consumers can make an informed choice before deciding from whom to buy.

Consumers have also been provided with a model withdrawal form which they can, but are not obliged to, use should they wish to exercise the right of withdrawal.

The new legislative instrument has also introduced a number of measures regulating the purchase of digital content. Information on digital content must be clearer, including that about its compatibility with hardware and software and the application of any technical protection measures, for example, by limiting the right for the consumers to make copies of the content. Consumers will have a right to withdraw from purchases of digital content, such as music or video downloads, but only until the moment that the actual downloading process begins.

In the case of off-premises contracts, EU member states are still free to maintain existing national legislation prohibiting the trader from collecting the payment during the withdrawal period after the conclusion of the contract. The directive also provides for a list of minimal information that the consumer must receive when buying on-premises, thus allowing member states to add supplementary information requirements.

The aim of the original proposal tabled by the Commission was to create legal certainty for businesses and offer better protection to consumers. The Commission had sought to do this by insisting on the full harmonisation of consumer rights across Europe. The final product may be said to be a compromise reached by all concerned in order to arrive at a conclusion. Certain aspects such as delivery deadlines and the right of withdrawal period have been fully harmonised thereby providing industry with legal certainty when carrying out cross-border trade.

On the other hand, member states have been left free to retain higher standards in other areas such as in so far as information requirements are concerned when effecting a transaction across the counter. What the end result will signify in practice to both industry and consumers is yet to be tried and tested in the years to come.

mariosa@vellacardona.com

Dr Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is the deputy chairman of the Malta Competition and Consumer Affairs Authority as well as a member of the National Commission for the Promotion of Equality.