The European Parliament has just adopted the Consumer Rights Directive proposed by the European Commission in October 2008. The European Commission declares that this vote clears the final hurdle before the new rules can become a reality for European consumers.

The proposed directive targets electronic commerce and upgrades existing EU consumer rights vis-à-vis online shopping. The main aim of these new rules is to boost consumer confidence and encourage consumers to buy from other EU countries, therefore customers more choice and access to competitive offers.

The new directive proposes 10 important changes for consumers. The first of these is the elimination of hidden charges and costs on the internet. The new rules will protect online buyers from falling victim to ‘cost traps’.

This happens when consumers are led to believe they are subscribing to free services, such as ringtones or recipes, but in reality there is a cost involved. The Consumer Rights Directive stipulates that consumers must explicitly confirm that they understand they have to pay a price.

The second advantage for consumers is more price transparency. Traders have to disclose the total cost of the product or service. The price advertised or quoted should be inclusive of taxes, all additional freight, delivery or postal charges.

In other words, online shoppers will not have to pay charges or other costs if they were not properly informed about these charges before they placed the order.

The Consumer Rights Directive also bans pre-ticked boxes on websites. When buying a particular product or service online, such as a plane ticket, some companies tend to include other purchases by default unless these were ticked off by consumers, such as travel insurance or car rental. The new directive bans these pre-ticked boxes across the EU.

Another important change relates to the cooling-off period. The directive extends the amount of days, during which time consumers can withdraw from an online sales contract, to 14.

This is double the amount of days legally prescribed by EU law today. However, it is worth mentioning that in Malta the cooling-off period is 15days, hence much longer than what EU law legally prescribes.

During the cooling-off period, consumers can change their mind, cancel a sale and return goods for whatever reason. Furthermore, the Consumer Rights Directive provides that if the seller does not clearly inform customers about the cooling-off period, the return period will be extended to a year.

The right of withdrawal will also be extended to online auctions. However, the goods bought in auctions can only be returned when bought from a professional seller.

Once a sales contract is cancelled, traders must refund consumers within 14 days of the withdrawal date. This is half the amount of days during which traders have to return the payment to consumers under the Distance Selling Regulations.

The directive also stipulates that consumers are to be provided with a Standard Withdrawal Form which they can use if they want to, should they change their mind and wish to withdraw from a contract concluded at a distance or at the doorstep.

These rules will also prohibit traders from charging consumers extra for paying by credit card or other means of payment.

This also applies to traders who operate telephone hotlines which clients can use to communicate with the trader in relation to the sale. These traders cannot charge more than the basic telephone rate for telephone calls.

If, when using the right of withdrawal, traders want their customers to bear the cost of returning the goods, consumers must be clearly informed about this cost before the sale is concluded. If this is not done, traders will have to pay for the return themselves. Furthermore, traders are obliged to give an estimate of the costs involved in returning bulky goods bought by internet or mail order, such as, for instance, a piece of furniture.

The Consumer Rights Directive also provides better consumer protection in the case of digital products. It stipulates that information on digital content mustbe clearer – more information about its compatibility with hardware and software and the application of any technical protection measures.

This directive is also beneficial to businesses, as it sets common rules that make it easier for businesses to trade all over Europe.

customer@timesofmalta.com
odette.vella@gov.mt

Ms Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.