Consumer Rights & Wrongs
The 2011 Consumer Rights Directive will, from 2013, introduce important changes to the law as it affects consumers and those who sell goods and provide services to them, especially in the online environment. The new Directive brings together currently distinct laws for ‘distance contracts’ and other consumer contracts. The stated objective of EU Directive 2011/83 on consumer rights (the “Directive”), which must be implemented in national law by 13 December 2013, is to increase consumer protection across the EU. It also brings together in a single instrument the currently distinct laws for distance and off premises contracts (see below) and other types of consumer contract. Although applying only to contracts between consumers and traders (including service-providers), in Ireland the Directive is anticipated by the 2011 recommendations of the Sales Law Review Group which has proposed reform of the legislation governing the sale of goods and supply of services generally (including business to business contracts).
The Directive recasts substantially the existing EU law on consumer rights in contracts for the sale of goods and the provision of a service (including off-premises contracts and those concluded by distance means); it also applies to the provision of utilities such as electricity, gas and water if any is provided on a contractual basis. However, the Directive does not apply to any of a number of types of contract, including contracts for financial services 1(whether by distance means or otherwise), healthcare, rental accommodation, construction or the sale of land or buildings. The Directive, which repeals the Distance Marketing and Off-Premises Directives (Directives 85/577/EEC and 97/7/EC), will be especially relevant in the online environment.
For the purposes of the Directive:
- a “consumer” is any human being (e.g. not including a company 2) who is acting for purposes which are outside his or her trade, business, craft or profession in respect of the particular contract;
- a “trader” is any person (human or corporate) acting for purposes relating to his, her or its trade, business, craft or profession in respect of the particular contract;
a “distance contract” means, broadly, any contract concluded between a trader and a consumer entirely by a means such as the internet, telephone, etc (ie where the parties are not at any stage physically present in the same place);
- an “off-premises contract” is a contract concluded between a consumer and a trader at a location that is not the trader’s business premises. The remainder of this briefing highlights the key features of the Directive.
- I.e. any service of a banking, credit, insurance, personal pension, investment or payment nature.
- This contrasts with the approach taken in respect of certain services (including financial services) inIreland: small companies may also be a “consumer” for certain purposes
•• Product and Service Information
A trader will have to provide prescribed information in respect of the good or service and in respect of the trader (e.g. total price, identity of the trader, main characteristics of the good or service, etc), in advance of the contract being formed. The required information will vary according to whether the contract is a distance or off-premises contract (enhanced information must be provided in the case of a distance and off-premises contract) or is not a distance or off-premises contract.
•• Increased Price Transparency
A trader will have to disclose the total cost of the relevant product or service, as well as any extra fees. An online shopper will not have to pay a charge or other cost unless he or she has been informed properly before an order is placed.
•• Cooling-off Period
As currently, a consumer will be entitled to withdraw from a distance or off-premises contract. However, the cooling-off period during which a consumer may withdraw from a sales contract will be extended to 14 calendar days (from seven days currently). The cooling-off period will be extended in certain circumstances (e.g. to one year, if the seller hasn’t clearly informed the consumer about the withdrawal right) and will be extended to circumstances including solicited visits and (in some cases) online auctions (but only where the counterparty is a professional trader). A range of exceptions are made to the right of withdrawal, e.g. perishable goods, service contracts that by that time have been performed fully, tailored goods and services, etc.
The Directive includes an optional model withdrawal from which a consumer may choose to use in his or her dealings with a trader. There will not be any right of withdrawal for urgent repairs and maintenance work and Member States may exempt a trader from some of the information requirements of an off-premises contract where he or she is requested by a consumer to carry out repair and maintenance work in the consumer’s home of a value less than €200.
•• Enhanced Refund Rights
A trader will have to refund a consumer for the product (including the costs of delivery) within 14 days of the consumer withdrawing from the contract.
•• Eliminating Surcharges for the Use of a Credit Card or ‘Hotline’
In a development that seems likely to overtake as-yet-uncommenced provisions of the Consumer Protection Act 2007, a trader will be prohibited from charging a consumer more for paying by any particular means of payment (such as a credit card) than what it actually costs the trader to offer the particular means of payment for that transaction. A trader that operates a telephone ‘hotline’ allowing the consumer to contact the trader in relation to the contract will be prohibited from charging more than the basic telephone rate for calls made to the ‘hotline’.
•• Returned Goods: Clearer Information on Associated Costs
If a trader wants the consumer to bear the cost of returning goods after the consumer changes his or her mind and withdraws from the contract, the trader has to inform the consumer clearly about that beforehand or else the trader must pay for the return. In the case of goods bought online or through mail order, a trader will have to give at least an estimate of the maximum costs of returning bulky goods (e.g. furniture) before the purchase.
•• Eliminating Hidden Charges and Costs on the Internet
A consumer will have to explicitly confirm that he or she understands that a charge applies to a service before the consumer may become liable for that charge.
•• Banning ‘Pre-ticked’ Options on Websites
Websites will be prohibited from ‘preselecting’ options for which there is a charge so that, in respect of every option for which the consumer may incur a charge, he or she will have to expressly select the particular option.
•• Digital Products: Better Protection for Consumers
Information on digital content (such as a software download) will have to be clearer (including regarding its compatibility with hardware and software) and in respect of any technical protection restrictions that apply (such as any limit on the right of a consumer to make copies of the content). A consumer will be entitled to withdraw from a purchase of digital content (such
as a music or video download), but – if an appropriate warning is given – only up until the point at which the actual downloading process begins.
•• Inertia Selling (Unsolicited Goods and Services)
The current prohibition on selling through the unsolicited supply of goods or the unsolicited provision of a service will remain.
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Further information is
Paul Heffernan McCann FitzGerald
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