The Consumer Rights Directive has recently been transposed into national laws by all the 27 EU member states.
This directive will come into force all over the EU by June 2014. One of the main objectives of this directive is the setting up of standard rules for the common aspects of distance and off-premises contracts.
These common set of rules will ensure the removal of internal frontiers and thus ensure free movement of goods and services all over the internal market.
The cross-border potential of distance-selling is not being sufficiently exploited by European consumers. One of the main obstacles includes the different national consumer protection rules.
Thus, the European Commission set up a common set of rules to be fully harmonised by the EU member states, which specifically focus on the information consumers should be given and the right of withdrawal in distance and off-premises contracts.
Information requirements for distance or off-premises contracts
Before consumers conclude a distance or a doorstep sale, sellers will be legally obliged to provide, among others, the following information:
• A description of the main characteristics of the goods or services;
• The identity/name of the trader and his contact details;
• The total price of the goods/services offered for sale, including any additional charges, such as delivery charges. If any of the above costs cannot be calculated in advance, consumers must be informed about the existence of these costs and, where applicable, the manner in which the price is to be calculated;
• In case of contracts of a subscription nature, the price quoted must include the total monthly costs;
• The cost of using distance communication if the charge is more than the basic rate;
• The method of payment and when the goods will be delivered. In case of services, when these will be performed;
• The existence of a legal guarantee of conformity for goods and, where applicable, the existence of the commercial guarantee and after-sales service.
Right of withdrawal – 14 calendar days
Before concluding the distance or doorstep sale, consumers must be informed about their right to cancel the sale if they change their mind. Under this new legislation, the cooling-off period has been extended from a minimum of seven days to 14 calendar days.
In both distance and doorstep sales, the withdrawal period will start from the moment the consumer receives the goods rather than at the time of conclusion of the contract, which was the case in doorstep sales.
In the case of service contracts, the withdrawal period should expire after 14 days from the conclusion of the contract. In addition, consumers should be able to exercise the right to withdraw before acquiring physical possession of the goods.
The Consumer Rights Directive has extended the right of withdrawal also to purchases made through online auctions, such as eBay. However, goods bought in auctions can only be returned when bought from a professional trader.
If consumers are not informed about their right of withdrawal when concluding a distance or doorstep sale, the return period will be extended to a year from the end of the initial withdrawal period. Once information on the right of withdrawal is provided to the consumer, the withdrawal period will expire 14 days after the day the consumer receives that information.
Simpler cancellation procedure
This new legislation also facilitates the procedure to actually exercise the right of withdrawal. Consumers will be provided with a model withdrawal form, which they can, but are not obliged to, use if they change their mind and wish to cancel the distance or doorstep sale.
Consumers may also cancel a sale by making an unequivocal statement they want to withdraw from the contract. It is the consumers’ responsibility to make sure they have proof of their decision to withdraw from the contract of sale and that such a withdrawal was done within the stipulated time frame.
Better refund rights
Under this new legislation, consumers have better refund rights, as the trader is obliged to reimburse all payments received from the consumer, including the costs of delivering the goods to consumers, not later than 14 days from when the trader is informed of the consumer’s decision to withdraw from the contract. Previously, the reimbursement had to be effected within 30 days.
However, the trader will not be required to reimburse supplementary costs if the consumer has expressly opted for a type of delivery other than the least expensive type of standard delivery offered by the trader.
Furthermore, unless the trader has offered to collect the goods himself, he may withhold the reimbursement until he has received the goods back or until the consumer has supplied evidence of having sent back the goods, whichever is the earliest.
Consumers’ obligations
Consumers also have a number of obligations. They must return the unwanted goods back to the seller within 14 days from when they informed the trader they wanted to cancel the sale. The consumer is also the one who has to pay the direct cost of returning the goods unless the trader has informed the consumer he will be covering the cost.
The Consumer Rights Directive imposes on the trader the obligation to inform clearly the consumer who will be paying the cost of returning goods after they change their mind.
This information must be provided to the consumer before the sale is concluded, otherwise the trader has to pay for the return of the unwanted goods. As to goods bought from doorstep sellers, if these cannot be returned by post, the trader shall, at his own expense, collect the goods.
odette.vella@mccaa.org.mt
Odette Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.