The 2015 edition of the Consumer Conditions Scoreboard analyses how the Single Market is working for European consumers and also identifies the constraints hindering its full function.
The Consumer Conditions Scoreboard focuses on three elements: knowledge and trust; compliance and enforcement; and complaints and dispute resolution.
Consumer knowledge and trust are crucial to the full development of efficient markets. Unfortunately, despite the numerous consumer awareness campaigns carried out in all EU member states, consumers’ awareness of some key rights guaranteed by EU legislation remains limited.
For instance, only 41 per cent of European consumers know that they have the right to free repair or replacement of defective goods. Malta scored higher than the EU average, as 60 per cent of Maltese consumers answered correctly to the question on faulty products and applicable remedies. The studies also showed lack of awareness regarding the right to a cooling-off period in relation to distance purchases. Only 56 per cent of European consumers were aware of this right. Maltese respondents scored 47 per cent in this regard.
The Scoreboard also revealed retailers were not always aware of their legal obligations towards consumers. In fact, only a third know that consumers are entitled to free repair or replacement when a good is defective and the fault has not been caused by the consumer. In this survey, Malta scored the highest percentage, as 66 per cent of Maltese retailers answered correctly to the question on faulty product guarantees.
Another important factor for the proper functioning of the markets is consumers’ trust in organisations that protect their rights. A lack of trust may reduce consumers’ willingness to engage actively in the market.
The 2015 scoreboard reveals that consumer trust in public authorities stands at 61 per cent in the EU. Sixty-nine per cent of Maltese consumers have trust in public authorities and this augurs well and acknowledges the work carried out by the authorities.
The scoreboard also examines consumer conditions in the Digital Single Market, reporting that half of European consumers bought goods or services over the internet in 2014. Most consumers, however, report buying online only from their own country.
Product safety is essential for consumer confidence
In fact, only 15 per cent of European consumers who buy online said they purchased goods from another EU country.
In Malta this percentage stands at 39. In fact, consumers in smaller member states have a stronger tendency to shop across borders because local supply and variety is limited and better price deals may be found. However, the scoreboard results suggest that the incidence of cross-border online purchases within the EU is considerably under-reported, since consumers are not always aware that they are buying from another EU country.
Main consumer concerns when buying online include doubts on payment security, fear of receiving wrong or damaged goods, delivery costs and long delivery times and difficulty in solving problems if something goes wrong.
Product safety is also essential for consumer confidence. The scoreboard reports that 69 per cent of consumers in 2014 (Malta 66 per cent) think that all non-food products placed on the market are safe. Seventy-five per cent of retailers are even more confident. As to product safety warnings, a third of retailers who sell non-food products (33 per cent) indicated that public authorities have issued product safety warnings in their sector in the last 24 months.
Effective enforcement of consumer legislation is also crucial to creating trust in the marketplace. It is also important for businesses as it provides a level playing field across the Single Market.
At EU level, the Consumer Protection Co-operation Regulation provides a framework for cross-border enforcement co-operation authorities to ensure that consumer legislation is complied with across the Single Market.
Through this co-operation, member states’ authorities work together to stop infringements committed by companies across borders.
The extent of compliance with consumer regulations and their enforcement is assessed through consumers’ and retailers’ experiences with illicit commercial practices.
The Consumer Conditions Scoreboard reports that four in 10 (40 per cent) consumers feel pressured by persistent sales calls or messages.
In Malta, this amounts to 31 per cent of the respondents. Nineteen per cent of Maltese consumers (EU average 30 per cent) say that they have come across advertisements claiming that a product was available for a limited time but later realised this was not the case. On average, 15 per cent of Maltese consumers report that they have encountered unfair commercial practices during their shopping.
Asked about the monitoring efforts of public authorities, the majority of retailers (66 per cent) agree that public authorities actively monitor and ensure compliance with consumer legislation in their sector. In Malta 61 per cent of retailers replied positively to the monitoring of public authorities.
Complaining and getting effective redress can help reinforce confidence in the shopping environment. With the coming into force of the Alternative Dispute Resolution Directive, consumers will be able to turn to quality ADR entities to settle their contractual disputes with traders, both domestic and cross-border, in almost all business sectors.
In addition, an EU-wide online dispute resolution platform will be operational from January 9 for disputes that arise from online transactions.
Malta has ranked high in relation to trust in out-of-court bodies. According to the scoreboard, the proportion of retailers willing or obliged to participate in ADR schemes in Malta is 53 per cent.
This augurs well for Malta since the ADR directive is to be implemented in January.
odette.vella@mccaa.org.mt
Odette Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.