Polish EU Presidency - More rights for consumers

10 October 2011, after nearly three years of negotiations, the EU Council adopted a new Directive strengthening the rights of consumers

The adopted Directive on consumer rights, changes two others: the Directive on certain aspects of the sale of consumer goods and associated guarantees (99/44/EC) and Directive on unfair terms in consumer contracts (93/13/EEC) and replaces the Directive on consumer protection in respect of distance contracts (97/7/EC) and the Directive on the protection of consumers in respect of contracts negotiated away from business premises (85/577/EEC).

The binding provisions concerning distance selling and off the business premises to a minimum harmonize regulations relating to contracts concluded with consumers. Over the years, the Member States added more provisions, often inconsistent with each other, thus creating a mosaic of 27 different national systems. In addition, technological advance caused that the existing regulations failed to meet the current market demands. Among other things, for these reasons, in October 2008 the European Commission presented a legislative proposal intended to update and harmonize the existing consumer protection law in the European Union and ensure the highest possible level of protection of weaker market participants and improve the functioning of the uniform internal market.

What is new?

“This is a good day for Europe's 500 million consumers,” said EU Justice Commissioner Viviane Reding after the approval of the directive by the European Parliament in June this year and added “The European Commission will help ensure that the new rules are implemented swiftly in all Member States so that consumers across Europe can have more confidence when shopping, whether online or offline.”

“We wanted to regulate mainly off-premises and distance contracts such as online trading, as this is where the most cross-border sales take place. The directive is a good compromise between necessary consumer rights and justified business interests,” said Andreas Schwab, the rapporteur of the Directive.

The new rules shall cover almost all forms of shopping - both made in the shop, and these by phone, via Internet, and catalog sales as well as doorstep contracts. The new catalog of rights shall in particular contribute to improving the online shoppers' rights, increasing consumer confidence and reducing the reluctance of sellers to cross-border e-commerce.

The compromise document assumes the maximum harmonization of the rules governing the transactions at a distance (Internet, phone) and off the business premises (e.g. sales representatives). It introduces a series of rules uniform in all Member States, under which the consumers shall be able to make transactions, and resign from the purchased goods by withdrawing from the contract - the new regulations give consumers such an opportunity within 14 days of the receipt of goods or the date of contract conclusion (in case of services). During this time, the consumer shall be vested the right to withdraw from the purchase without identifying the cause. What's more, if the undertaking wishes the consumer to bear the costs of return, it is obliged to clearly inform the consumer about this before the purchase, otherwise it shall bear such costs itself. In the case of goods purchased over the Internet or through mail order sales of large volume, such as appliances or furniture, the undertakings shall have to clearly state, or at least estimate, the maximum cost of returning the goods before buying, so that the consumer can make an informed choice before making decision where to buy the product. Moreover, undertakings shall no longer be able to charge consumers for paying by credit card (or other means of payment) with amount greater than that actually incurred for offering such a method of payment. In other words, the undertaking shall not be able to collect from the consumer the extra costs for using a credit card, which was a frequent practice before, e.g. in case of purchasing plane tickets via the Internet. Moreover, undertakings who use telephone lines, enabling consumers to contact them in connection with the contract, shall not be able to charge consumers higher fees than the cost of basic tariffs for telephone calls.

The new Directive on consumer rights means more transparent rules for making purchases over the Internet. According to the new rules, sellers shall have to disclose the total cost of the goods or services, as well as any additional fees charged to consumers. The online shoppers shall not have to pay any fees or extra costs, if they are not adequately informed about them before ordering. New regulations aim to eliminate practices where the undertaking by default ticks the boxes, which consumers should fill themselves and being aware of what they do. Currently, it often happens that when a consumer makes a purchase on the Internet - such as when buying a plane ticket – he/she is offered non-standard options such as travel insurance or car rental. These additional services can be offered through pre-ticked boxes, and a consumer who does not wish such additional services must "uncheck" the box. In order to eliminate these practices, the new rules provide that a consumer forced to incur additional costs arising under the check boxes pre-defined by the undertaking, shall be able to request reimbursement of those costs from the entity.

As emphasized by all participants of the negotiations, the adopted Directive constitutes a balanced compromise between the increase in consumer protection for contracts concluded in the so-called unusual circumstances and, which is in the interests of the undertakings, striving for harmonization of the rules of contracts. The introduction of transparent and uniform rules across the European Union shall therefore contribute not only to strengthening the position of consumers but also to elimination of barriers hindering cross-border trade, inter alia by eliminating the costs of business activity, and shall therefore increase the competitiveness of the European market.

What is next?

After the entry into force of the Directive, the Member States shall have two years to implement its provisions into their national law.